CHAPTER 6 T OR F

Question 1

• International business consists of business transactions between parties from one Country

Answer 1

FALSE (MORE THAN ONE COUNTRY)

Question 2

• Buying materials in one country and shipping them to another for assembly or processing

Answer 2

TRUE

Question 3

• Building a plant in foreign country to capitalize on lower labor cost

Answer 3

TRUE

Question 4

companies decide to enter foreign markets to gain access to new and old customers

Answer 4

FALSE (NEW CUSTOMERS)

Question 5

companies decide to enter foreign markets to spread business risk across a wider market base

Answer 5

TRUE

Question 6

companies decide to enter local markets to gain access to resources and capabilities located in local markets

Answer 6

FALSE (companies decide to enter FOREIGN markets to gain access to resources and capabilities located in FOREIGN markets

Question 7

companies decide to enter foreign markets to further exploit core competencies

Answer 7

TRUE

Question 8

companies decide to enter foreign markets to achieve lower costs through economies of scale, experience and increased purchasing power

Answer 8

TRUE

Question 9

one of the reasons for strategically locating value chain activities is lower wage rate

Answer 9

TRUE

Question 10

one of the reasons for strategically locating value chain activities is lower worker productivity

Answer 10

FALSE (HIGHER)

Question 11

one of the reasons for strategically locating value chain activities is Lower energy costs

Answer 11

TRUE

Question 12

one of the reasons for strategically locating value chain activities is more environmental regulations

Answer 12

FALSE (FEWER environmental regulations)

Question 13

one of the reasons for strategically locating value chain activities is lower tax rates

Answer 13

TRUE

Question 14

one of the reasons for strategically locating value chain activities is minimize inflation rates

Answer 14

FALSE ( LOWER inflation rates)

Question 15

one of the reasons for strategically locating value chain activities is proximity to retailers and technologically related industries

Answer 15

FALSE (proximity to SUPPLIERS and technologically related industries)

Question 16

one of the reasons for strategically locating value chain activities is proximity to customers

Answer 16

TRUE

Question 17

one of the reasons for strategically locating value chain activities is lower distribution costs

Answer 17

TRUE

Question 18

one of the reasons for strategically locating value chain activities is available natural resources

Answer 18

TRUE

Question 19

Strategic Option for Entering and Competing in International Markets is maintain a national (two-country) production base and export goods to foreign markets

Answer 19

FALSE (ONE-COUNTRY)

Question 20

license foreign firms to produce and distribute the firm’s product abroad is Strategic Option for Entering and Competing in International Markets

Answer 20

TRUE

Question 21

Strategic Option for Entering and Competing in International Markets is employ an overseas business strategy

Answer 21

FALSE (FRANCHISING STRATEGY)

Question 22

Strategic Option for Entering and Competing in International Markets is establish a wholly- owned subsidiary by a ”greenfield” venture.

Answer 22

TRUE

Question 23

rely on strategic alliances or joint venture with foreign companies is Strategic Option for Entering and Competing in International Markets

Answer 23

TRUE

Question 24

Greenfield strategy involves starting a new operation from scratch. The firm buy or lease land, constructs new facilities, hires and transfers in managers and employees, and then launches the new operations.

Answer 24

TRUE

Question 25

Firm can select best site which meets it needs and construct modern and up-to-date facilities is one of the advantage of greenfield strategy

Answer 25

TRUE

Question 26

- Local communities often offer economic development incentives to attract such facilities is one of the advantage of greenfield strategy

Answer 26

TRUE

Question 27

- Managers don’t need to deal with existing debts and out moded equipment is one of the disadvantage of greenfield strategy

Answer 27

FALSE ( ADVANTAGE)

Question 28

- Start from scratch always takes time and patience is one of the advantage of greenfield strategy

Answer 28

FALSE (DISADVANTAGE)

Question 29

- Land in the desired location may be expensive is one of the advantage of greenfield strategy is one of the disadvantage of greenfield strategy

Answer 29

TRUE

Question 30

- To building factory or manufacturing house, firm has to deal with local regulations is one of the disadvantage of greenfield strategy

Answer 30

TRUE

Question 31

- Firm has to recruit local managers and workforce and train them is one of the advantage of greenfield strategy

Answer 31

FALSE (DISADVANTAGE)

Question 32

Joint Venture is a union or association formed for mutual benefit, especially between countries or organizations

Answer 32

FALSE (ALLIANCE)

Question 33

Joint Venture is a commercial enterprise undertaken jointly by two or more parties which otherwise retain their distinct identities.

