Firms following a global strategy strive to offer what types of products and services

., The trend towards worldwide markets makes it easier to predict where competitors will spring up.

FALSE
The rise of globalization, meaning the rise of market capitalism around the world, means competitors can now come from just about anywhere.

Because many countries are investing in countries other than their own, each country is becoming more autonomous and independent.

FALSE
Globalization, which is on the rise, has two meanings. One is the increase in international exchange, including trade in goods and services as well as exchange of money, ideas, and information. The second is the growing similarity of laws, rules, norms, values, and ideas across countries.

Increasing international exchange in goods and services can run into the difficulty of having one offer that meets the needs of customers at differing income levels.

TRUE
One of the challenges with globalization is determining how to meet the needs of customers at very different income levels. In many developing economies, distributions of income remain much wider than they do in the developed world, leaving many impoverished even as the economies grow.

., By 2015, it is predicted that trade within nations will exceed trade across nations.

FALSE
The trade among nations has increased dramatically in recent years and it is estimated that by 2015, the trade across nations will exceed the trade within nations.

There are risks associated with the Bottom of the Pyramid strategy. One of them is that the new low-cost products that are developed may cannibalize the sales of the core products of the company using the strategy.

TRUE
Firms need to actively manage the risks that accompany BOP strategies. These include concerns about the image of the firm if they are perceived as exploiting underprivileged customers by providing them with substandard products or selling them something they do not need or cannot afford. Second, there is a risk that a low-end version of a brand may detract from the overall attractiveness of the brand. Third, the new low-cost products they develop may cannibalize the sales of their core products. Finally, firms employing a BOP strategy need to be aware of the entrenched competitors they may face.

Emerging markets are growing slower than developed markets, thus shifting the structure of the global economy.

FALSE
The growth experienced by developed economies in the first decade of the 2000s was anemic, while the growth in developing economies was robust. This trend is continuing, with emerging markets growing 4 percent faster than developed markets in 2011 and 2012. This has resulted in a dramatic shift in the structure of the global economy. As of 2013, over half the world output will come from emerging markets.

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

FALSE
The Porter Diamond of National Advantage is a framework for explaining why countries foster successful multinational corporations, consisting of four factors: factor endowments; demand conditions; related and supporting industries; and firm strategy, structure, and rivalry.

The factor endowments of a country are inherited and cannot be created.

FALSE
Classical economics suggests that factors of production such as land, labor, and capital are the building blocks that create usable consumer goods and services. However, companies in advanced nations seeking competitive advantage over firms in other nations create many of the factors of production, such as skilled human resources.

With regard to factor conditions, the pool of resources that a firm (or nation) has is much more important than the speed and efficiency with which these resources are deployed.

FALSE
The pool of resources is less important than the speed and efficiency with which these resources are deployed. Thus, firm-specific knowledge and skills created within a country that are rare, valuable, difficult to imitate, and rapidly and efficiently deployed are the factors of production that ultimately lead to competitive advantage for the nation.

., Demanding domestic consumers tend to push firms to move ahead of companies in other countries where consumers are less demanding and more complacent.

TRUE
Countries with demanding consumers drive firms in that country to meet high standards, upgrade existing products and services, and create innovative products and services. Denmark is known for its environmental awareness. Demand from consumers for environmentally safe products has spurred Danish manufacturers to become leaders in water pollution control equipment which it exports successfully.

High levels of environmental awareness in Denmark have led to a decline in Danish industrial competitiveness in the international marketplace.

FALSE
Countries with demanding consumers drive firms in that country to meet high standards, upgrade existing products and services, and create innovative products and services. Denmark is known for its environmental awareness. Demand from consumers for environmentally safe products has spurred Danish manufacturers to become leaders in water pollution control equipment which it exports successfully.

Countries with a strong supplier base benefit by adding efficiency to downstream activities.

TRUE
Related and supporting industries enable firms to manage inputs more effectively. Countries with a strong supplier base benefit by adding efficiency to downstream activities. A competitive supplier base helps a firm obtain inputs using cost-effective, timely methods, thus reducing manufacturing costs.

Typically, intense rivalry in domestic markets does not force firms to look outside their national boundaries for new markets.

FALSE
Domestic rivalry provides a strong impetus for firms to innovate and find new sources of competitive advantage. This intense rivalry forces firms to look outside their national boundaries for new markets, setting up the conditions necessary for global competitiveness.

