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MGMT 466 > MGMT 466 Exam 3 - FLASHCARDS - Chapter 8 > Flashcards

MGMT 466 Exam 3 - FLASHCARDS - Chapter 8

1
Q

What is a strategy through which the firm sells its goods or services outside its domestic market?

A

International strategy

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2
Q

What is a strategy through which a firm expands the production and/or sales of its goods and/or services across the borders of global regions and countries into a potentially large number of geographic locations or markets?

A

International diversification strategy

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3
Q

True or false: the resources a firm possesses provide limits to a firm’s international diversification and provide a basis for achieving competitive advantage in the countries in which the firm expands?

A

true

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4
Q

What is the next important decision once a firm has decided to pursue an international diversification strategy or increase the geographic diversity of its current strategy through entering new countries?

A

the selection of new countries to enter

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5
Q

What is a set of costs associated with various issues firms face when entering foreign markets?

A

Liability of foreigness?

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6
Q

What are the costs associated with liability of foreigness?

A

• Unfamiliar operating environments
• Economic, administrative, and cultural differences
• The challenges of coordination over distances

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7
Q

What are the four types of distances associated with liability of foreignness (CAGE framework)?

A
  1. Cultural
  2. Administrative and political
  3. Geographic
  4. Economic
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8
Q

What is the cultural distance associated with liability of foreigness?

A

religion, social norms, language

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9
Q

What is the political distance associated with liability of foreigness?

A

laws, policies, treaties

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10
Q

What is the geographic distance associated with liability of foreigness?

A

size, transportation, communication, cost of these

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11
Q

What is the economic distance associated with liability of foreigness?

A

disposable income, information, knowledge etc. Impacts level of adaptation

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12
Q

What type of international strategies are considered at the corporate level?

A

– Multidomestic
– Global
– Transnational

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13
Q

What type of generic strategies are considered at the business level?

A

• Cost leadership
• Differentiation
• Focused cost leadership
• Focused differentiation
• Integrated cost leadership/differentiation

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14
Q

What two demensions do the corporate international strategies vary based on?

A
  1. The need for global integration
  2. The need for local responsiveness
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15
Q

What is a strategy where strategic and operating decisions are decentralized?

A

Multi domestic strategy

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16
Q

What strategy tailors products to the local market?

A

Multi domestic strategy

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17
Q

What strategy focuses on competition within each country?

A

Multi domestic strategy

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18
Q

True or false: in a multi domestic strategy, the differences between the markets is significant?

A

true

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19
Q

What strategy is where a firm’s home office determines the strategies that business units are to use in each country or region?

A

Global strategy

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20
Q

True or false: global strategies develop economies of scale?

A

true

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21
Q

What strategy assumes customers throughout the world have similar needs?

A

Global strategy

22
Q

What strategy has standardization of products across country boundaries?

A

Global strategy

23
Q

What strategy has innovations developed at the corporate level, or in one market, and apply them to other markets?

A

Global strategy

24
Q

True or false: a global strategy requires efficient operations—resource-sharing, greater coordination, and cooperation?

A

true

25
Q

What is an international strategy through which the firm seeks to achieve both global efficiency and local responsiveness?

A

Transnational strategy

26
Q

What integrates characteristics of both multidomestic and global strategies?

A

Transnational strategy

27
Q

What does a transnational strategy require in order to be implemented?

A

Requires “flexible coordination”—building a shared vision and individual commitment through an integrated network—in order to be implemented

28
Q

True or false: a transnational strategy Is difficult to use because of its conflicting goals?

A

true

29
Q

Can a transnational strategy produce higher performance than multidomestic or global strategies if implemented effectively?

A

Yes

30
Q

Why is it becoming increasingly necessary to successfully compete in international markets?

A
  1. Increased competition. Pressure on cost reduction
  2. Pressure to differentiate
31
Q

True or false: global efficiencies are a source of competitive advantage?

A

true

32
Q

True or false: multinational flexibility is a source of competitive advantage?

A

true

33
Q

True or false: worldwide learning is a source of competitive advantage?

A

true

34
Q

What are the five ways firms can enter international markets?

A
  1. Exporting
  2. Licensing
  3. Strategic alliances
  4. Acquisitions
  5. New wholly owned subsidiaries
35
Q

What mode of entry is high cost but low control?

A

Exporting

36
Q

What mode of entry has quick access to new markets, high costs, complex negotiations, and problems of merging with domestic operations?

A

Acquisitions

37
Q

What mode of entry has low risk, low cost, little control, and low returns?

A

Licensing or franchising

38
Q

What mode of entry has shared costs, shared resources, shared risks, and shared problems of integration?

A

Strategic alliances

39
Q

What mode of entry is complex, costly, time consuming, high risk, and has maximum control?

A

New wholly owned subsidaries

40
Q

True or false: A firm’s success in carrying out an international strategy depends on its success in identifying the best countries to enter?

A

true

41
Q

True or false: A firm’s success in carrying out an international strategy depends on selection and implementation of appropriate corporate-level and business-level international strategies?

A

true

42
Q

True or false: A firm’s success in carrying out an international strategy depends on optimal selection of a mode (or modes) of entry?

A

true

43
Q

Are many factors that are not under a firm’s direct control, have a dramatic effect on the success of an international strategy?

A

Yes

44
Q

How do can firms mitigate anticipated risks?

A

Through careful analysis of the business, political, and cultural environments

45
Q

True or false: firms should do what they can to mitigate anticipated risks through careful analysis of the business, political, and cultural environments?

A

true

46
Q

True or false: International diversification should be related positively to a firm’s performance as measured by the returns it earns on its investments?

A

true

47
Q

Do some multinational firms enjoy high performance from international diversification and some experience low performance?

A

Yes

48
Q

True or false: Firms need to be careful in making decisions about where to expand and how to manage an internationally diversified portfolio of businesses?

A

true

49
Q

Does it become increasingly difficult to effectively implement, manage, and control a firm’s international operations when there are increases in geographic diversity?

A

Yes

50
Q

What is the only way for individual nations and individual firms to sustain a competitive advantage?

A

To upgrade it continually through innovation

51
Q

Why does international diversification facilitate innovation in a firm?

A

− Provides a larger market to gain greater and faster returns from investments in innovation.
− Exposes the firm to new products and processes.
− This enables the firm to integrate this knowledge into its operations, allowing further innovation to be developed.
− Can generate the resources necessary to sustain large-scale R&D.

MGMT 466 (8 decks)

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