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Question 1

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

Answer 1

D. , New products may be perceived as exploiting the privileged customer with substandard products

Question 2

Multinational firms are constantly faced with the dilemma of choosing between _______ and __________. A. , local adaptation; global integrationB. , local adaptation; local integrationC. , global adaptation; local integrationD. , global adaptation; global integration

Answer 2

A. , local adaptation; global integration

Question 3

In the Porter Diamond of National Advantage framework which of the following factors does not affect nation competitiveness? A. , The position of the nation in factors of production necessary to compete in a given industry.B. , The presence or absence in the nation of supplier industries that are internationally competitive.C. , The conditions in the nation governing the nature of foreign rivalry.D. , The nature of home-market demand of the products or services of the industry.

Answer 3

C. , The conditions in the nation governing the nature of foreign rivalry.

Question 4

Rivalry is intense in nations with conditions of __________ consumer demand, __________ supplier bases, and __________ new entrant potential from related industries. A. , weak; weak; highB. , strong; strong; lowC. , weak; weak; lowD. , strong; strong; high

Answer 4

D. , strong; strong; high

Question 5

According to Michael Porter, firms that have experienced intense domestic competition are _________________________________. A. , unlikely to have the time or resources to compete abroadB. , more likely to demand protection from their governmentsC. , most likely to design strategies aimed primarily at the domestic marketD. , more likely to design strategies and structures that allow them to successfully compete abroad

Answer 5

D. , more likely to design strategies and structures that allow them to successfully compete abroad

Question 6

Which of the factors below has not made the software services industry in India extremely competitive on a global scale? A. , large pool of skilled workersB. , large network of public and private educational institutionsC. , tax and antitrust legislation that protects the dominant players in the industryD. , large, growing market and sophisticated customers

Answer 6

C. , tax and antitrust legislation that protects the dominant players in the industry

Question 7

Which of the following is not a motivation for a company to pursue international expansion? A. , It wishes to increase the size of the potential markets for its products and services.B. , It wishes to take advantage of arbitrage opportunities in order to increase profit.C. , It wishes to optimize value-chain activities to enhance performance, reduce costs, and reduce risk.D. , It wishes to increase foreign market penetration by developing products for the home market.

Answer 7

D. , It wishes to increase foreign market penetration by developing products for the home market.

Question 8

If a company is considering optimizing the physical location for every activity in the value chain, which of the following is not a possible strategic advantage for that decision? A. , Performance enhancementB. , Cost reductionC. , Political risk reductionD. , Life-cycle enhancement

Answer 8

D. , Life-cycle enhancement

Question 9

The sale of Boeing commercial aircraft and Microsoft operating systems in many countries enables these companies to benefit from ____________. A. , higher prices in their domestic marketsB. , reducing their exposure to currency risksC. , economies of scaleD. , optimizing the location for many activities in their value chain

Answer 9

C. , economies of scale

Question 10

If the U.S. dollar appreciates relative to foreign currency, what is likely to be the result for the U.S. company that has company branches abroad? A. , Profits will increase, when measured in U.S. dollars.B. , Profits will decrease, when measured in U.S. dollars.C. , Foreign exports to the United States will decrease.D. , Foreign demand for U.S. goods and services will decrease.

Answer 10

B. , Profits will decrease, when measured in U.S. dollars.

Question 11

__________ occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house. A. , OffshoringB. , A global strategyC. , OutsourcingD. , A transnational strategy

Answer 11

C. , Outsourcing

Question 12

In considering the decision to offshore, which of the following generally is not one of the hidden costs? A. , Total wage costs and indirect costsB. , Increased inventory and coordination costsC. , Reduced market responsiveness and intellectual property rightsD. , Wage deflation

Answer 12

D. , Wage deflation

Question 13

Which one of the following is one of the Theodore Levitt assumptions supporting a pure global strategy? A. , Consumers are willing to pay more for specific product features.B. , Customer needs and interests are becoming more dissimilar.C. , MNCs can successfully compete globally by aggressively pricing products at the sacrifice of product features.D. , If the world markets are treated as heterogeneous, substantial economies of scale are easily achieved.

