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Exam 13: The Strategy of International Business

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Question 51

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Which of the following statements is NOT true?

A) The way to increase the profitability of a firm is to create more value.
B) The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products.
C) The more value customers place on a firm's products,the higher the price the firm is able to charge for those products.
D) The price a firm charges for a good or service is typically more than the value the customer places on that good or service.

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

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Question 52

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The efficiency frontier has a convex shape because of:

A) consumer surplus.
B) diminishing returns.
C) profitability.
D) differentiation strategy.

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

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Question 53

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Describe localization strategy.

For a firm,all positions on the efficiency frontier are viable.

Discuss the factors that lead to pressure for local responsiveness.

_____ can be defined as the rate of return that the firm makes on its invested capital,which is calculated by dividing the net profits of the firm by total invested capital.

Economies of scale arise from all of the following sources,EXCEPT:

_____ refer(s) to systematic reductions in production costs that have been observed to occur over the life of a product.

Which of the following is less likely to add to the pressure for a firm to be locally responsive?

Because differentiation across countries can involve significant duplication and a lack of product standardization,it may reduce costs.

Universal needs exist when the tastes and preferences of consumers in different nations are similar if not identical.

Consider the firm in terms of a value chain.What is the difference between primary activities and support activities? Provide examples of each.

A firm benefits by basing each value creation activity it performs at that location where economic,political,and cultural conditions,including relative factor costs,are most conducive to the performance of that activity.Firms that pursue such a strategy can realize:

Economies that arise from performing a value creation activity in the optimal place for that activity are referred to as:

R&D,production,marketing and sales,and customer service are all examples of primary activities.

Support activities are always less important than the primary activities in achieving a competitive advantage.

Lenovo's ThinkPad laptop computers is designed in the United States,the case,keyboard,and hard drive are made in Thailand; the display screen and memory in South Korea; the built-in wireless card in Malaysia; and the microprocessor in the United States.In each case,these components are manufactured and sourced from the optimal location given current factor costs.In this example,Lenovo has:

Global expansion offers companies the opportunity to generate greater profits than companies that focus strictly on the domestic market.

Firms usually respond to pressures for cost reduction by trying to:

A global standardization strategy is appropriate when a firm is facing low pressures for cost reduction but high pressure for local responsiveness.