Question 1

Sashes and Bows Inc., a clothing company headquartered in Milan, specializes in producing exquisite designer wear. All the materials are sourced indigenously, and all the members of the design team are of Italian descent. According to Michael Porter's model, Sashes and Bows has established a competitive advantage over its rivals because of:

Accepted Answer

The answer of Sashes and Bows Inc., a clothing company...

Question 2

Franklin Inc., an apparel manufacturer based in Scotland, opened a new store in the United States. Franklin's designs were well received by consumers in the host country. However, the firm incurred very high expenses due to the expensive rents and the higher costs of labor. Also, there was a hike in the price of fuel in the United States. This led to increased expenditures on the transportation of goods. This indicates that Franklin Inc. had serious issues in the United States due to poor:

Accepted Answer

The given scenario highlights that Franklin Inc. incurred high expenses due to expensive rents, higher costs of labor, and an increase in fuel prices. These factors can be classified as economic conditions, which negatively impacted the business. There is no mention of poor political or legal conditions or cultural differences affecting the firm's operations.

Question 3

Alice Inc., an American firm, signed a contract with an Indian retailer to sell its latest range of furniture. The furniture was priced high due a misjudgment on Indians' preferences and buying power. Consequently, sales were below expectations. We can infer that Alice Inc. did not succeed due to _____ conditions in India.

Accepted Answer

The answer of Alice Inc., an American firm, signed a...

Question 4

Which of the following is true about import quotas and tariffs?

Accepted Answer

Import quotas and tariffs restrict the flow of goods and services across borders, which can create obstacles for multinational firms that rely on global supply chains. These measures are often used to protect domestic industries from foreign competition, but they can also limit the choices available to consumers and businesses.

Question 5

Daffy Inc. is an international gaming corporation. Each of its overseas subsidiaries is autonomous, and the manager in each unit is given the authority to make necessary decisions and is held accountable for the results. From this information, we can conclude that Daffy Inc. is a:

Accepted Answer

A multidomestic corporation allows each of its overseas subsidiaries to operate independently and make their own decisions. This is in contrast to a global corporation, which tends to have a more centralized structure and decision-making process. Neither a national corporation nor a state-owned corporation necessarily have international subsidiaries or grant autonomy to their managers.

Question 6

Mark, an employee of Easel Co., an American-based multinational firm, was transferred to Japan to oversee the operations there. He was surprised to find that the Japanese employees only addressed their coworkers by their surnames and rarely made eye contact with each other. Moreover, Mark found it difficult to acclimatize to the local customs. Which of the following problems with entering a foreign market did Mark face?

Accepted Answer

Mark faced cultural misunderstanding, as he was not aware of the Japanese customs of addressing coworkers by their surnames and avoiding eye contact, which made it difficult for him to acclimatize to the local culture. This is a common problem when entering a foreign market, as cultural differences can significantly impact business operations and communication.

Question 7

The nation of Lancaster is embroiled in civil war. Its citizens, who are against the government, have resorted to armed conflict. Consequently, which of the following problems is a foreign company operating in Lancaster likely to face?

Accepted Answer

Political uncertainty is a direct consequence of civil war, affecting the stability and predictability needed for business operations.

Question 8

Some nations establish limits on the amount of earned and invested funds that can be withdrawn from it. These exchange controls are usually established by nations that:

Accepted Answer

Exchange controls are usually established by nations that are experiencing balance-of-payment problems. This is done to limit the outflow of capital and prevent further depletion of foreign exchange reserves. Nations with high trade surpluses or that are a part of larger trade agreements may not need to establish exchange controls. An open economy may also not require exchange controls as capital can move in and out freely.

Question 9

Which of the following statements is true about multidomestic companies?

Accepted Answer

Multidomestic companies have decentralized management, giving local managers the freedom to make decisions that are best suited for the local market. This allows them to be more responsive to local needs and preferences.

Question 10

RL Inc., an American insurance company, attempted to sell life insurance in Spain. However, the company failed to understand that life insurance policies are viewed with a negative attitude in Spain. People are averse to profiting from someone else's death and hence the company failed to reach its sales target. In this scenario, RL Inc. experienced:

Accepted Answer

RL Inc. faced cultural misunderstanding as they failed to understand the negative attitude towards life insurance policies in Spain.

Question 11

Which of the following is true of a multidomestic company?

Accepted Answer

A multidomestic company pursues different strategies in each of its foreign markets, tailoring its products, marketing campaigns, and business approach to the unique characteristics of each country or region. This approach values local responsiveness and customization over global integration and standardization.

Question 12

The national government of Turnbury regulates the amount of earned and invested funds that can be withdrawn from it. It only permits government bodies to engage in currency dealings. It also places limits on the percentage of investments that can be made by foreign companies. These rules and regulations are attributed to which of the following?

Accepted Answer

The rules and regulations mentioned in the scenario relate to exchange controls and ownership restrictions, specifically on the withdrawal of funds, currency dealings, and foreign investment limits. Import restrictions, political uncertainty, and cultural misunderstandings are not directly relevant to these specific regulations.

