MGMT 466 Exam 3 - FLASHCARDS - Chapter 8

Question 1

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

Answer 1

International strategy

Question 2

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?

Answer 2

International diversification strategy

Question 3

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?

Answer 3

true

Question 4

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?

Answer 4

the selection of new countries to enter

Question 5

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

Answer 5

Liability of foreigness?

Question 6

What are the costs associated with liability of foreigness?

Answer 6

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

Question 7

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

Answer 7

1. Cultural
2. Administrative and political
3. Geographic
4. Economic

Question 8

What is the cultural distance associated with liability of foreigness?

Answer 8

religion, social norms, language

Question 9

What is the political distance associated with liability of foreigness?

Answer 9

laws, policies, treaties

Question 10

What is the geographic distance associated with liability of foreigness?

Answer 10

size, transportation, communication, cost of these

Question 11

What is the economic distance associated with liability of foreigness?

Answer 11

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

Question 12

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

Answer 12

– Multidomestic
– Global
– Transnational

Question 13

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

Answer 13

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

Question 14

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

Answer 14

1. The need for global integration
2. The need for local responsiveness

Question 15

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

Answer 15

Multi domestic strategy

Question 16

What strategy tailors products to the local market?

Answer 16

Multi domestic strategy

Question 17

What strategy focuses on competition within each country?

Answer 17

Multi domestic strategy

Question 18

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

Answer 18

true

Question 19

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

Answer 19

Global strategy

Question 20

True or false: global strategies develop economies of scale?

Answer 20

true

Question 21

What strategy assumes customers throughout the world have similar needs?

Answer 21

Global strategy

Question 22

What strategy has standardization of products across country boundaries?

Answer 22

Global strategy

Question 23

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

Answer 23

Global strategy

Question 24

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

Answer 24

true

Question 25

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

Answer 25

Transnational strategy

Question 26

What integrates characteristics of both multidomestic and global strategies?

Answer 26

Transnational strategy

Question 27

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

Answer 27

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

Question 28

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

Answer 28

true

Question 29

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

Answer 29

Yes

Question 30

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

Answer 30

1. Increased competition. Pressure on cost reduction 2. Pressure to differentiate

Question 31

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

Answer 31

true

Question 32

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

Answer 32

true

Question 33

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

Answer 33

true

Question 34

What are the five ways firms can enter international markets?

Answer 34

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

Question 35

What mode of entry is high cost but low control?

Answer 35

Exporting

Question 36

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

Answer 36

Acquisitions

Question 37

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

Answer 37

Licensing or franchising

Question 38

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

Answer 38

Strategic alliances

Question 39

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

Answer 39

New wholly owned subsidaries

Question 40

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

Answer 40

true

Question 41

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?

Answer 41

true

Question 42

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

Answer 42

true

Question 43

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

Answer 43

Yes

Question 44

How can firms mitigate anticipated risks?

Answer 44

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

Question 45

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

Answer 45

true

Question 46

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

Answer 46

true

Question 47

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

Answer 47

Yes

Question 48

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?

Answer 48

true

Question 49

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

Answer 49

Yes

Question 50

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

Answer 50

To upgrade it continually through innovation

Question 51

Why does international diversification facilitate innovation in a firm?

Answer 51

− 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.