Chapter Practice

QuestionAnswerthe trend towards humanitywide markets makes it easier to predict where competitors will spring up. align or out of true? faithlesslybeca work m whatsoever countries are investing in countries other than their own, each country is becoming more autonomous and independent. true or delusive?falsean vantage of international expansion is that competition within contrasted countries is generally actually similar to that of the US. true or false?falseIn michael porters diamond of competitive value there are 4 broad attributes that, as a system, constitute a nations competitiveness in an industry. true or false?truethe factor endowments of a country are inherited and arsenot be created. true or false?falsewith regard to factor conditions the pool of resources that a steadfast has is much more weighty than the speed and efficiency with which these resources are deployed. true or false?falsedemanding domestic consumers tend to push firms to move ahead of companies in other countries where consumers are less(prenominal) demanding and more complacent. true or false?truehigh levels of environmental awareness in Denmark take hold led to a regrets in Denmarks industrial competitiveness in the international marketplace. true or false?falsecountries with a strong supplier base win by adding efficiency to upstream activities. true or false?truetypically, intense rivalry in domestic markets does not force firms to look outside their national boundaries for new markets. true or false?falsemany international firms are increasing their efforts to market their products and services to countries such as India and China as the ranks of their middle class continue to increase. true or false?trueinternational expansion nominate extend the life cycle of a product that is in its maturity stage in a firms home country. true or false?truean advantage of international expansion is that it stand enable a firm to optimize the location of every activity in its val ue chain. true or false?truethe laws, and the enforcement of laws, associated with the protection of intelligent property rights, represent a significant currency and perplexity risk to multinational firms. true or false?falsedifferences in foreign markets such as culture, language, and customs can represent significant management risks when firms enter foreign markets. true or false?trueoffshoring takes place when a firm decides to shift an activity that they were previously per varianceing in a domestic location to a foreign location. true or false?true2 opposing pressures that managers reflection when they compete in foreign markets are cost reduction and adaption to local markets. true or false?truetheodore levitt has argued that people or so the world are unstrained to sacrifice preferences in product features, functions, and design if they are offered lower prices and high quality. true or false?trueamong theordore levitts assumptions that would favor a global outline is that consumers around the world are becoming less price sensitive. true or false?falsewithin a worldwide market, the closely effective strategies are neither purely multidomestic nor purely global. true or false?trueindustries in which proportionally more value is added in upstream activities are more likely to benefit from a global strategy than those in which more value is added downstream. true or false?truein a global strategy a firm operates all its businesses low a single plebeian strategy regardless of location. true or false?truea multidomestic strategy is the most attach strategy for international trading operations because it drives economies of cuticle as far as possible and provides a middle of the road product appealing to the galacticst number of consumers in every market. t or f?falsethe need to attain economies of scale encourages multinational firms to operate under a multidomestic strategy. true or false?falsecorporations with multiple foreign operations t hat act very independently of one another are by-line a multidomestic strategy. true or false?truea multidomestic strategy would likely include the use of high volume, change production facilities to maximize economies of scale. true or false?falsea limitation of a multidomestic strategy is that it may maneuver to over allowance as conditions change. true or false?truemultinational firms following a transnational strategy strive to optimize the manageoffs associated with efficiency, local adaptation, and learning. true or false?truea key tenet of transnational strategy is improved adaptation to all competitive situations as well as flexibility by capitalizing on communication and knowledge flows throughout the organization. true or falsetrueaccording to studies by Rugman and Verbeke, most of the worlds 500 firms are global- not regional or biregional. true or false?falsea franchise generally expires after a few years whereas a license is designed to last into perpetuity. true or false?falsetypically joint ventures involve less control and risk than franchising. true or false?falsetypically the shell method of entry into a foreign market is the establishment of a wholly have foreign subsidiary so that the parent organization can maintain a high level of control. true or false?falsea major trend in international developments includegreater international trade and operations, growing recognition of an international managerial perspective, a large increase in international investmentthe reasons that explain why some governments make better use of the inflows from foreign investment and know how than others includegovernmental practices that are business friendly, local entrepreneurs that can train workers and invest in modern technology, sound management of broader economic factors such as interest rates and inflationaccording to michael porters framework all of these factors affect a nations competitivenessfactor conditions, demand characteristics, related and supported industriesrivalry is intense in nations with conditions of ____ consumer demand, _____ supplier bases, and _____ new entrant potential from related industriesstrong, strong, highaccording to michael porter, firms that have