Question 1

Cultural differences affect location advantages in that business transactions are less difficult for a firm to complete when there is a strong match among the cultures with which the firm is involved.

Accepted Answer

Cultural differences can impact the ease and success of business transactions, and a strong cultural match can often provide location advantages for firms.

Question 2

After a firm decides to compete internationally, it must select its strategy and choose a mode of entry into international markets.

Accepted Answer

Once a firm decides to compete internationally, it must analyze and select its strategy and mode of entry into international markets.

Question 3

Coca Cola and PepsiCo are examples of firms that have found it unnecessary to aggressively pursue international strategies because of extensive growth opportunities available in the U.S. market.

Accepted Answer

This statement is false. Both Coca Cola and PepsiCo have aggressively pursued international strategies and have significant global presence and revenue. While the U.S. market is important, these companies have recognized the importance of diversifying their revenue streams and reaching consumers worldwide.

Question 4

In some industries, technology drives globalization because the economies of scale necessary to reduce costs cannot be met by competing in domestic markets alone.

Accepted Answer

Technology has made it easier and more cost-effective for companies to operate on a global scale, and competing only in domestic markets may not be sufficient to achieve the economies of scale necessary to reduce costs. Therefore, technology can be a driving force behind globalization in certain industries.

Question 5

According to the Chapter 8 Strategic Focus, Starbucks' international strategy for success in China is a cost leadership business-level strategy coupled with a multidomestic corporate-level strategy.

Accepted Answer

According to the Chapter 8 Strategic Focus, Starbucks' international strategy for success in China is a differentiation business-level strategy coupled with a transnational corporate-level strategy.

Question 6

Embracing the global marketplace is important to Starbucks because it commands less that one percent of the global coffee market suggesting that there is room for growth. (Chapter 8 Opening Case)

Accepted Answer

The opening case of chapter 8 states that Starbucks commands less than one percent of the global coffee market, which implies that there is room for growth by embracing the global marketplace.

Question 7

In place of relatively stable and predictable domestic markets, firms across the globe find that they are competing in relatively unstable and unpredictable global markets.

Accepted Answer

The statement is true as global markets are subject to various factors such as political instability, economic fluctuations, and cultural differences which can make them unpredictable and unstable.

Question 8

As an indication of the importance of economies of scale, Ford Motor Company runs a single global business developing cars and trucks that can be built and sold through the world. By 2015, Ford intends for about 75% of the vehicles it sells to be variants of about 5 basic platforms.

Accepted Answer

The statement correctly indicates the importance of economies of scale for Ford Motor Company and their strategy of developing cars and trucks that can be built and sold globally using basic platforms.

Question 9

Location advantages are influenced by costs of production, access to natural resources and critical supplies, as well as the needs of customers, but not culture.

Accepted Answer

Location advantages are influenced not only by costs of production, access to natural resources and critical supplies, and the needs of customers, but also by the culture of the surrounding area. Cultural factors such as language, customs, and traditions can impact the success of a business in a particular location.

Question 10

One reason why firms pursue international opportunities is to extend the product's life cycle.

Accepted Answer

When a product reaches maturity or decline in one market, firms can pursue international opportunities to introduce the product into new markets where there is still potential for growth and to extend the product's life cycle.

Question 11

According to the Chapter 8 Strategic Focus, Starbucks implements the transnational strategy by using its core competencies to standardize its operations to gain global efficiences while decentralizing decision making responsibilities to local units.

Accepted Answer

This statement accurately describes Starbucks' implementation of the transnational strategy. They have standardized their operations to achieve global efficiencies while still allowing local units to make decisions that are specific to their market.

Question 12

The three corporate-level international strategies are cost leadership, differentiation, and focus.

Accepted Answer

The three corporate-level international strategies are global standardization, localization, and transnational. Cost leadership, differentiation, and focus are competitive strategies.

Question 13

A major incentive for the use of international an strategy by French-based Carrefour Group is the potential for large demand for goods and services from emerging markets such as China and India.

Accepted Answer

The sentence states that the potential for large demand from emerging markets such as China and India is a major incentive for Carrefour Group's use of international strategy.

Question 14

Coca Cola and PepsiCo approach international growth differently. Coca Cola is the world's largest snack-food producer and relies on overseas sales to make up for slower sales volumes in North America. In contrast, PepsiCo which is less diversified, derives only 32% of it sales from North America, an indication of the importance of international markets to its performance.

Accepted Answer

The answer of Coca Cola and PepsiCo approach international growth...

Question 15

A reason that firms use international strategies is to secure needed resources, especially minerals and energy.

Accepted Answer

International strategies allow firms to expand their reach and access resources that may not be available or are limited in their home country. This includes securing needed resources such as minerals and energy from other countries.

Question 16

The three basic benefits of international strategies are 1) increased market size; 2) increased economies of scale and learning; and 3) development of competitive advantages through location.

Accepted Answer

These are indeed the three basic benefits of international strategies.

Question 17

As nations industrialize, the demand for some products and services such as Starbucks (Chapter 8 Opening Case) becomes more similiar as a result of similar lifestyles in those nations.

Accepted Answer

As countries industrialize, they tend to adopt similar lifestyles and consumer behaviors, which in turn leads to a greater demand for certain products and services. This is known as cultural convergence. The opening case of Chapter 8, which discusses Starbucks, is an example of this phenomenon. As Starbucks expanded globally, it found that consumers in different countries had similar tastes and preferences for its products, despite differences in culture and tradition.

Question 18

Rivals Airbus and Boeing have multiple manufacturing facilities and outsource activities partly for the purpose of developing economies of scale as a source of being able to create value for customers.

Accepted Answer

Both Airbus and Boeing have multiple manufacturing facilities and outsource certain activities in order to gain economies of scale and create value for customers through increased efficiency and lower costs.

Question 19

Multinational firms have many opportunities to learn from their experiences in international markets, but they must have a strong R&D system to absorb the knowledge.

Accepted Answer

Multinational firms can gain valuable insights and knowledge from their experiences in international markets, but they need a robust research and development system in place to effectively assimilate and apply this knowledge. Without a strong R&D system, they may not be able to fully capitalize on the lessons learned from their international operations.

Question 20

Because there are still several industrial and consumer markets in which only domestic firms compete, many firms do not have to be able to compete internationally.

Accepted Answer

This statement is false. In today's globalized economy, even firms that only compete domestically must be able to adapt to international competition and market trends. The interconnectedness of markets and advancements in technology have made it easier for foreign firms to enter domestic markets, making it necessary for domestic firms to be able to compete on an international level as well.

Quiz 8: Global Strategy