Question 1

Gaining access to new customers is, perhaps, the most traditional reason why firms begin international operations.

Accepted Answer

The answer of Gaining access to new customers is, perhaps,...

Question 2

In many ways, the transnational structure is similar to the centralized hub.

Accepted Answer

The transnational structure is characterized by decentralized decision making and autonomy of different locations, while the centralized hub structure involves decisions being made from one central location.

Question 3

Firms can maintain traditional arm's-length market relationship between themselves and their nondomestic customers and still implement international strategies.

Accepted Answer

Firms can choose to maintain arm's-length market relationships with foreign customers while still pursuing international strategies, such as exporting or licensing their products. These strategies allow firms to expand their reach and compete in global markets without necessarily entering into closer partnerships or joint ventures with foreign companies.

Question 4

Currency fluctuations can significantly affect the value of a firm's domestic investments.

Accepted Answer

The answer of Currency fluctuations can significantly affect the value...

Question 5

Hedging strategies reduce the business risks that firms assume when they enter into nondomestic markets.

Accepted Answer

The answer of Hedging strategies reduce the business risks that...

Question 6

Unlearning requires a firm to modify or abandon traditional ways of engaging in business.

Accepted Answer

Unlearning requires a firm to let go of old or traditional ways of doing things and open up to new possibilities and approaches.

Question 7

Because the value of hard currencies can fluctuate in the world economy, firms can manage their currency risk by engaging in various hedging strategies in world money markets.

Accepted Answer

Firms can use hedging strategies, such as forward contracts, options, and currency swaps, to manage their currency risk and protect themselves from currency fluctuations in world money markets.

Question 8

The search for low labor costs has led some firms to engage in an international "race to the bottom."

Accepted Answer

The statement is true. Some firms seek to minimize labor costs by relocating to countries with lower wages and weaker labor protections, creating a competition among countries to offer the cheapest labor. This is commonly referred to as a "race to the bottom."

Question 9

Local responsiveness can help firms be successful in addressing the local needs of nondomestic customers, thereby increasing demand for a firm's current products or services.

Accepted Answer

Local responsiveness refers to the ability of a firm to tailor its products or services to meet the specific needs and preferences of customers in different markets. By being responsive to local needs, firms can increase demand for their products or services among nondomestic customers, which can ultimately lead to greater success in international markets.

Question 10

A multinational strategy exploits all the advantages of both international integration and local responsiveness.

Accepted Answer

The answer of A multinational strategy exploits all the advantages...

Question 11

Learning from international operations is automatic.

Accepted Answer

Learning from international operations is not automatic. It requires deliberate efforts such as knowledge transfer, intercultural communication, and adaptation to local contexts.

Question 12

The financial risks can be daunting when a firm first begins international operations.

Accepted Answer

This statement is true. When a firm begins international operations, there are a variety of financial risks to consider, such as currency exchange rate fluctuations, potential tariffs and trade barriers, and regulatory and legal differences. These risks can be challenging to navigate, especially for smaller or newer firms, and can impact the overall success and profitability of the venture.

Question 13

Growth is the third stage in the product life cycle.

Accepted Answer

The answer of Growth is the third stage in the...

Question 14

In a decentralized federation, each country in which the firm operates is organized as a full profit-and-loss division headed by a division general manager who is typically the president of the company in a particular country.

Accepted Answer

In a decentralized federation, each country is organized as a profit-and-loss division headed by a general manager who is typically the president of the company in that country.

Question 15

One of the most compelling reasons for firms to begin operations outside their domestic markets is to refine their current core competencies and to develop new core competencies.

Accepted Answer

When firms begin operations outside their domestic markets, they are exposed to different environments, cultures, and business practices. This exposure can help them refine their current core competencies as they learn how to adapt and compete in new settings. Additionally, they may need to develop new core competencies in order to be successful in these new markets. Therefore, expanding internationally can be a valuable way for firms to develop and enhance their core competencies.

Question 16

The ability to learn from operations can be helped if managers perceive that there is too much to be learned.

Accepted Answer

The answer of The ability to learn from operations can...

Question 17

When international firms engage in countertrade, they receive payment for the products or services they sell into a country in the form of hard currency.

Accepted Answer

In countertrade, payment is often made in goods or services rather than hard currency.

Question 18

Government upheaval and the attendant risks to international firms are facts of life in some countries.

Accepted Answer

Government upheaval is a real risk in some countries, and it can lead to instability, risk to foreign investment, and other negative consequences for businesses operating in those countries.

Question 19

One estimate suggests that countertrade accounts for between 10 and 20 percent of world trade.

Accepted Answer

The statement is true. Countertrade accounts for between 10 and 20 percent of world trade according to one estimate.

Question 20

A product or service can be at different stages of its life cycle in different countries.

Accepted Answer

This is true because a product or service may be introduced later in some countries or may have a different level of popularity or adoption rate in different regions. Therefore, its life cycle stage may vary across different countries.

Quiz 11: International Strategies