Chapter 13: The Strategy of International Business

Question 1

capability

Answer 1

a special type of resource that improves the productivity of a firm’s related resources

Question 2

concentrated configuration

Answer 2

when some activity of the value chain is performed in one geographic location and serves the world from it

Question 3

configuration

Answer 3

the set up of value activities to ideal locations around the world so the company can start and sustain operations

Question 4

core competency

Answer 4

A special outlook, skill, capability, or technology that runs through the firm’s operations, weaving together disparate value activities into an integrated value chain; managers bundle resources and capabilities to create a core competency

Question 5

dispersed configuration

Answer 5

a value chain where a particular activity is performed in many geographic locations and serves the world market from any to all of its units

Question 6

Economies of scale

Answer 6

The lowering of cost per unit as output increases because of allocation of fixed costs over more units produced

Question 7

global integration

Answer 7

Integration into one global market of distinct national economic systems

Question 8

Global Strategy

Answer 8

A strategy that increases profitability by achieving cost reductions from experience curves and location economies

Question 9

Great by Choice

Answer 9

managers’ choices are the basis of building and sustaining a high-performance enterprise in unpredictable, tumultuous, and fast-moving times

Question 10

Industry Structure

Answer 10

the makeup of an industry: its number of sellers and their size distribution, the nature of the product, and the extent of barriers to entry

Question 11

Integration Responsiveness (IR) Grid

Answer 11

schema that helps managers measure the global and local pressures on the operations of value chains

Question 12

International Strategy

Answer 12

creating value by transferring core competencies from the home market to foreign markets where local competitors lack those competencies

Question 13

liability of foreignness

Answer 13

foreign companies’ lower survival rate in comparison to local companies in the long-run

Question 14

Location Advantages/Economies

Answer 14

cost advantages from performing a value activity in the optimal location

Question 15

Localization Strategy

Answer 15

responding to unique conditions in different national markets

Question 16

mission

Answer 16

statement that defines the business, its objectives, and its approach to achieve them

Question 17

primary activities

Answer 17

The line activities that compose the value chain. Specifically, inbound logistics, operations, outbound logistics, marketing, and service.

Question 18

Resources

Answer 18

Inputs, owned or controlled by the MNE, that supports its production process

Question 19

strategy

Answer 19

set of commitments that reflects the company’s present situation, identifies the direction it should go, and determines how it will get there.

Question 20

Support Strategies

Answer 20

general infrastructure of a firm that anchors the day-to-day execution of primary activities of the value chain

Question 21

Transnational Strategy

Answer 21

configuring a value chain to exploit location economies and coordinate activities to leverage core competencies while responding to local pressures

Question 22

Value

Answer 22

a measure of a firm’s ability to sell what it makes for more the costs incurred to make it; the ultimate purpose of strategy

Question 23

vision

Answer 23

The idealization of what an MNE firms wants to be. It expresses, in broad terms, its ultimate goal