Many 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
Many multinational firms are intensifying their efforts to market their products and services to countries such as India and China as the ranks of their middle class have increased over the past decade. An OECD study predicts that consumption by middle-class consumers in Asian markets will grow from $4.9 trillion in 2009 to over $30 trillion by 2020. At that point, Asia will make up 60 percent of global middle-class consumption, up from 20 percent in 2009.

Expanding the global presence of a firm does not automatically increase its scale of operations.

FALSE
Expanding company global presence also automatically increases its scale of operations, providing it with a larger revenue and asset base. Such an increase in revenues and asset base potentially enables a firm to attain economies of scale. This provides multiple benefits including the spreading of fixed costs such as Research and Development over a larger volume of production. Examples include the sale of Boeing commercial aircraft and Microsoft operating systems in many foreign countries.

Arbitrage opportunities are more than simple trading opportunities and account for a large part of the success Walmart experiences.

TRUE
In its simplest form, arbitrage involves buying something from where it is cheap and selling it somewhere where it commands a higher price. A big part of the Walmart success can be attributed to its expertise in arbitrage. The possibilities for arbitrage are not necessarily confined to simple trading opportunities. It can be applied to virtually any factor of production and every stage of the value chain.

Arbitrage opportunities in global financial markets are more attractive to local companies than global corporations, because they enable them to buy in huge volume and therefore increase their bargaining power with suppliers.

FALSE
In the current integrated global financial markets, a firm can borrow anywhere in the world where capital is cheap and use it to fund a project in a country where capital is expensive. Such arbitrage opportunities are even more attractive to global corporations because their larger size enables them to buy in huge volume, thus increasing their bargaining power with suppliers.

International expansion can extend the life cycle of a product that is in its maturity stage in the company home country.

TRUE
Extending the life cycle of a product that is in its maturity stage in a firms home country but that has greater demand potential elsewhere is a benefit of international expansion. In recent decades, U.S. soft-drink producers such as Coca-Cola and PepsiCo have aggressively pursued international markets to attain levels of growth that simply would not be available in the United States.

., An advantage of international expansion is that it can enable a firm to optimize the location of every activity in its value chain

TRUE
Optimizing the physical location for every activity in its value chain is another benefit of international expansion. Optimizing the location for every activity in the value chain can yield one or more of three strategic advantages: performance enhancement, cost reduction, and risk reduction.

The laws and the enforcement of laws associated with the protection of intellectual property rights, represent a significant currency and management risk to multinational firms.

FALSE
There are four main types of risk: political risk, economic risk, currency risk, and management risk. The laws and the enforcement of laws associated with the protection of intellectual property rights can be a major potential economic risk (rather than currency or management risk) in entering new countries.

Reverse innovation occurs when a company develops a product that meets the needs of a developed country and then adapts it to the needs of the developing country.

FALSE
Many leading companies are discovering that developing products specifically for emerging markets can pay off in a big way. In the past, multinational companies typically developed products for their rich home markets and then tried to sell them in developing countries with minor adaptations. However, as growth slows in rich nations and demand grows rapidly in developing countries such as India and China, this approach becomes increasingly inadequate. Instead, companies like GE have committed significant resources to developing products that meet the needs of developing nations, products that deliver adequate functionality at a fraction of the cost. These products have subsequently found considerable success in value segments in wealthy countries as well. Hence, this process is referred to as reverse innovation, a new motivation for international expansion.

The World Bank publishes the Euromoney magazine Country Risk Rating semiannual report. In the text, the January 2013 sampling of these ratings indicates that Norway is the best country in which to invest in terms of its expected level of risk based on the evaluation of its political, economic and structural risks and debt indicators and access to capital.

TRUE
Euromoney magazine publishes a semiannual Country Risk Rating that evaluates political, economic, and other risks that entrants potentially face. Exhibit 7.3 presents a sample of country risk ratings, published by the World Bank, from the 178 countries that Euromoney evaluates. Note that the lower the score, the higher the expected level of risk for new entrants into the market. The overall risk rating score for Norway is 89.97.

Firms can eliminate political instability and adverse government actions risks by: competing in a range of geographic markets, developing stakeholder coalitions, cultivating relationships with key influences, and including key public/private stakeholders in their boards.

FALSE
Firms can lessen political instability and adverse government actions risks by: competing in a range of geographic markets, developing stakeholder coalitions, cultivating relationships with key influences, and including key public/private stakeholders in their boards.