Answer 13

C. , MNCs can successfully compete globally by aggressively pricing products at the sacrifice of product features.

Question 14

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 __________ or __________ in order to compete in the global marketplace. A. , global strategy; transnational strategyB. , global strategy: multidomestic strategyC. , international strategy; multidomestic strategyD. , international strategy; transnational strategy

Answer 14

A. , global strategy; transnational strategy

Question 15

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 __________ or __________ in order to compete in the global marketplace. A. , global strategy; transnational strategyB. , global strategy: multidomestic strategyC. , international strategy; global strategyD. , transnational strategy; multidomestic strategy

Answer 15

D. , transnational strategy; multidomestic strategy

Question 16

Which would be the appropriate strategy for companies to use to compete in the global marketplace if the marketplace pressure is for lower costs with little pressure for local adaptation? A. , international strategyB. , global strategyC. , multidomestic strategyD. , transnational strategy

Answer 16

A. , international strategy

Question 17

High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy? A. , global strategyB. , multidomestic strategyC. , transnational strategyD. , overall cost leadership strategy

Answer 17

B. , multidomestic strategy

Question 18

Software Tech, Inc., a company in the computer software industry, invests heavily in Research and Development, and product design. Thus, most of its value is added ________. A. , upstreamB. , in its infrastructureC. , downstreamD. , midstream

Answer 18

A. , upstream

Question 19

Industries in which proportionally more value is added in __________ activities are more likely to benefit from a global strategy. A. , downstreamB. , upstreamC. , marketingD. , sales

Answer 19

B. , upstream

Question 20

Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy? A. , firms that compete in industries in which consumer preferences vary substantially in each countryB. , firms in industries that are expanding very rapidlyC. , firms in industries that have value added by sales and marketing departmentsD. , firms in industries that have much value added in research and design or manufacturing

Answer 20

D. , firms in industries that have much value added in research and design or manufacturing

Question 21

, Recent trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following EXCEPT ______. A. , customer needs, interests, and tastes becoming increasingly homogenizedB. , consumers around the world increasingly willing to tradeoff idiosyncratic preferences in product features for lower priceC. , flexible manufacturing trends allowing a decline in the minimum volume required to reach acceptable levels of production efficiencyD. , fluctuating exchange rates

Answer 21

A. , customer needs, interests, and tastes becoming increasingly homogenized

Question 22

Firms following a global strategy strive to offer __________ products and services as well as locate manufacturing, Research and Development, and marketing activities in a limited number of locations. A. , widely differentiatedB. , more expensive localC. , internationally differentiatedD. , standardized

Answer 22

D. , standardized

Question 23

As in the case of Siebel Systems (now part of Oracle), elements of a global strategy may facilitate the competitive advantage of differentiation by _______. A. , increased freedom of individual business units to adapt to local tastesB. , the creation of a worldwide network to achieve consistent service regardless of locationC. , flexibility in applying Research and Development to meet country-specific needsD. , tailoring products to meet country-specific needs

Answer 23

B. , the creation of a worldwide network to achieve consistent service regardless of location

Question 24

Which of the following is not a risk associated with a global strategy? A. , A firm with only one manufacturing location must export its product, sometimes at great distance from the operation.B. , The geographic concentration of any activity may also tend to isolate that activity from the targeted markets.C. , Concentrating an activity in a single location makes the rest of the firm dependent on that location.D. , The pressures for local adaptation may elevate the cost structure of the firm.

Answer 24

D. , The pressures for local adaptation may elevate the cost structure of the firm.

Question 25

Which one of the following is not a limitation of a global strategy? A. , limited ability to adapt to local marketsB. , the ability to locate activities in optimal locationsC. , the concentration of activities may increase dependence on a single facilityD. , single locations may lead to higher tariffs and transportation costs

Answer 25

B. , the ability to locate activities in optimal locations

Question 26

., Elements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by __________. A. , flexibility in adjusting to local laws and customsB. , decreased duplication of inventories which are often involved in having multiple plants producing similar productsC. , decreased shipping and transportation costs inherent in local productionD. , economies of scale gained through centralized production of standardized products

Answer 26

C. , decreased shipping and transportation costs inherent in local production

Question 27

Which of the following is not a limitation of a multidomestic strategy? A. , less ability to realize cost savings through scale economiesB. , greater difficulty in transferring knowledge across countriesC. , single locations may lead to higher tariffs and transportation costsD. , may lead to overadaptation as conditions change

Answer 27

C. , single locations may lead to higher tariffs and transportation costs

Question 28

High pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy? A. , global strategyB. , multidomestic strategyC. , transnational strategyD. , differentiation strategy

Answer 28

C. , transnational strategy

Question 29

Units coordinate their activities with headquarters and with one another. Units adapt to special circumstances only they face. The entire organization draws upon relevant corporate resources. These are all attributes of which type of strategy? A. , global strategyB. , transnational strategyC. , international strategyD. , multidomestic strategy

