Question 1

Which of the following is a disadvantage of a strategic alliance?

Accepted Answer

A)  Entering into a strategic alliance makes it difficult for a firm to enter into a foreign market.
B)  As a result of strategic alliance,fixed costs of developing new products tend to increase.
C)  Strategic alliance gives competitors a low-cost route to new technology and markets.
D)  Firms that enter into a strategic alliance with a foreign firm tend to face higher trade barriers.
E)  Strategic alliance always leads to a loss to either of the firms involved.F) B) and D)
G) B) and C)

Question 2

Describe the localization strategy.

Accepted Answer

A localization strategy focuses on incre...

Question 3

An international strategy involves taking products first produced for their domestic market and selling them internationally with only minimal local customization.

Accepted Answer

A) True 
 B)False

Question 4

According to Michael Porter,what are the two basic strategies for creating value and attaining a competitive advantage in an industry?

Accepted Answer

A)  differentiation and low-cost
B)  value creation and generalization
C)  one-size-fits-all and zero-sum
D)  comparison and standardization
E)  profitability and strategic fitF) D) and E)
G) None of the above

Question 5

The value creation activities of a firm are categorized as

Accepted Answer

A)  primary activities and support activities.
B)  strategic activities and functional activities.
C)  ancillary functions and tertiary functions.
D)  primary activities and core activities.
E)  goal-oriented activities and organizational activities.F) C) and D)
G) All of the above

Question 6

What are strategic alliances?

Accepted Answer

Strategic alliances are cooperative agre...

Question 7

The appropriateness of the strategy that a firm chooses to use in an international market varies with the extent of pressures for

Accepted Answer

A)  quality improvement and product standardization.
B)  customer surplus and quality improvements.
C)  customer surplus and product standardization.
D)  cost reductions and local responsiveness.
E)  product standardization and cost reductions.F) B) and D)
G) All of the above

Question 8

Which of the following refers to systematic reductions in production costs that have been observed to occur over the life of a product?

Accepted Answer

A)  experience curve
B)  learning effects
C)  location economies
D)  efficiency slope
E)  economies of scaleF) A) and B)
G) C) and D)

Question 9

A company can increase its growth rate by taking goods or services developed at home and selling them internationally.The returns from such a strategy are likely to be greater if

Accepted Answer

A)  the product is already being offered by local companies in the nations that the company enters.
B)  the product is a generic product that requires little differentiation.
C)  indigenous competitors in the nations that the company enters lack comparable products.
D)  there is a high inflation in the nations that the company enters.
E)  the product is perceived to be very costly in the home country of the company.F) B) and C)
G) A) and E)

Question 10

Successful global expansion requires the transfer of core competencies to foreign markets where indigenous competitors lack them.

Accepted Answer

A) True 
 B)False

Question 11

Location economies are the economies that arise from performing a value creation activity in the optimal location for that activity,wherever in the world that might be.

Accepted Answer

A) True 
 B)False

Question 12

Maintaining the company infrastructure is a support activity.

Accepted Answer

A) True 
 B)False

Question 13

What constitutes an organizational structure?

Accepted Answer

Organizational structure consists of thr...

Question 14

In general,the more value customers place on a firm's products

Accepted Answer

A)  the lesser the profitability of the firm.
B)  the higher the competitive pressure from other firms.
C)  the lesser the quality of the product.
D)  the lesser the consumer surplus for those products.
E)  the higher the price the firm can charge for those products.F) All of the above
G) A) and E)

Question 15

Which of the following is true of a firm that pursues a global standardization strategy?