Answer 33

TRUE

Question 34

* Gaining partner’s knowledge of local market conditions is benefits of alliance and joint ventures

Answer 34

TRUE

Question 35

* Achieving economies of scale through joint operations is benefits of alliance and joint ventures

Answer 35

TRUE

Question 36

* Gaining technical expertise and foreign market knowledge is benefits of alliance and joint ventures

Answer 36

FALSE (LOCAL MARKET)

Question 37

* Sharing distribution facilities and dealer networks, and mutually strengthening each partner’s access to buyers is benefits of alliance and joint ventures

Answer 37

TRUE

Question 38

* Indirecting competitive energies more toward mutual rivals and less toward one another is benefits of alliance and joint ventures

Answer 38

FALSE(DIRECTING)

Question 39

Establishing working relationships with key officials in the host-country government is benefits of alliance and joint ventures

Answer 39

TRUE

Question 40

* Outdated knowledge and expertise of local partners is risk of alliance and joint ventures

Answer 40

TRUE

Question 41

* Cultural and language barriers is risk of alliance and joint ventures

Answer 41

TRUE

Question 42

* Costs of establishing the working arrangement is benefits of alliance and joint ventures

Answer 42

FALSE (RISK)

Question 43

* Conflicting objectives and strategies and/or deep differences of opinion about joint control is risk of alliance and joint ventures

Answer 43

TRUE

Question 44

* Differences in corporate values and ethical standards is benefits of alliance and joint ventures

Answer 44

FALSE (RISK)

Question 45

* Loss of legal protection of proprietary technology or competitive advantage is risk of alliance and joint ventures

Answer 45

TRUE

Question 46

* Over dependence on foreign partners for essential expertise and competitive advantage is risk of alliance and joint ventures

Answer 46

TRUE

Question 47

- Multidomestic strategy is multi-domestic corporations vies itself as a collection of relatively independent operating subsidiaries, each of which focuses on a specific domestic market.

Answer 47

TRUE

Question 48

- Transnational strategy as defined in business terms is an organization's strategic guide to globalization. Such a connected world, allows a business's revenue to not be confined by borders

Answer 48

FALSE (GLOBAL STRATEGY)

Question 49

- International business strategy refers to plans that guide commercial transactions taking place between entities in different countries.

Answer 49

TRUE

Question 50

- Build Competitive Advantage in Local Markets

Answer 50

FALSE (INTERNATIONAL)

Question 51

- Use international location to lower Cost or differentiate products

Answer 51

TRUE

Question 52

- Gain cross- border coordination benefits

Answer 52

TRUE

Question 53

- Share resources and capabilities

Answer 53

TRUE

Question 54

- To customize offerings in each country market to match the tastes and preferences of international buyers

Answer 54

FALSE (LOCAL BUYERS)

Question 55

- To pursue a strategy of offering a mostly standardized product world wide

Answer 55

TRUE

Question 56

Build a Resource-based competitive Advantage by:- Using powerful brand names to extend a differentiation-base competitive advantage beyond the home market

Answer 56

TRUE

Question 57

Build a Resource-based competitive Advantage by:- Coordinating activities for sharing and transferring resources and production capabilities across different countries’ domain to develop market dominating depth in key competencies

Answer 57

TRUE

Question 58

- Prepare to compete in the basis of high price

Answer 58

FALSE (LOW PRICE)

Question 59

- Prepare to modify the firm’s business model or strategy to accommodate local circumstances

Answer 59

TRUE

Question 60

- Try to Change the local market to better match the way the firm does business elsewhere

Answer 60

TRUE

Question 61

- Do not avoid developing markets where it is too difficult or costly to accommodate local circumstances

Answer 61

FALSE (AVOID)

Question 62

- Develop a business model that exploits shortcomings in local distribution networks or infrastructure

Answer 62

TRUE

Question 63

- Utilize knowledge of local customer needs and preferences to create customized products & services

Answer 63

TRUE

Question 64

- Take advantage of aspects of the local workforce with which large multinational firms may be unfamiliar

Answer 64

TRUE

Question 65

- Use local acquisition and rapid-growth strategies to defend against expansion-minded international

Answer 65

TRUE

Question 66

- Transfer the firm’s expertise to cross-border markets

Answer 66

TRUE