Question 1

What is configuration? Briefly list and discuss the factors that influence value chain configuration.

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Question 2

Micro-multinationals are firms that globalize immediately and enter countries with numerous customers,productive workers,and attractive industries.

Accepted Answer

Micro-multinationals are characterized by their ability to quickly and effectively expand globally, often targeting countries with significant potential for growth and profitability. These companies leverage technology, outsourcing, and other strategies to enter multiple markets simultaneously and establish a strong presence around the world.

Question 3

What is the Industry Organization (IO)paradigm? Discuss the underlying assumptions of this model.

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Question 4

In a brief essay,discuss the strategy used by Zara,the firm described in the opening case. Also discuss the features of Zara's value chain.

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Question 5

Tel-Comm Tek is a company that sees the world as a single market,assuming that consumer preferences and industry conditions do not vary much among countries. Tel-Comm Tek is likely to adopt a multidomestic strategy.

Accepted Answer

Tel-Comm Tek's assumption that consumer preferences and industry conditions do not vary much among countries is more aligned with a global standardization strategy, rather than a multidomestic strategy which takes into account differences among countries and adapts products and strategies accordingly.

Question 6

What is the difference between primary and secondary activities in the value chain? Describe the functions of configuration and coordination in these value activities.

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Question 7

A multidomestic strategy makes the most sense for companies that see high pressures for local responsiveness and low pressures for cost reductions.

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A multidomestic strategy focuses on adapting products and marketing strategies to meet the specific needs of local markets, which is necessary in industries where there are high pressures for local responsiveness. This approach can result in higher costs, but if there are low pressures for cost reductions, as may be the case in luxury or niche markets, a multidomestic strategy can be effective.

Question 8

What is coordination? Describe the factors that influence value chain coordination.

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Question 9

A company that develops different capabilities and contributions from different countries and shares them in integrated worldwide operations is using a transnational strategy.

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This is the definition of a transnational strategy, which involves coordination and integration of global operations while also utilizing local knowledge and expertise.

Question 10

The fundamental outlook of the global strategy is adaptation.

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Question 11

The strategy of a firm using an international strategy is likely to entail producing and marketing mostly standardized products worldwide,with some customization where and when necessary.

Accepted Answer

An international strategy involves focusing on global markets and producing standardized products that can be marketed and sold worldwide. However, some customization may be necessary in certain markets due to cultural or regulatory differences.

Question 12

What is the relationship between the five-forces model and a firm's international business strategy? Provide examples to illustrate your answer.

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Question 13

What are core competencies? How do firms that adopt an international strategy utilize their core competencies? How do firms that adopt a transnational strategy utilize their core competencies?

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Question 14

Describe the two basic ways that companies can create value. What role does the value chain play in these methods?

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Question 15

Tel-Comm Tek is a company that believes it has core competencies that its competitors in foreign markets lack and that it faces relatively weak pressures for local responsiveness and cost reductions. Tel-Comm Tek is likely to adopt an international strategy.

Accepted Answer

Tel-Comm Tek's belief in its core competencies and weak pressures for local responsiveness and cost reductions suggest a suitable international strategy, where the company can leverage its competencies and operate in foreign markets with limited adaptations to local conditions.

Question 16

Mobile Technology is a company that sees the world as a single market,assuming that consumer preferences and industry conditions do not vary much among countries. Mobile Technology is likely to adopt a global strategy.

Accepted Answer

Mobile Technology's view of the world as a single market implies a standardized approach across countries, which is a characteristic of a global strategy.

Question 17

Organizational challenges are comparatively more difficult for the firm pursuing a transnational strategy than for the firm pursuing an international strategy.

Accepted Answer

A transnational strategy involves integrating global operations and maximizing local responsiveness, which requires constant coordination and communication among different regions and functions within the organization. This level of complexity makes organizational challenges greater for transnational firms compared to firms pursuing an international strategy, which focuses more on adapting products or services to local markets without as much integration across regions.

Question 18

Using a transnational strategy pushes a company to centralize some functions in optimal locations,base some functions in national subsidiaries to ensure local responsiveness,and develop wide-ranging communications among various units.

Accepted Answer

This is true as using a transnational strategy involves balancing the need for global integration with local responsiveness, which often requires a mix of centralized and decentralized functions. It also requires strong communication and coordination among different units within the company.

Question 19

Describe the pressures for local responsiveness that international companies face.

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Question 20

Discuss the characteristics of international,multidomestic,global,and transnational strategies. Include situations and a specific example in which each strategy would be most appropriate.

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Quiz 11: The Strategy of International Business