Question 1

In international markets,a disadvantage of licensing is that the firm granting a license incurs little risk,since it does not have to invest any significant resources into the country itself.

Accepted Answer

A) True 
 B)False

Question 2

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to adapt locally,companies should choose a(n) __________ or __________ in order to compete in the global marketplace.

Accepted Answer

A)   global strategy; transnational strategy
B)   global strategy: multidomestic strategy
C)   international strategy; global strategy
D)   transnational strategy; multidomestic strategyE) A) and B)
F) A) and C)

Question 3

Major Western hemisphere trade blocs include NAFTA,Mercosur,and ASEAN.

Accepted Answer

A) True 
 B)False

Question 4

A firm can establish a wholly owned subsidiary by

Accepted Answer

A)   acquiring an existing company in the home country.
B)   keeping all of the activity offshore.
C)   licensing intellectual property.
D)   entering into a franchising agreement.E) C) and D)
F) None of the above

Question 5

Which of these points on the Porter diamond of national advantage is the strongest indicator of global competitive success?

Accepted Answer

A)   foreign rivalry
B)   domestic rivalry
C)   global rivalry
D)   international rivalryE) A) and D)
F) B) and D)

Question 6

In a global strategy a firm operates all of its businesses under a single common strategy,regardless of location.

Accepted Answer

A) True 
 B)False

Question 7

There are risks associated with the Bottom of the Pyramid strategy.One of them is that the new low-cost products that are developed may cannibalize the sales of the core products of the company using the strategy.

Accepted Answer

A) True 
 B)False

Question 8

To be responsive to local pressures,companies must ____________ their offerings and strategies from country to country to reflect local consumer preferences.

Accepted Answer

A)   internationalize
B)   globalize
C)   differentiate
D)   standardizeE) A) and C)
F) B) and D)

Question 9

Which of the following is not a risk normally associated with Bottom of the Pyramid strategies?

Accepted Answer

A)   A low-end version of a brand may detract from the overall brand attractiveness.
B)   The new low-cost products they develop may cannibalize the sales of their core products.
C)   Entrenched competitors can impact the ability of the new firm to enter the market successfully.
D)   New products may be perceived as exploiting the privileged customer with substandard products.E) B) and C)
F) A) and D)

Question 10

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to lower costs,companies should choose a(n) __________ or __________ in order to compete in the global marketplace.

Accepted Answer

A)   global strategy; transnational strategy
B)   global strategy: multidomestic strategy
C)   international strategy; multidomestic strategy
D)   international strategy; transnational strategyE) B) and C)
F) C) and D)

Question 11

Exporting is an expensive way to enter foreign markets.

Accepted Answer

A) True 
 B)False

Question 12

Statistics indicate that over half of the world output now comes from emerging markets.This is leading to a(n) ___________ of living standards across the globe and is changing the face of business.

Accepted Answer

A)   divergence
B)   convergence
C)   expansion
D)   contractionE) A) and C)
F) A) and B)

Question 13

Typically,joint ventures involve less control and risk than franchising.

Accepted Answer

A) True 
 B)False

Question 14

When the GE wind energy business tapped into world-wide talent,it was able to expand using a(n) _________________ strategy.

Accepted Answer

A)   focus
B)   diversification
C)   unrelated
D)   genericE) B) and D)
F) C) and D)

Question 15

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

Accepted Answer

A) True 
 B)False

Question 16

L'Oreal acquired two U.S.firms that developed and sold hair care products to African-American customers.This permitted it to build a new ethnic hair care division in Europe and Africa.This represents an advantage of international expansion using ____________.

Accepted Answer

A)   arbitrage
B)   optimization of the location of value-chain activities
C)   performance enhancement
D)   learning opportunitiesE) A) and B)
F) All of the above

Question 17

In reviewing the Indian Software industry and the diamond of national advantage,which of the following is a growing detractor to the national competitive advantage in this industry?

