Question 1

Briefly discuss why a domestic company desirous of entering foreign markets might see attractive advantages in forming strategic alliances with foreign companies.

Accepted Answer

The answer of Briefly discuss why a domestic company desirous...

Question 2

In competing in foreign markets,companies find it advantageous to concentrate their activities in a limited number of locations when

Accepted Answer

Multinational companies should concentrate internal processes in a few locations in the following situations: (1) when the costs of manufacturing or other activities are significantly lower in some geographic locations than in others; (2) when there are significant scale economies; (3) when there is a steep learning curve associated with performing an activity; and/or (4) when certain locations have superior resources,allow better coordination of related activities,or offer other valuable advantages,such as a sophisticated production facility or highly trained local personnel.

Question 3

A global strategy embraces the theme "think global,act global," whereas a multidomestic strategy relies more on a "think global,act local" mentality. Explain.

Accepted Answer

A global strategy indeed embraces the theme of "think global, act global." This approach involves a company applying the same business strategy across all countries in which it operates. The idea is to standardize products, services, and even marketing to achieve economies of scale and present a consistent brand image worldwide. Companies that employ a global strategy prioritize efficiency and integration across their operations, often centralizing decision-making at the headquarters.
On the other hand, a multidomestic strategy aligns more closely with the theme of "think local, act local." This strategy is characterized by a company tailoring its approach to fit the needs, tastes, and preferences of local markets. Businesses that adopt a multidomestic strategy often have decentralized decision-making, allowing local subsidiaries significant autonomy to develop products, services, and marketing campaigns that resonate with the local culture and consumer base. The emphasis is on differentiation and responsiveness to local market conditions rather than standardization.
Therefore, the correct themes for these strategies are:
- Global strategy: "Think global, act global."
- Multidomestic strategy: "Think local, act local."
The phrase "think global, act local" is often associated with transnational or international strategies, where a company seeks to combine the benefits of global coordination with the flexibility to adapt to local markets. However, this is not typically used to describe a multidomestic strategy.

Question 4

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous

Accepted Answer

Dispersing an internal process across many countries is more advantageous in some situations.Buyer-related activities,such as distribution to dealers,sales and advertising,and after-sale service,usually must take place close to buyers,making it necessary to physically locate the capability to perform such activities in every country market where a global firm has major customers.Dispersing activities to many locations is also competitively important when high transportation costs,diseconomies of large size,and trade barriers make it too expensive to operate from a central location or to hedge against the risks of fluctuating exchange rates and adverse political developments.

Question 5

Discuss in some detail the difference between a localized multidomestic strategy and a global strategy,and give the pros and cons of each.

Accepted Answer

The answer of Discuss in some detail the difference between...

Question 6

The ability of a multinational or global competitor to shift production from country to country to take advantage of exchange rate fluctuations,energy costs,wage rates,or changes in tariffs is an example of

Accepted Answer

An example of cross-border coordination is shifting production from a plant in one country to a plant in another to take advantage of exchange rate fluctuations and to respond to changing wage rates,energy costs,or changes in tariffs and quotas.

Question 7

What circumstances call for use of a multidomestic strategy for competing in international markets?

Accepted Answer

The answer of What circumstances call for use of a...

Question 8

Which of the following is not a strategic option companies should consider in tailoring their strategy to fit circumstances of emerging country markets?

Accepted Answer

Among the strategy options for tailoring a company's strategy to fit the sometimes unusual or challenging circumstances presented in developing-country markets are the following: (1) prepare to compete on the basis of low price,(2) modify aspects of the company's business model or strategy to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding),(3) try to change the local market to better match the way the company does business elsewhere,and (4) stay away from those emerging markets where it is impractical or uneconomical to modify the company's business model to accommodate local circumstances.

