Question 1

The need to attain economies of scale encourages multinational firms to operate under a multidomestic strategy.

Accepted Answer

A) True 
 B)False

Question 2

Discuss how the global dispersion of value chains has influenced the traditional modes of international expansion.

Accepted Answer

Beyond the traditional entry modes of in...

Question 3

Microsoft decided to establish a corporate research laboratory in Cambridge, England

Accepted Answer

A)   because England is an ally of the United States.
B)   because they could access technical and professional talent available in Cambridge.
C)   because the local language is English.
D)   because the company views Canada as a risky place to expand due to extension Human Rights laws.E) B) and C)
F) A) and D)

Question 4

Explain how the two opposing forces facing MNC managers (cost reduction and local adaptation) create pressures to operate with a global or multidomestic strategy, respectively.

Accepted Answer

A global strategy involves standardized ...

Question 5

A key tenet of a transnational strategy is improved adaptation to all competitive situations as well as flexibility by capitalizing on communication and knowledge flows throughout the organization.

Accepted Answer

A) True 
 B)False

Question 6

A domestic corporation considering expanding into international markets for the first time will typically

Accepted Answer

A)   start off by implementing a wholly owned foreign subsidiary so it can maintain standards identical to those at home.
B)   consider licensing or franchising its operations.
C)   consider implementing a low risk/low control strategy such as exporting.
D)   form a joint venture with a reputable foreign producer.E) None of the above
F) B) and D)

Question 7

Which of the following is a disadvantage of a transnational strategy?

Accepted Answer

A)   less ability to realize cost savings through scale economies
B)   limited ability to adapt to local markets
C)   unique managerial challenges in fostering knowledge transfer
D)   single locations may lead to higher tariffs and transportation costsE) C) and D)
F) A) and B)

Question 8

All of the following are limitations of a global strategy, except

Accepted Answer

A)   limited ability to adapt to local markets.
B)   the ability to locate activities in optimal locations.
C)   the concentration of activities may increase dependence on a single facility.
D)   single locations may lead to higher tariffs and transportation costs.E) A) and C)
F) A) and B)

Question 9

A multidomestic strategy would likely include the use of high volume, centralized production facilities to maximize economies of scale.

Accepted Answer

A) True 
 B)False

Question 10

It is most appropriate to use a multidomestic strategy when the pressure to lower costs are high and the pressure for local adaptation is also high.

Accepted Answer

A) True 
 B)False

Question 11

Two opposing pressures that managers face when they compete in foreign markets are: cost reduction and adaptation to local markets.

Accepted Answer

A) True 
 B)False

Question 12

Discuss why international expansion is a viable diversification strategy that is being pursued by many firms.

Accepted Answer

The rise of globalization and market cap...

Question 13

Which one of the following is one of Theodore Levitt's assumptions supporting a pure global strategy?

Accepted Answer

A)   Consumers are willing to pay more for specific product features.
B)   Customer needs and interests are becoming more dissimilar.
C)   If the world markets are treated as heterogeneous, substantial economies of scale are easily achieved.
D)   MNCs can compete with aggressive pricing on low cost products that meet the common needs of global consumers.E) B) and D)
F) C) and D)

Question 14

As in the case of Siebel Systems, elements of a global strategy may facilitate the competitive advantage of differentiation by

Accepted Answer

A)   increasing the freedom of individual business units to adapt to local tastes.
B)   creating a worldwide network to achieve consistent service regardless of location.
C)   offering flexibility in applying R&D to meet country-specific needs.
D)   tailoring products to meet country-specific needs.E) None of the above
F) B) and C)

Question 15

IMAX claims that every new theatre that opens somewhere in the world lowers the cost of production of its unique movies.

Accepted Answer

A) True 
 B)False

Question 16

The strategy that would be most appropriate when the pressures to lower costs are high, and the pressures for local adaptation are low?

