2nd partial

Question 1

Examples of value creation

Answer 1

cost leadership
Differentiation
Focus

Question 2

Company sets out to be the low cost producer of the industry
Economies of scale

Answer 2

Cost leadership

Question 3

Company seeks to be unique in its industry along some dimensions that are widely valued by others

• product
• distribution
• sales
• mkt
• service
• img

Answer 3

Differentiation

Question 4

Company sets out to be the best in a segment(s)

• can involve cost focus & differentiation focus
• segment needs to be profitable enough

Answer 4

Focus

Question 5

Move to a new country while keeping your central corporate headquarters in your home country

Answer 5

1ST international strategy

Question 6

Characteristics of international strategy

Answer 6

- extends point of sale / production
G best practices
X risk high and low flexibility
X centralized decisions
- simplest, copy/paste

Question 7

Offices in different places but implement same strategy

• high std
• cheaper but + complex

Answer 7

Global strategy

Question 8

Offices/int. locations have power to change strategy

• more costly
• high adaptation

Answer 8

Multinational / domestic

Question 9

Most complex strategy

- high std + high adaptation

Answer 9

Transnational

Question 10

Factors that affect strategy

Answer 10

Economic
Political
Legal
Cultural
Financial

Question 11

Managers look for opportunities with the greatest RETURN and minimum RISK

Answer 11

Economic factor

Question 12

Measurement of people lacking a minimum std of living

Answer 12

Poverty

Question 13

World Bank measurement of poverty

Answer 13

Extreme poverty (less than 1.25 p/day)
Moderate poverty (less than 2 p/day)
Base of the pyramid (less than 4)

Question 14

Rate of out of work citizens looking for a job measured against total civilian workforce

Answer 14

Unemployment

Question 15

Government financial obligations

Answer 15

Debt

Question 16

Proportion of population that earns different levels of income

Answer 16

Income distribution

Question 17

Statistical measure of distribution used as a gauge of economic inequality, measuring income distribution among a population.
0 (perfect equality)
1 (perfect inequality)

Answer 17

Gini coefficient

Question 18

Records all commercial transactions in a country

- commercial balance (exports vs imports)

Answer 18

Balance of payments

Question 19

Total output value of everything produced within a country’s boundaries

Answer 19

Gross Domestic Product (GDP)

GDP / citizens

Question 20

Political risk

Answer 20

(-) Systemic
Procedural
Distributive
(+) Catastrophic

Question 21

Affects all industries in a small way

Answer 21

Systemic

Question 22

Affects some industries in a big way

Answer 22

Procedural

Question 23

Affects all industries in a big way

Answer 23

Distributive

Question 24

Worst case scenario (wars, natural disasters, recession)

Answer 24

Catastrophic

Question 25

Institute rules that support business formation, regulate transactions, and stabilize relationships.

Answer 25

Legal system in business

Question 26

Historically based on tradition precedent judge

Answer 26

common law

Question 27

facts, evidence based on law political official

Answer 27

civil law

Question 28

based on religious teachings | max authority = religious leader

Answer 28

theocratic law

Question 29

more communities community leader is the authority based on norms of behavior

Answer 29

customary law

Question 30

The ruler commands authority that is above the law. | Anchors totalitarian states

Answer 30

rule of man

Question 31

No individual is above laws that are clearly specifies, commonly understood, and fairly enforced. Present in democracy.

Answer 31

rule of law

Question 32

Legal Issues in IB

Answer 32

``` Starting a business Making and Enforcing contracts Hiring and firing Declaring bankruptcy or closing a business Paying taxes and loans Cross-border transactions management ```

Question 33

Doingbusiness.org

Answer 33

Ease of doing business

Question 34

Legal comprehension in a country includes:

Answer 34

- Easiness of opening a new business - Avoiding problems - Understanding how decisions are made in a new country