Chapter 13 - The strategy of an international Business

Question 1

What is a Strategy

Answer 1

the actions that managers take to attain the goals of the firm.

Goal is to maximize shareholder value

Question 2

International expansion may enable a firm to…

Answer 2

earn greater returns by transferring the product offerings derived from its core competencies to markets where indigenous competitors lack those product offerings and competencies.

Question 3

focusing on the attainment of location economies is

Answer 3

that it may pay a firm to base each value-creation activity it performs at that location where factor conditions are most conducive to the performance of that activity.

Question 4

By rapidly building sales volume for a standardized product..

Answer 4

International expansion can assist a firm in moving down the experience curve by realizing learning effects and economies of scale.

Question 5

A multinational firm can create additional value by

Answer 5

identifying valuable skills created within its foreign subsidiaries and leveraging those skills within its global network of operations.

These leverage issues are part of the firm’s global value chains.

Question 6

In international business there are two dimensions:

Answer 6

Pressures for cost reduction and pressures for local responsiveness.

Question 7

The cost reduction pressures rise due to the need to

Answer 7

• Seek cost reduction through scale economies
• Capitalize on converging consumer trends and universal need.
• Provide uniform service to global consumers.
• Conduct global sourcing of raw materials, components, energy and labor.
• Monitor and respond to global competitors.
• Take advantage of media that reaches buyers in multiple markets.

Question 8

The pressure to customize the product to local conditions are due to:

Answer 8

• Concessions may need to be made to local conditions
• Requires cost/benefit analysis and opportunity assessment.

Question 9

There are four international strategies, name them

Answer 9

International strategy:
Localization Strategy:
Globalization standardization strategy
Transnational strategy

-LEARN THIS GRID BY HEART

Question 10

Firms may need to shift from international strategy to …. or ….. in advance of competitors.

Answer 10

global standardization or transnational

Question 11

localization strategy may face competitors and must shift to

Answer 11

atransnational strategy