Answer 29

B. , transnational strategy

Question 30

Which of the following is a disadvantage of a transnational strategy? A. , less ability to realize cost savings through scale economiesB. , limited ability to adapt to local marketsC. , unique managerial challenges in fostering knowledge transferD. , single locations may lead to higher tariffs and transportation costs

Answer 30

C. , unique managerial challenges in fostering knowledge transfer

Question 31

In order to realize the strongest competitive advantage, firms engaged in worldwide competition must ___________. A. , require that all of their various business units follow the same strategy regardless of locationB. , ensure that all business units follow a strategy strictly tailored to their respective locationsC. , pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal resultsD. , attempt to use the strategy that was most successful in their home country

Answer 31

C. , pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal results

Question 32

Which of the following is a reason for the rise in regional expansion? A. , increase in the number of trading blocs and free trade zonesB. , decrease in the number of trading blocs and free trade zonesC. , increasing national trade restrictionsD. , increasing local taxes and tariffs

Answer 32

A. , increase in the number of trading blocs and free trade zones

Question 33

Which one of the following explains why so few firms are global? A. , Culture, language, and religion are similar between countries.B. , Legal and political systems are similar between countries.C. , Governments are increasing trade restrictions in general.D. , Geographic distance is multiplied by distance in culture, language, religion, and legal and political systems.

Answer 33

D. , Geographic distance is multiplied by distance in culture, language, religion, and legal and political systems.

Question 34

Which of the following describes the most typical order of entry into foreign markets? A. , franchising, licensing, exporting, joint venture, and wholly owned subsidiaryB. , exporting, licensing, franchising, joint venture, and wholly owned subsidiaryC. , licensing, exporting, franchising, joint venture, and wholly owned subsidiaryD. , exporting, franchising, licensing, joint venture, and wholly owned subsidiary

Answer 34

B. , exporting, licensing, franchising, joint venture, and wholly owned subsidiary

Question 35

., A domestic corporation considering international expansion for the first time typically will follow which of these paths? A. , It will start off by implementing a wholly owned foreign subsidiary in order to maintain standards identical to those at home.B. , It will license or franchise its operations.C. , It will implement a low risk-low control strategy such as exporting.D. , It will form a joint venture with a reputable foreign producer.

Answer 35

C. , It will implement a low risk-low control strategy such as exporting.

Question 36

The form of entry strategy into international operations that offers the lowest level of control for the domestic corporation would be _________. A. , franchisingB. , licensingC. , joint ventureD. , exporting

Answer 36

D. , exporting

Question 37

Fees that a multinational receives from a foreign licensee in return for its use of intellectual property (trademark, patent, trade secret, technology) are usually called _____________. A. , transfer pricesB. , dividendsC. , royaltiesD. , intra-corporate inflows

Answer 37

C. , royalties

Question 38

The difference between a franchise contract and a licensing contract is that ___________. A. , a franchise contract is more specific and usually longer in durationB. , a franchise contract must include a foreign governmentC. , a licensing contract covers more aspects of operationsD. , a franchise contract involves less control and less risk

Answer 38

A. , a franchise contract is more specific and usually longer in duration

Question 39

__________ entail the creation of a third-party legal entity, whereas __________ do not. A. , Licensing agreements; joint venturesB. , Joint ventures; strategic alliancesC. , Strategic alliances; joint venturesD. , Franchising agreements; strategic alliances

Answer 39

B. , Joint ventures; strategic alliances

Question 40

A __________ is a business in which a multinational company owns 100 percent of the stock. A. , joint ventureB. , strategic allianceC. , wholly owned subsidiaryD. , franchising operation

Answer 40

C. , wholly owned subsidiary

Question 41

__________ are most appropriate when a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries. A. , Joint venturesB. , Strategic alliancesC. , Licensing agreementsD. , Wholly owned subsidiaries

Answer 41

D. , Wholly owned subsidiaries

Question 42

PepsiCo leads Coca-Cola in the Indian market. Why? A. , PepsiCo entered the market before Coca-Cola.B. , PepsiCo formed a joint venture with two Indian companies to introduce its products under their label.C. , Coca-Cola promoted too many products.D. , Coca-Cola created too much direct employment in the beginning of its operation.

Answer 42

B. , PepsiCo formed a joint venture with two Indian companies to introduce its products under their label.