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How has the administrative and political distance between Canada, Mexico, and the United States been reduced?


A) By adopting similar national cultures
B) By lowering the disparities between their per capita incomes
C) By establishing the North American Free Trade Agreement (NAFTA)
D) By reducing their linguistic differences

E) All of the above
F) A) and C)

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The administrative and political distance between two trading countries reduces when:


A) there are FDI restrictions in the host country.
B) there is no independent central bank in the host country.
C) there are tariffs and trade quotas in the host country.
D) there is a well-functioning capital market in the host country.

E) B) and C)
F) A) and B)

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Provide an example of a company following a multidomestic strategy.

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Student answers will vary.A multidomestic strategy is common in the consumer products and food industries.For example, Swiss-based Nestlé, the largest food company in the world is well known for customizing its product offerings to suit local preferences, tastes, and requirements.Given the strong brand names and core competencies in R&D, and the quality in their consumer products and food industries, it is not surprising that these multinational companies generally pursue a differentiation strategy at the business level.Other companies following a multidomestic strategy include Bridgestone and Philips.

How does Lenovo pursue a global-standardization strategy? How has the company benefited from it?

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Lenovo, the Chinese computer manufacture...

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Which of the following statements best explains how the presence of top-notch complementors within a firm's industry affects the focal firm's business?


A) It weakens the national competitive advantage enjoyed by the focal firm.
B) It improves the factor conditions in the focal firm's domestic market.
C) It increases the value of the focal firm's offering from a customer's perspective.
D) It reduces the economic contribution created by the focal firm.

E) A) and D)
F) B) and C)

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Today, Hollywood movies are banking more on foreign sales for their overall revenues.Hollywood studios have been adapting scripts to appeal to global audiences, and casting foreign actors in leading roles.Which of the following statements most accurately explains the reason for this change?


A) The purchasing power of the U.S. audience has reduced drastically.
B) Hollywood is now a truly global enterprise with the vast majority of revenues coming from outside the United States.
C) Hollywood actors and actresses are no longer willing to participate in domestic productions since there is no money in this industry.
D) The movie industries of other countries are not doing so well.

E) None of the above
F) B) and C)

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Octa Autos Inc.wants to globally expand its market.It intends to ensure that its mode of foreign entry allows it to have strong control over its operations and protect its intellectual property, though it may mean investing a significant amount of capital and other resources.In this scenario, which of the following foreign entry modes would best suit Octa Autos Inc.?


A) Exporting
B) Franchise agreement
C) Acquisition
D) Licensing

E) A) and B)
F) A) and C)

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C

Which of the following products are generally manufactured by multinational enterprises (MNEs) pursuing a global-standardization strategy?


A) Products with a high value-to-weight ratios like luxury goods
B) Commodity products like computer hardware
C) Consumer products related to national and/or religious identity like food
D) Products that carry country-specific quality associations like wine

E) B) and C)
F) None of the above

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Disney's "Wedding Banned," a romantic comedy about a divorced couple trying to prevent their daughter from getting married, was axed in the advanced production stage despite several marquee stars (Robin Williams, Anna Faris, and Diane Keaton) .Which of the following statements best explains why this happened?


A) The purchasing power of the U.S. audience had reduced drastically.
B) There was a feeling that the movie was against traditional American values regarding marriage.
C) The movie was a copy of an already existing French movie.
D) There were perceptions that this movie would not succeed outside of the American market.

E) B) and D)
F) B) and C)

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What are the two opposing forces that multinational companies have to face when competing around the globe?

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Multinational companies face two opposin...

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In which of the following stages of globalization did firms organize as networks to pursue a global-standardization strategy?


A) Globalization 1.0
B) Globalization 2.0
C) Globalization 3.0
D) Globalization 4.0

E) B) and D)
F) None of the above

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A firm pursuing a transnational strategy would believe that:


A) key business functions should be located in its home country headquarters.
B) local responsiveness is more important than cost reductions for competitive advantage.
C) best practices, ideas, and innovations should be diffused throughout the world.
D) the majority of the value creation should take place in the home country.

E) A) and B)
F) None of the above

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What factors enabled Japanese companies to build energy-efficient air conditioners?

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Due to dense urban living conditions, hot and humid summers, and high energy costs, Japanese customers demand small, quiet, and energy-efficient air conditioners.A home market made up of sophisticated customers who hold companies to a high standard of value creation, where cost containment contributes to national competitive advantage.Moreover, demanding customers may also clue firms in to the latest developments in specific fields and may push firms to move research from basic findings to commercial applications for the marketplace.

Which of the following types of organizations comparatively requires the lowest levels of investment and control?


A) Joint ventures
B) Franchising
C) Acquisition
D) Greenfield operations

E) A) and B)
F) None of the above

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Welcome Inc.is a global Internet company that offers country-specific variations of its sites, keeping in mind the linguistic and religious differences between the countries.Welcome Inc.is most likely doing this to:


A) reduce its geographical distance from the other countries.
B) increase its administrative distance from the other countries.
C) increase its economic distance from the other countries.
D) reduce its cultural distance from the other countries.

E) A) and C)
F) B) and C)

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Charlie is a strategist who wants to decide on the appropriate strategy to help his firm "go global." Which of the following should Charlie consider while choosing his strategy?


A) He must be aware of the fact that despite globalization and the emergence of the Internet, firm geographic location has actually maintained its importance.
B) He should rely on his firm's business-level strategy as a clue to possible strategies pursued globally.
C) He should remember that he has only one framework at his disposal to make global strategy decisions.
D) He must remember that higher levels of control and a lower likelihood of any loss in reputation go along with less investment-intensive foreign entry modes.

E) A) and C)
F) All of the above

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GM entered China in 1997 through a joint venture with Shanghai Automotive Industrial Corp.(SAIC) .Which of the following factors best contributes to the fact that the Chinese market already accounts for 25 percent of GM's total revenues?


A) Chinese workers cost only a fraction of what U.S. workers do.
B) The company operates a larger number of assembly plants in China than the U.S.
C) The China operation sells more vehicles while employing twice the number of employees.
D) GM's China operation has never been cost-competitive.

E) B) and D)
F) A) and B)

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What is the integration-responsiveness framework?

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The integration-responsiveness framework...

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Food Works Inc.is a multinational fast food chain that follows a multidomestic strategy.Which of the following statements most likely holds true for the company?


A) The company's competitive advantage lies in leveraging its home-based core competencies in foreign markets.
B) Each country unit owned by the company will tend to be highly autonomous.
C) Majority of the value creation for the company will take place in its home country.
D) The company will not face any operational inefficiency as the key business functions do not have to be duplicated.

E) A) and B)
F) B) and C)

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Which of the following is the most likely advantage of using foreign acquisitions or greenfield plants as a foreign entry mode?


A) They are easy to initiate and terminate.
B) They require low amounts of investments in terms of capital.
C) They reduce a firm's exposure to loss of reputation.
D) They are based on contracts rather than ownership.

E) None of the above
F) A) and D)

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