Question 13

Serenity Incorporation is a leading international watch manufacturer and has established several stores across Europe. The company competes on a market-by-market basis and each of its international subsidiaries operates autonomously. This indicates that Serenity Incorporation is a:

Accepted Answer

Serenity Incorporation operates autonomously in each market it competes in, indicating that it is a multidomestic corporation, as it adapts its strategies to each individual market. A global corporation would have a more standardized approach across all markets, while a state-owned corporation is owned and controlled by a government entity. A national corporation operates primarily within its home country, which is not the case for Serenity Incorporation.

Question 14

Singapore is one of the leading producers of coffee in the world. However, there are a few companies in Singapore that import coffee from Brazil and India. Which of the following can Singapore establish to promote self-sufficiency?

Accepted Answer

Singapore can establish import quotas to limit or reduce the amount of coffee being imported from other countries. This will encourage local production and promote self-sufficiency in coffee production. Import liberalization, export incentives and complementary import policies will have little impact on promoting self-sufficiency in coffee production.

Question 15

Which of the following is true of a global corporation?

Accepted Answer

A global corporation views the world as one market, seeking to create a standardized product or service that can be marketed and sold in various countries with minimal adaptation. They focus on similarities and commonalities between markets rather than cultural differences, and strive for integration of resources to compete effectively on a global scale.

Question 16

The central government of Arcadia requires that 80% of the proprietorship of a corporation should be held by its citizens. This particular requirement of the government is attributed to which of the following?

Accepted Answer

The requirement that 80% of the proprietorship of a corporation should be held by its citizens is an example of ownership restrictions. This policy aims to control the foreign ownership of companies operating within the country, which falls under exchange controls. Cultural misunderstandings, export restrictions, and import restrictions do not directly relate to this policy.

Question 17

In context of the problems faced when entering foreign markets, which of the following refers to political uncertainty?

Accepted Answer

Political uncertainty refers to the risk of unstable governments, social unrest, and armed conflict, which can have a significant impact on a firm's entry and operations in a foreign market.

Question 18

Which of the following is true of a global corporation?

Accepted Answer

A global corporation emphasizes universal consumer needs and wants rather than differences. This allows them to have a standardized approach to marketing and production across different countries, making it more efficient and cost-effective.

Question 19

A&B Ltd., a cell phone manufacturer headquartered in the Netherlands, has expanded its operations to many nations, including Afghanistan. However, due to the civil unrest, violent terrorism, and the unstable government, the company's branch in Afghanistan has not been able to function successfully. Which of the following problems has affected A&B's operations in Afghanistan?

Accepted Answer

The civil unrest, violent terrorism, and unstable government in Afghanistan all contribute to political uncertainty, which has affected the successful functioning of A&B's branch in the country. The other options listed (Exchange Controls and Ownership Restrictions, Import restrictions, and Cultural misunderstanding) may also be potential issues faced by A&B in other countries, but they are not explicitly mentioned in the scenario as affecting the operations in Afghanistan.

Question 20

Which of the following factors of Michael Porter's diamond model refers to the conditions in the nation that govern how companies are created, organized, and managed, and how intensely they compete domestically?

Accepted Answer

This factor of Porter's diamond model refers specifically to the conditions within a nation that affect the competitive environment of local companies. It includes factors such as the nature of domestic competition, the level of government support for businesses, and the local business culture. Other factors of Porter's diamond model include factor conditions, demand conditions, and related and supporting industries.

Quiz 13: Global Marketing

Which of the following is true about import quotas and tariffs?

Daffy Inc. is an international gaming corporation. Each of its overseas subsidiaries is autonomous, and the manager in each unit is given the authority to make necessary decisions and is held accountable for the results. From this information, we can conclude that Daffy Inc. is a:

The nation of Lancaster is embroiled in civil war. Its citizens, who are against the government, have resorted to armed conflict. Consequently, which of the following problems is a foreign company operating in Lancaster likely to face?

Some nations establish limits on the amount of earned and invested funds that can be withdrawn from it. These exchange controls are usually established by nations that:

Which of the following statements is true about multidomestic companies?

Which of the following is true of a multidomestic company?

Serenity Incorporation is a leading international watch manufacturer and has established several stores across Europe. The company competes on a market-by-market basis and each of its international subsidiaries operates autonomously. This indicates that Serenity Incorporation is a:

Singapore is one of the leading producers of coffee in the world. However, there are a few companies in Singapore that import coffee from Brazil and India. Which of the following can Singapore establish to promote self-sufficiency?

Which of the following is true of a global corporation?

The central government of Arcadia requires that 80% of the proprietorship of a corporation should be held by its citizens. This particular requirement of the government is attributed to which of the following?

In context of the problems faced when entering foreign markets, which of the following refers to political uncertainty?

Which of the following is true of a global corporation?

Which of the following factors of Michael Porter's diamond model refers to the conditions in the nation that govern how companies are created, organized, and managed, and how intensely they compete domestically?