ch.7 - competing in international markets

Question 1

• Access to new customers
• Lowering costs
• Diversification of business risk

Answer 1

Reasons to compete in new markets

Question 2

The potential for government upheaval or interference with business to harm an operation within a country.

• nationalization: company’s assets in a country are seized by the national government

Answer 2

Political Risk

Question 3

The potential for a country’s economic conditions and policies, property rights protections, and currency exchange rates to harm a company’s operations within a country.

Answer 3

Economic Risk

Question 4

The potential for a company’s operations in a country to struggle due to **differences in language, customs, norms, and customer preferences. **

Answer 4

Cultural Risk

Question 5

1. Strategy, structure, and rivalry
2. Factor Conditions
3. Demand Conditions
4. Related and Supporting Industries

Answer 5

The Diamond Model

Question 6

How challenging it is for companies to survive domestic competition

Answer 6

Company strategy, structure, and rivalry

Question 7

The nature of raw material and other inputs that companies need in order to create goods and services.

• just in-time inventory management: a production system that conserves space and lower costs by requiring inputs to arrive at the moment they are needed.

Answer 7

Factor conditions

Question 8

The nature of domestic customers, especially whether or no they have high expectations of the goods and services that they buy.

Answer 8

Demand conditions

Question 9

The extent to which companies’ domestic suppliers and other complementary industries **are developed and helpful. **

Answer 9

Related and supporting industries

Question 10

How challenging it is for companies to survive domestic competition.

Answer 10

Company stratergy, structure, and rivalry

Question 11

a company that has operations in more than one country

Answer 11

Multinational Corporation (MC)

Question 12

strategy that sacrifices efficiency in favor of emphasizing responsiveness to local requirements within each of its markets.

part of the multinational corporation

Answer 12

Multidomestic strategy

Question 13

strategy that sacrifices responsiveness to local requirements within each of its markets in favor of emphasizing efficiency.

part of the multinational corporation

Answer 13

Global Strategy

Question 14

strategy that seeks a middle ground between a multidomestic strategy and a global strategy

Answer 14

Transnational strategy

Question 15

Creating goods within a company’s home country and then shipping them to another country.

Answer 15

Exporting

Question 16

a business operation in a foreign country that a company fully owns.

Answer 16

Wholly owned subsidiary

Question 17

used by many companies who compete in service industries to develop a worldwide presence.

Answer 17

Franchising

Question 18

most frequently used in manufacturing industries.

• granting a foreign company the right to create a company’s product within a foreign country in exchange for a fee.

Answer 18

Licensing