Question 9

Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous when

Accepted Answer

Dispersing an internal process across many countries is more advantageous in some situations.Buyer-related activities,such as distribution to dealers,sales and advertising,and after-sale service,usually must take place close to buyers,making it necessary to physically locate the capability to perform such activities in every country market where a global firm has major customers.Dispersing activities to many locations is also competitively important when high transportation costs,diseconomies of large size,and trade barriers make it too expensive to operate from a central location or to hedge against the risks of fluctuating exchange rates and adverse political developments.

Question 10

Explain the differences between a think global,act global strategy and a think global,act local strategy.

Accepted Answer

The answer of Explain the differences between a think global,act...

Question 11

When is a global strategy "superior" to a multidomestic strategy?

Accepted Answer

The answer of When is a global strategy "superior" to...

Question 12

One of the most viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets includes

Accepted Answer

Among the strategy options for tailoring a company's strategy to fit the sometimes unusual or challenging circumstances presented in developing-country markets are the following: (1) prepare to compete on the basis of low price,(2) modify aspects of the company's business model or strategy to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding),(3) try to change the local market to better match the way the company does business elsewhere,and (4) stay away from those emerging markets where it is impractical or uneconomical to modify the company's business model to accommodate local circumstances.

Question 13

Cross-border coordination contributes to a competitive advantage for a global competitor by

Accepted Answer

Cross-border coordination contributes to a competitive advantage for a global competitor by: (1) allowing production to be shifted from a plant in one country to a plant in another to take advantage of exchange rate fluctuations and to respond to changing wage rates,energy costs,or changes in tariffs and quotas; (2) allowing knowledge gained in one location to be transferred to operations in other countries; (3) shifting workloads from where they are unusually heavy to locations were personnel are underutilized; and (4) accelerating product development and enhancing innovation by globally linking and coordinating the scattered R&D departments of a multinational company.

Question 14

In which of the following circumstances is it not advantageous for a multinational competitor to concentrate its activities in a limited number of locations in order to build competitive advantage?

Accepted Answer

As opposed to concentrating activities in a certain location,dispersing an internal process across many countries is more advantageous in some situations.Buyer-related activities,such as distribution to dealers,sales and advertising,and after-sale service,usually must take place close to buyers,making it necessary to physically locate the capability to perform such activities in every country market where a global firm has major customers.Dispersing activities to many locations is also competitively important when high transportation costs,diseconomies of large size,and trade barriers make it too expensive to operate from a central location or to hedge against the risks of fluctuating exchange rates and adverse political developments.

Question 15

What are the primary country differences that shape strategy choices in international markets?

Accepted Answer

The answer of What are the primary country differences that...

Question 16

Companies racing for global market leadership

Accepted Answer

Companies racing for global leadership have to consider competing in developing-economy markets such as China,India,Brazil,Indonesia,Thailand,Poland,Russia,and Mexico-countries where the business risks are considerable but where the opportunities for growth are huge.

Question 17

Briefly identify the major reasons a company may choose to expand outside its domestic market.

Accepted Answer

The answer of Briefly identify the major reasons a company...

Question 18

Identify and briefly describe any three of the five strategic options for entering foreign markets.

Accepted Answer

The answer of Identify and briefly describe any three of...

Question 19

What are the possible benefits and risks of using strategic alliances to try to enhance a company's ability to compete in foreign markets?

Accepted Answer

The answer of What are the possible benefits and risks...

Question 20

Which of the following is not a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets?

Accepted Answer

Among the strategy options for tailoring a company's strategy to fit the sometimes unusual or challenging circumstances presented in developing-country markets are the following: (1) prepare to compete on the basis of low price,(2) modify aspects of the company's business model or strategy to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding),(3) try to change the local market to better match the way the company does business elsewhere,and (4) stay away from those emerging markets where it is impractical or uneconomical to modify the company's business model to accommodate local circumstances.Given the need for patience,developing a short-term strategy in this situation is illogical and is not among the strategy options for competing in emerging economies.

Quiz 7: Strategies for Competing in International Markets