When U.S. currency appreciates against other currencies, U. S. goods can be less expensive to consumers in foreign countries.

FALSE
Even a small change in the exchange rate can result in a significant difference in the cost of production or net profit when doing business overseas. When the U.S. dollar appreciates against other currencies, for example, U.S. goods can be more expensive to consumers in foreign countries.

When the U.S. currency appreciates against other currencies, it becomes more expensive for American companies that have branch operations overseas, when they declare foreign profits in the United States

TRUE
Appreciation of the U.S. dollar can have negative implications for American companies that have branch operations overseas. The reason for this is that profits from abroad must be exchanged for dollars at a more expensive rate of exchange, reducing the amount of profit when measured in dollars.

Differences in foreign markets such as culture, language, and customs can represent significant management risks when firms enter foreign markets.

TRUE
Management risks may be considered the challenges and risks that managers face when they must respond to the inevitable differences that they encounter in foreign markets. These take a variety of forms: culture, customs, language, income levels, customer preferences, distribution systems, and so on.

Offshoring takes place when a firm decides to shift an activity that they were previously performing in a domestic location to a foreign location.

TRUE
Offshoring takes place when a firm decides to shift an activity that they were performing in a domestic location to a foreign location. For example, both Microsoft and Intel now have Research and Development facilities in India, employing a large number of Indian scientists and engineers.

Two opposing pressures that managers face when they compete in foreign markets are cost reduction and adaptation to local markets.

TRUE
There are two opposing forces that firms face when they expand into global markets: cost reduction and adaptation to local markets.

Theodore Levitt, a marketing strategist, argued that people around the world are willing to sacrifice preferences in product features, functions, and design for lower prices and high quality

TRUE
Levitt advocated global product and brand strategies based on three assumptions: customer needs and interests are becoming increasingly homogeneous worldwide; people around the world are willing to sacrifice preferences in features, design, and the like for lower prices at high quality; substantial economies of scale in production and marketing can be achieved through supplying global markets

Among Theodore Levitt's assumptions that would favor a global strategy is that consumers around the world are becoming less price-sensitive.

FALSE
Levitt advocated global product and brand strategies based on three assumptions: customer needs and interests are becoming increasingly homogeneous worldwide; people around the world are willing to sacrifice preferences in features, design, and the like for lower prices at high quality; substantial economies of scale in production and marketing can be achieved through supplying global markets.

Within a worldwide market, the most effective strategies are neither purely multidomestic nor purely global.

TRUE
All firms must balance the need to lower costs (where highly standardized products are preferred) with the need to be responsive to local pressures (where differentiating offerings is required). Most strategies incorporate some elements of both.

Industries 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 (closer to the customer).

TRUE
Typically, primary activities that are downstream (e.g., marketing or service), or closer to the customer, require more decentralization to adapt to local market conditions (a multidomestic strategy). Upstream primary activities (e.g., logistics and operations) tend to be centralized (a global strategy) because there is less need for adapting them to local markets and the firm benefits from economies of scale.

In a global strategy a firm operates all of its businesses under a single common strategy, regardless of location.

TRUE
With a global strategy, competitive strategy is centralized and controlled to a large extent by the corporate office.

A multidomestic strategy is the most appropriate strategy for international operations, because it drives economies of scale as far as possible and provides a middle-of-the-road product that appeals to the largest number of consumers in every market.

FALSE
A firm whose emphasis is on differentiating its product and service offerings to adapt to local markets follows a multidomestic strategy. Decisions evolving from a multidomestic strategy tend to be decentralized to permit the firm to tailor its products and respond rapidly to changes in demand.

The need to attain economies of scale encourages multinational firms to operate under a multidomestic strategy.

FALSE
A firm whose emphasis is on differentiating its product and service offerings to adapt to local markets follows a multidomestic strategy. This typically results in lower ability to leverage economies of scale and higher cost structures.

Corporations with multiple foreign operations that act very independently of one another are following a multidomestic strategy.

TRUE
A firm whose emphasis is on differentiating its product and service offerings to adapt to local markets follows a multidomestic strategy. Decisions evolving from a multidomestic strategy tend to be decentralized to permit the firm to tailor its products and respond rapidly to changes in demand.

., A multidomestic strategy would likely include the use of high volume, centralized production facilities to maximize economies of scale.