Accepted Answer

A)   English-language capability
B)   growing market and sophisticated, customers
C)   duty-free access to imported computers and software
D)   rise of competing low-labor-cost countriesE) B) and C)
F) All of the above

Question 18

A multidomestic strategy is the most appropriate strategy for international operations,because it drives economies of scale as far as possible and provides a middle-of-the-road product that appeal to the largest number of consumers in every market.

Accepted Answer

A) True 
 B)False

Question 19

A __________ is a business in which a multinational company owns 100 percent of the stock.

Accepted Answer

A)   wholly owned subsidiary
B)   strategic alliance
C)   joint venture
D)   franchising operationE) B) and D)
F) B) and C)

Question 20

A limitation of a multidomestic strategy is that it may lead to over-adaptation as conditions change.

Accepted Answer

A) True 
 B)False

Exam 7: International Strategy: Creating Value in Global Markets

Which of these points on the Porter diamond of national advantage is the strongest indicator of global competitive success?

Correct AnswerverifiedShow Answer

In a global strategy a firm operates all of its businesses under a single common strategy,regardless of location.

Correct AnswerverifiedShow Answer

A limitation of a multidomestic strategy is that it may lead to over-adaptation as conditions change.

Correct AnswerverifiedShow Answer

Major Western hemisphere trade blocs include NAFTA,Mercosur,and ASEAN.

Correct AnswerverifiedShow Answer

Typically,joint ventures involve less control and risk than franchising.

Correct AnswerverifiedShow Answer

In reviewing the Indian Software industry and the diamond of national advantage,which of the following is a growing detractor to the national competitive advantage in this industry?

Correct AnswerverifiedShow Answer

L'Oreal acquired two U.S.firms that developed and sold hair care products to African-American customers.This permitted it to build a new ethnic hair care division in Europe and Africa.This represents an advantage of international expansion using ____________.

Correct AnswerverifiedShow Answer

A firm can establish a wholly owned subsidiary by

Correct AnswerverifiedShow Answer

When the GE wind energy business tapped into world-wide talent,it was able to expand using a(n) _________________ strategy.

Correct AnswerverifiedShow Answer

A __________ is a business in which a multinational company owns 100 percent of the stock.

Correct AnswerverifiedShow Answer

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to adapt locally,companies should choose a(n) __________ or __________ in order to compete in the global marketplace.

Correct AnswerverifiedShow Answer

Exporting is an expensive way to enter foreign markets.

Correct AnswerverifiedShow Answer

There are risks associated with the Bottom of the Pyramid strategy.One of them is that the new low-cost products that are developed may cannibalize the sales of the core products of the company using the strategy.

Correct AnswerverifiedShow Answer

In international markets,a disadvantage of licensing is that the firm granting a license incurs little risk,since it does not have to invest any significant resources into the country itself.

Correct AnswerverifiedShow Answer

Statistics indicate that over half of the world output now comes from emerging markets.This is leading to a(n) ___________ of living standards across the globe and is changing the face of business.

Correct AnswerverifiedShow Answer

Which of the following is not a risk normally associated with Bottom of the Pyramid strategies?

Correct AnswerverifiedShow Answer

A multidomestic strategy is the most appropriate strategy for international operations,because it drives economies of scale as far as possible and provides a middle-of-the-road product that appeal to the largest number of consumers in every market.

Correct AnswerverifiedShow Answer

When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to lower costs,companies should choose a(n) __________ or __________ in order to compete in the global marketplace.

Correct AnswerverifiedShow Answer

To be responsive to local pressures,companies must ____________ their offerings and strategies from country to country to reflect local consumer preferences.

Correct AnswerverifiedShow Answer

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

Correct AnswerverifiedShow Answer

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When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to adapt locally,companies should choose a(n) or in order to compete in the global marketplace.

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When firms expand into global markets,they are faced with the choice of reducing costs and/or adapting to the local market.When high pressures exist to lower costs,companies should choose a(n) or in order to compete in the global marketplace.

Correct Answer
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