experienced intense domestic competition aremore likely to design strategies and structures that allow them to successfully compete abroad.all of these factors have made Indias software services industry extremely competitive on a global scalelarge pool of skilled workers, large net of public and private educational institutions, large, growing market and sophisticated customersadvantages of global diversificationfirm not being solely dependent on domestic market, firm with large margins at home helping subsidize its operations in other nations, potential to lower costs of operation even if the primary market is at homeoptimizing the location of every activity in the value chain can yield all of these strategic advantagesperformance enhancements, co st reduction, extending the life cycle of the product or serviceMicrosoft decided to establish a corporate research laboratory in Cambridge, Englandto access the outstanding technical and professional talent available there so that they can attain world class excellence in selected value creating activitiesthe sale of boeings commercial aircraft and microsofts operating systems in many countries enable these companies to benefit fromeconomies of scaleMany US multinational companies set up maquiladora operations south of the US-Mexico border primarilyto take advantage of the low cost of laborappreciation of the US dollar will have this clashing on McDonaldslower profits, because foreign profits will be reduced when measured in dollarsThis occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in houseoutsourcingwhat is one of Theodore Levitts assumptions supporting a pure global strategy?MNCs can compete with aggressive pricing on low cost products that meet the common needs of global consumerspressures to reduce costs require thata company must pursue what is economically beneficial to the company including maximizing economies of scale and learning stoop effectsLow pressure for local adaptation feature with low pressure for lower costs would suggest what type of strategy?internationalHigh pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy?multidomesticSoftware Tech Inc. a company in the computer software industry, invests intemperately in R&D and product design. Thus, most of its value is addedupstreamIndustries in which proportionally more value is added in _____ activities are more likely to benefit from a ______ strategy.upstream, globalWhat types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy?firms in industries that have much value added in research and d esign or manufacturingRecent trends that might pass on to managers of multinational corporations to adopt a more decentralized strategy for their operations would includeconsumers are the world are increasingly willing to trade off idiosyncratic preferences in product features for lower price, flexible mftg trends have allowed a decline in the min volume required to reach acceptable levels of production efficiencyFirms following a global strategy strive to offer ______ products and services as well as locate manufacturing, R&D, and marketing activities in ______ locations.standardized, fewGilletes worldwide success with its Sensor razor demonstratesthat a global marketing effort can sometimes be successfulas in the case of Siebel systems, elements of a global strategy may facilitate the competitive advantage of differentiation bythe earth of a world wide network to achieve consistent service regardless of location.risks associated with global strategyfirm with only one mfg locatio n must export its product, geographic concentration of any activity may also tend to isolate that activity from the target market, concentrating an activity in a single location makes the firm dependent on that locationlimitations of global strategylimited ability to adapt to local markets, concentration of activities may increase dependence on single facility, single locations may lead to higher tariffs and transportation costsElements of a multidomestic strategy may facilitate the competitive advantage of cost leadership bydecreased shipping and transportation costs inherent in local productionlimitations of a multidomestic strategyless ability to realize cost savings through scale economies, greater difficulty in transferring knowledge across countries, may lead to overadpatation as conditions changehigh pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy?transnationalUnits coordinate their activities with he adquarters and one another, units adapt to special circumstances only the face, and the entire org draws upon relevant corporate resources. These are attributes oftransnational strategyWhat is a disadvantage of a transnational strategy?unique managerial challenges in fostering knowledge transferin order to realize the strongest competitive advantage, firms engaged in worldwide competition mustpursue a strategy that combines the consent of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal resultsAccording to studies by Rugman and Verbeke, approx how many of the worlds largest 500 firms are global, that is, they have at least 20% of their total revenues each in North America, Asia, and Europe?10What describes the most typical order of entry into foreign markets?exporting, licensing, franchising, joint venture, and wholly owned subsidiarya domestic corporation considering expanding into international markets for the first time will typically consider implementing a low risk/low control strategy such as exportingThe form of entry strategy into operations that offers the lowest level of control would beexportingFees that a multinational receives from a foreign licensee in return for its use of intellectual property are usually calledroyaltiesthe difference between a franchise and licensing contract is thata franchise contract is more specific and longer in duration_________ entails the creation of a third party legal entity whereas _______ do not.joint ventures, strategic alliancesa business in which a multinational company owns 100% of the stockwholly owned subsidiaryThis is most appropriate where a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countrieswholly owned subsidiaries