FALSE
A firm whose emphasis is on differentiating its product and service offerings to adapt to local markets follows a multidomestic strategy. This typically results in lower ability to leverage economies of scale and higher cost structures.

A limitation of a multidomestic strategy is that it may lead to overadaptation as conditions change.

TRUE
While the multidomestic strategy is based on adaptation to local conditions, the optimal degree of local adaptation evolves over time. Firms must recalibrate the need for local adaptation on an ongoing basis; excessive adaptation extracts a price as surely as under adaptation.

Multinational firms following a transnational strategy strive to optimize the trade-offs associated with efficiency, local adaptation, and learning.

TRUE
A transnational strategy strives to optimize the trade-offs associated with efficiency, local adaptation, and learning. It seeks efficiency not for its own sake, but as a means to achieve global competitiveness. It recognizes the importance of local responsiveness but as a tool for flexibility in international operations.

A key tenet of a transnational strategy is improved adaptation to all competitive situations as well as flexibility by capitalizing on communication and knowledge flows throughout the organization.

TRUE
A central philosophy of the transnational organization is enhanced adaptation to all competitive situations as well as flexibility by capitalizing on communication and knowledge flows throughout the firm. A principal characteristic is the integration of unique contributions of all units into worldwide operations.

., According to studies by Rugman and Verbeke, most of the 500 largest companies in the world are global.

FALSE
Extensive analysis of the distribution data of sales across different countries and regions led Alan Rugman and Alain Verbeke to conclude that there is a strong case to be made that most companies today are regional or biregional, not global.

Trading blocs and free trade zones promote the rise of international expansion.

FALSE
Another reason for regional expansion is the rise of the trading blocs and free trade zones. A number of regional agreements have been created that facilitate the growth of business within these regions by easing trade restrictions, and taxes and tariffs.

A franchise generally expires after a few years, whereas a license is designed to last into perpetuity.

FALSE
Licensing enables a company to receive a royalty or fee in exchange for the right to use its trademark, patent, trade secret, or other valuable items of intellectual property. Franchising contracts generally include a broader range of factors in an operation and have a longer time period during which the agreement is in effect.

Typically, joint ventures involve less control and risk than franchising.

FALSE
A joint venture has a higher degree of ownership (both investment and risk) and control than does franchising.

Typically, the least risky method of entry into a foreign market is through the establishment of a wholly owned foreign subsidiary so that the parent organization can maintain a high level of control.

FALSE
Establishing a wholly owned subsidiary is the most expensive and risky of the various entry modes. However, it can also yield the highest returns. In addition, it provides the multinational company with the greatest degree of control of all activities, including manufacturing, marketing, distribution, and technology development. Wholly owned subsidiaries are most appropriate where a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations.

., Exporting is an expensive way to enter foreign markets.

FALSE
Exporting is a relatively inexpensive way to enter foreign markets, but it is not without significant downsides.

When considering the exporting decision, companies should consider that the ability to tailor their products to meet local market needs typically is very limited.

TRUE
Exporting is a relatively inexpensive way to enter foreign markets, but it is not without significant downsides. The ability to tailor company products to meet local market needs typically is very limited.

When considering the export decision, firms should not partner with local distributors because many foreign markets are nationally regulated.

FALSE
Exporting consists of producing goods in one country to sell in another. The entry strategy enables a firm to invest the least amount of resources in terms of its product, its organization, and its overall corporate strategy. Because many foreign markets are nationally regulated and dominated by networks of local intermediaries, firms need to partner with local distributors to benefit from their valuable expertise and knowledge of their own markets.

PepsiCo successfully captured the Indian market by using a joint venture strategy.

TRUE
What explains Pepsi's success in India? Coke pulled out of the market in 1977 after new government regulations forced it to partner with an Indian company and share its secret formula. In contrast, Pepsi formed a joint venture in 1988 with two Indian companies and introduced products under the Lehar brand. (Lehar Pepsi was introduced in 1990.) With no real international competition, Pepsi became the catch-all for anything that was bottled, fizzy, and from abroad.

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.

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

Multinational firms are constantly faced with the dilemma of choosing between _______ and __________.

A. , local adaptation; global integration

B. , local adaptation; local integration

C. , global adaptation; local integration

D. , global adaptation; global integration

A. , local adaptation; global integration

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.

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

Rivalry is intense in nations with conditions of __________ consumer demand, __________ supplier bases, and __________ new entrant potential from related industries.