Accepted Answer

A)  It ensures that it pursues a high-cost strategy on a global scale.
B)  It has its production,marketing,and R&D activities in only one optimum location.
C)  It tries to customize its products to local conditions.
D)  It has shorter production runs.
E)  It reaps maximum benefits from economies of scale and learning effects.F) C) and D)
G) B) and E)

Question 16

Firms that compete in the global marketplace typically face two types of competitive pressure

Accepted Answer

A)  pressures for increasing investment and pressures to minimize consumer surplus.
B)  pressures for labor skill enhancement and pressures to minimize economies of scale.
C)  pressures for cost reductions and pressures to be locally responsive.
D)  pressures for global promotions and pressures to move down the efficiency frontier.
E)  pressures for product standardization and pressures to move up the experience curve.F) A) and D)
G) None of the above

Question 17

Which of the following conditions is most favorable to reap gains from global scale economies?

Accepted Answer

A)  low demand for local responsiveness
B)  high pressures for cost reduction
C)  lack of universal needs
D)  national differences in accepted business practices
E)  high pressure to delegate production to domestic subsidiariesF) B) and E)
G) C) and D)

Question 18

Which of the following strategies is a firm most likely to pursue when it simultaneously faces both strong cost pressures and strong pressures for local responsiveness?

Accepted Answer

A)  global standardization strategy
B)  localization strategy
C)  international strategy
D)  transnational strategy
E)  nationalization strategyF) C) and E)
G) D) and E)

Question 19

A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a low-cost strategy.

Accepted Answer

A) True 
 B)False

Question 20

A cooperative agreement between potential or actual competitors is called a(n)

Accepted Answer

A)  tactical union.
B)  strategic alliance.
C)  political affiliation.
D)  economic association.
E)  nationalization.F) A) and E)
G) A) and D)

Exam 12: The Strategy of International Business

Successful global expansion requires the transfer of core competencies to foreign markets where indigenous competitors lack them.

Correct AnswerverifiedShow Answer

Maintaining the company infrastructure is a support activity.

Correct AnswerverifiedShow Answer

In general,the more value customers place on a firm's products

Correct AnswerverifiedShow Answer

Which of the following refers to systematic reductions in production costs that have been observed to occur over the life of a product?

Correct AnswerverifiedShow Answer

What constitutes an organizational structure?

Correct AnswerverifiedOrganizational structure consists of thr...View AnswerShow Answer

An international strategy involves taking products first produced for their domestic market and selling them internationally with only minimal local customization.

Correct AnswerverifiedShow Answer

A company can increase its growth rate by taking goods or services developed at home and selling them internationally.The returns from such a strategy are likely to be greater if

Correct AnswerverifiedShow Answer

Describe the localization strategy.

Correct AnswerverifiedA localization strategy focuses on incre...View AnswerShow Answer

Which of the following is true of a firm that pursues a global standardization strategy?

Correct AnswerverifiedShow Answer

The value creation activities of a firm are categorized as

Correct AnswerverifiedShow Answer

A cooperative agreement between potential or actual competitors is called a(n)

Correct AnswerverifiedShow Answer

According to Michael Porter,what are the two basic strategies for creating value and attaining a competitive advantage in an industry?

Correct AnswerverifiedShow Answer

A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a low-cost strategy.

Correct AnswerverifiedShow Answer

What are strategic alliances?

Correct AnswerverifiedStrategic alliances are cooperative agre...View AnswerShow Answer

Which of the following conditions is most favorable to reap gains from global scale economies?

Correct AnswerverifiedShow Answer

Which of the following strategies is a firm most likely to pursue when it simultaneously faces both strong cost pressures and strong pressures for local responsiveness?

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of a strategic alliance?

Correct AnswerverifiedShow Answer

Firms that compete in the global marketplace typically face two types of competitive pressure

Correct AnswerverifiedShow Answer

Location economies are the economies that arise from performing a value creation activity in the optimal location for that activity,wherever in the world that might be.

Correct AnswerverifiedShow Answer

The appropriateness of the strategy that a firm chooses to use in an international market varies with the extent of pressures for

Correct AnswerverifiedShow Answer

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Organizational structure consists of thr...
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A localization strategy focuses on incre...
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Strategic alliances are cooperative agre...
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