Multiple Choice Flashcards
The price that a firm charges for a good or service is typically less than the value placed on that good or service by the customer. This is because
the customer captures some of that value in the form of consumer surprlus
a strategy that focuses on increasing the attractiveness of a product is referred to as a
differentiation strategy
which of the following is an example of a primary activity in a firm’s value chain
research and development
(blank) activities of the value chain provide inputs that allow the primary activities to occur
support
it has been observed in the aircraft industry that if the output of airframes was double, costs declined 80%
experience curve
learning effects are important during the first three years anything after that is due to
economies of scale
(blank) exists when the tastes and preferences of consumers in different nations are similar if not identical
universal needs
when a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale, the firm should follow a
globalization strategy
(blank) strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences, and where cost pressures are not too intense
localization
a firm that is facing both strong cost pressures and strong pressures for local responsiveness should follow a
transnational strategy
the norms and value systems that are shared among the employees of a company are referred to as
organization culture
which of the following is an argument favoring decentralization
it permits greater flexibility
regardless of a firm’s domestic structure, its international division tends to be organized on
geography
a (blank) is valuable because it can be used as a non bureaucratic conduit for information flows within a multinational enterprise
knowledge network
control through a system of rules and procedures that directs the actions of subunits is
bureaucratic control
other things being equal, the benefit cost risk trade off is likely to be most favorable in
politically stable developed nations with free market systems
early entrants to a market that are able to create switching costs that tie the customer to the product are capitalizing on
first mover advantage
the cost of promoting and establishing a product offering when a firm enters a foreign market price prior too its rivals ar eknown as
pioneering costs
many american firms that sold oil-refining technology to firms in the Gulf now find themselves competing with these firms
firms entering a turnkey project with a foreign enterprise
what is the primary advantage of licensing
helps a firm avoid development costs associated with opening a foreign market
firms engaging in a (blank) benefit from a local partner’s knowledge of the host country
joint venture
the most typical joint venture is
50/50
a firm can establish a wholly owned subsidiary in a country by building a subsidiary from the ground up called the
greenfield strategy
top managers typically overestimate their ability to create value from an acquisition
hubris hypothesis
(blank) refer to cooperative agreements between potential or actual competitors
strategic alliances
which of the following statement is true of EMCs
EMCs are export specialists that act on behalf of their client firms
a (blank) states the bank will pay a specified sum of money to the beneficiary
letter of credit
a banker’s acceptance
is a time draft that has been drawn on and accepted by a bank
logistics is the activity that controls the
transmission of a physical materials through the value chain
the EU requires that the quality of the firm’s manufacturing processes and products be certified under a quality standard known an
ISO 9000
which of the following statements is true of six sigma
it is a statistically based philosophy to reduce defects and boost productivitiy
which of the following is a factor that transforms a low-cost location to a high-cost location
appreciation of local currency
flexible manufacturing technology is also known as
lean production
which of the following products will most likely have high value-to-weight ratios
pharmaceuticals
when a company’s product has a low value-to-weight ratio, the company should
produce the product in multiple locations close to major markets
the idea that valuable knowledge does not reside just in a firm’s domestic operations but can also be found in nits foreign subsidiaries is called
global learning
just-in-time inventory systems
economize on inventory
a (blank) retail system is one in which there are many retailers
fragmented
if a producer sells through an import agent, wholesaler, and a retailer then
a long channel exists
(blank) refers to the expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international businesses
channel quality
the profitability of effective communication is reduced by
noise
in order for price discrimination to be successful
national markets must be kept separate
(blank) occurs when an a business capitalizes on a price differential for a firm’s product between two countries
arbitrage
(blank) pricing is the use of price as a competitive weapon to dive a weaker competitor out of a national market
predatory
(blank) refers to the fact a firm’s pricing strategy in one market may have an impact on its’ rivals pricing
multipoint pricing
(blank) occurs when a firm sells a product for a price that is less than the cost of producing it
dumping
a push strategy is appropriate when
the firm is selling complex new products
an ethnocentric staffing policy is one in which
all key management positions are filled by parent country nationals
if a company recruits host country nationals to manage subsidiaries while parent country nationals occupy headquarters follows
polycentric staffing policy
a (blank) seeks the best people for key jobs throughout the organization, regardless of nationality
geocentric staffing policy
which of the following is the most common approach to expatriate pay
balance sheet approach
which of the following is true regarding approached to labor relations
many firms are now using the threat to move production to another country in their negotiations with unions
the technical process by which an independent person gathers evidence for determining if financial accounts conform to required accounting standards is known as
an audit
transfer price refers to the
price at which goods and services are transferred to a subisidiary
transnational financing occurs when a firm based in one country enters another country enters another country to raise capital
from the sale of stocks or bonds