A. , weak; weak; high

B. , strong; strong; low

C. , weak; weak; low

D. , strong; strong; high

D. , strong; strong; high

According to Michael Porter, firms that have experienced intense domestic competition are _________________________________.

A. , unlikely to have the time or resources to compete abroad

B. , more likely to demand protection from their governments

C. , most likely to design strategies aimed primarily at the domestic market

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

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

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 workers

B. , large network of public and private educational institutions

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

D. , large, growing market and sophisticated customers

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

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.

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

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 enhancement

B. , Cost reduction

C. , Political risk reduction

D. , Life-cycle enhancement

D. , Life-cycle enhancement

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.

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

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.

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

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 strategy

B. , global strategy: multidomestic strategy

C. , international strategy; multidomestic strategy

D. , international strategy; transnational strategy

A. , global strategy; transnational strategy

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 strategy

B. , global strategy: multidomestic strategy

C. , international strategy; global strategy

D. , transnational strategy; multidomestic strategy

D. , transnational strategy; multidomestic strategy

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 strategy

B. , global strategy

C. , multidomestic strategy

D. , transnational strategy

A. , international strategy

High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy?

A. , global strategy

B. , multidomestic strategy

C. , transnational strategy

D. , overall cost leadership strategy

B. , multidomestic strategy

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 country

B. , firms in industries that are expanding very rapidly

C. , firms in industries that have value added by sales and marketing departments

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

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

, 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 homogenized

B. , consumers around the world increasingly willing to tradeoff idiosyncratic preferences in product features for lower price

C. , flexible manufacturing trends allowing a decline in the minimum volume required to reach acceptable levels of production efficiency

D. , fluctuating exchange rates

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

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 tastes

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

C. , flexibility in applying Research and Development to meet country-specific needs

D. , tailoring products to meet country-specific needs

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

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.

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

Which one of the following is not a limitation of a global strategy?

A. , limited ability to adapt to local markets

B. , the ability to locate activities in optimal locations

C. , the concentration of activities may increase dependence on a single facility

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

B. , the ability to locate activities in optimal locations

., Elements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by __________.

A. , flexibility in adjusting to local laws and customs

B. , decreased duplication of inventories which are often involved in having multiple plants producing similar products

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

D. , economies of scale gained through centralized production of standardized products

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

Which of the following is not a limitation of a multidomestic strategy?

A. , less ability to realize cost savings through scale economies

B. , greater difficulty in transferring knowledge across countries

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

D. , may lead to overadaptation as conditions change

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

High pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy?

A. , global strategy

B. , multidomestic strategy

C. , transnational strategy

D. , differentiation strategy

C. , transnational strategy

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 strategy

B. , transnational strategy

C. , international strategy

D. , multidomestic strategy

B. , transnational strategy

Which of the following is a disadvantage of a transnational strategy?

A. , less ability to realize cost savings through scale economies

B. , limited ability to adapt to local markets

C. , unique managerial challenges in fostering knowledge transfer

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

C. , unique managerial challenges in fostering knowledge transfer

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 location

B. , ensure that all business units follow a strategy strictly tailored to their respective locations

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

D. , attempt to use the strategy that was most successful in their home country

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

Which of the following is a reason for the rise in regional expansion?

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

B. , decrease in the number of trading blocs and free trade zones

C. , increasing national trade restrictions

D. , increasing local taxes and tariffs

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

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.

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

Which of the following describes the most typical order of entry into foreign markets?

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

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

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

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

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

., 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.

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

The difference between a franchise contract and a licensing contract is that ___________.

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

B. , a franchise contract must include a foreign government

C. , a licensing contract covers more aspects of operations

D. , a franchise contract involves less control and less risk

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

__________ entail the creation of a third-party legal entity, whereas __________ do not.

A. , Licensing agreements; joint ventures

B. , Joint ventures; strategic alliances

C. , Strategic alliances; joint ventures

D. , Franchising agreements; strategic alliances

B. , Joint ventures; strategic alliances

A __________ is a business in which a multinational company owns 100 percent of the stock.

A. , joint venture

B. , strategic alliance

C. , wholly owned subsidiary

D. , franchising operation

C. , wholly owned subsidiary

__________ 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 ventures

B. , Strategic alliances

C. , Licensing agreements

D. , Wholly owned subsidiaries

D. , Wholly owned subsidiaries

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.

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