Accepted Answer

A)   Global strategy
B)   Transnational strategy
C)   International strategy
D)   Multidomestic strategyE) B) and C)
F) A) and C)

Question 17

Among Theodore Levitt's assumptions that would favour a global strategy is that consumers around the world are becoming less price-sensitive.

Accepted Answer

A) True 
 B)False

Question 18

According to Theodore Levitt, what are the three assumptions that favour the pursuit of a "pure" global strategy?

Accepted Answer

Levitt observed that media, low cost tra...

Question 19

Demanding domestic consumers tend to push firms to move ahead of companies in other countries where consumers are less demanding and more complacent.

Accepted Answer

A) True 
 B)False

Question 20

Multinational firms following a transnational strategy strive to optimize the trade-offs associated with efficiency, local adaptation, and learning.

Accepted Answer

A) True 
 B)False

Exam 7: International Strategy: Creating Value in Global Markets

The need to attain economies of scale encourages multinational firms to operate under a multidomestic strategy.

Correct AnswerverifiedShow Answer

Microsoft decided to establish a corporate research laboratory in Cambridge, England

Correct AnswerverifiedShow Answer

Multinational firms following a transnational strategy strive to optimize the trade-offs associated with efficiency, local adaptation, and learning.

Correct AnswerverifiedShow Answer

Among Theodore Levitt's assumptions that would favour a global strategy is that consumers around the world are becoming less price-sensitive.

Correct AnswerverifiedShow Answer

Explain how the two opposing forces facing MNC managers (cost reduction and local adaptation) create pressures to operate with a global or multidomestic strategy, respectively.

Correct AnswerverifiedA global strategy involves standardized ...View AnswerShow Answer

Which of the following is a disadvantage of a transnational strategy?

Correct AnswerverifiedShow Answer

A domestic corporation considering expanding into international markets for the first time will typically

Correct AnswerverifiedShow Answer

All of the following are limitations of a global strategy, except

Correct AnswerverifiedShow Answer

As in the case of Siebel Systems, elements of a global strategy may facilitate the competitive advantage of differentiation by

Correct AnswerverifiedShow Answer

Demanding domestic consumers tend to push firms to move ahead of companies in other countries where consumers are less demanding and more complacent.

Correct AnswerverifiedShow Answer

Two opposing pressures that managers face when they compete in foreign markets are: cost reduction and adaptation to local markets.

Correct AnswerverifiedShow Answer

According to Theodore Levitt, what are the three assumptions that favour the pursuit of a "pure" global strategy?

Correct AnswerverifiedLevitt observed that media, low cost tra...View AnswerShow Answer

A key tenet of a transnational strategy is improved adaptation to all competitive situations as well as flexibility by capitalizing on communication and knowledge flows throughout the organization.

Correct AnswerverifiedShow Answer

IMAX claims that every new theatre that opens somewhere in the world lowers the cost of production of its unique movies.

Correct AnswerverifiedShow Answer

A multidomestic strategy would likely include the use of high volume, centralized production facilities to maximize economies of scale.

Correct AnswerverifiedShow Answer

Discuss why international expansion is a viable diversification strategy that is being pursued by many firms.

Correct AnswerverifiedThe rise of globalization and market cap...View AnswerShow Answer

It is most appropriate to use a multidomestic strategy when the pressure to lower costs are high and the pressure for local adaptation is also high.

Correct AnswerverifiedShow Answer

Discuss how the global dispersion of value chains has influenced the traditional modes of international expansion.

Correct AnswerverifiedBeyond the traditional entry modes of in...View AnswerShow Answer

Which one of the following is one of Theodore Levitt's assumptions supporting a pure global strategy?

Correct AnswerverifiedShow Answer

The strategy that would be most appropriate when the pressures to lower costs are high, and the pressures for local adaptation are low?

Correct AnswerverifiedShow Answer

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A global strategy involves standardized ...
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Levitt observed that media, low cost tra...
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Correct Answer
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The rise of globalization and market cap...
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Correct Answer
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Beyond the traditional entry modes of in...
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Correct Answer
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Correct Answer
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