Ch10 Global Strategy Competing Around The Verified Test Bank

Student name:__________

Most businesses around the world are more than 50 percent globalized, meaning that more than half of their revenues are from outside the home country.
1. ______

true
false

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > TF Qu. 01 Most businesses around the world are more th...

In recent years as economic forces have changed, many governments and multinational enterprises have been more interested in negotiating bilateral trade agreements between countries rather than multinational agreements through international agencies.
1. ______

true
false

Businesses located in countries that have relatively weak domestic demand often make the leap to multinational enterprises in order to achieve growth or to gain and sustain economic advantage.
1. ______

true
false

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > TF Qu. 03 Businesses located in countries that have re...

Communities of learning are metropolitan areas that have large numbers of high school graduates who are ready for a university education.
1. ______

true
false

Administrative and political distances, such as the presence or absence of colonial ties, are part of the cost-responsiveness framework.
1. ______

true
false

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > TF Qu. 05 Administrative and political distances...

The cultural distance between Australia and the United States is relatively high because of the physical distance between the two nations.
1. ______

true
false

Foreign-entry modes such as acquisitions and greenfield projects are usually disadvantageous because they require a high level of capital and resource investment but allow for a low level of control.
1. ______

true
false

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > TF Qu. 07 Foreign-entry modes such as acquisitions and...

Delos Inc. sells the same sparkplugs in more than 30 locations throughout Brazil. Delos is an example of a firm that helps to support the globalization hypothesis.
1. ______

true
false

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 3 Hard
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > TF Qu. 08 Delos Inc. sells the same sparkplugs in more...

When multinational enterprises (MNEs) enter host countries such as Saudi Arabia and Japan, the most logical option is usually to pursue a multidomestic strategy even though that strategy rarely leads to significant cost reductions.
1. ______

true
false

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 2 Medium
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > TF Qu. 09 When multinational enterprises (MNEs) enter host co...

The term demand conditions refers to how high the volume of demand is for a particular product in a particular country.
1. ______

true
false

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > TF Qu. 10 The term demand conditions refers to how hig...

One of the major benefits gained by a firm entering the international market is the ability to benefit from locating value chain activities in optimal geographies for a specific activity.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > TF Qu. 11 One of the major benefits gained by a firm e...

Porter’s diamond framework helps explain why some MNEs are able to promote a lower cost structure for their specific industry.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Porter's Diamond Framework
Source : Chapter 10 Test Bank > TF Qu. 12 Porter’s diamond framework helps explain...

Raul is the chief operating officer (COO) of Black Mesa Inc., a firm that produces handcrafted kitchen tables for both the residential and commercial markets. Raul believes that his domestic market is saturated and now wishes to go global. Which of the following would serve as an advantage for Raul if he chose to pursue international markets?
1. ______

Raul could gain access to cheaper raw materials in a foreign country, thus lowering the cost of his input factors.

Raul could share his intellectual properties with another firm that operates in a foreign country in hopes of achieving collaboration.

Raul’s brand might suffer a loss in reputation if he goes global but could increase his market share.

Raul may benefit from learning about Hofstede’s cultural dimensions that could be leveraged on his current employees in his domestic market.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 13 Raul is the chief operating officer (COO)...

Dolores is the CEO of Quantum Electronics LLC and wishes to develop additional competencies for her business. She is mostly interested in taking advantage of the________, which are clustered firms that have unique skill sets located in specific geographic regions.
1. ______

CAGE distance framework

communities of learning

advantages of foreignness

transnational strategies

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 14 Dolores is the CEO of Quantum Electronics...

Firms that consider international expansion will often examine absolute metrics on which countries to pursue investments in but also consider relative distance. To help firms decide where to compete,________ was developed to help firms make this decision.
1. ______

the MNE decision-making model

the polycentric strategic framework

the CAGE distance framework

Porter’s diamond framework

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 15 Firms that consider international expansion ...

Maria wants to pursue an international strategy but is concerned that foreign markets aren’t ready for her products and services. You recommend that she engage in________, which would be contract based and would limit risk and exposure of her investments.
1. ______

exporting

licensing

equity alliance

greenfield operations

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 16 Maria wants to pursue an international strat...

Hadiza wishes to have more control with her international strategy and is willing to increase her firms’ investments in this foreign market. She considers creating a subsidiary but also wishes to build a manufacturing plant from the ground up. Hadiza is most likely interested in pursuing a(n)________ strategy.
1. ______

red ocean

greenfield operations

exporting and importing

black swan

Walmart sells live animals (snakes, eels, toads, etc.) for food preparation in China, whereas IKEA sells kimchi refrigerators and metal chopsticks in South Korea. These examples illustrate the need for________, which often requires the competing firm to tailor their products and services to meet the needs of the market in which they are competing.
1. ______

cost-leadership

international strategy

local responsiveness

globalization hypothesis

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Integration-Responsiveness Framework
Source : Chapter 10 Test Bank > MC Qu. 18 Walmart sells live animals (snakes, eels, to...

Vinny, the CEO of Rainholm Industries, is looking to employ a________ strategy, which would take advantage of economies of scale and location economies. He wishes to pursue and establish a global division of labor based on wherever best-of-class capabilities reside at the lowest possible cost for Rainholm Industries.
1. ______

global-standardization

multidomestic

international

transnational

Macmillan Toys Inc. is looking to expand internationally and wishes to develop a new product line that is highly localized while keeping their cost structure below that of their rivals. Macmillan Toys Inc. has been successful with implementing a blue ocean strategy in their main strategic business units and as such wishes to pursue a________ strategy for their international operations.
1. ______

transnational

international

global-standardization

multidomestic

Fruits de Mer Company, a seafood cannery, has established itself as a strong differentiator in its respective strategic business units but now wishes to explore international strategies. It is prepared to fully customize its product offerings to meet the needs of the foreign country that it is entering; having conducted many surveys on local preferences, tastes, and requirements, the Fruits de Mer Company will more than likely pursue a________ strategy.
1. ______

global-standardization

cost-leadership

transnational

multidomestic

Michael Porter developed the diamond framework to explain why some nations outperform others in specific industries. This is referred to as
1. ______

national competitive advantage.

death-of-distance hypothesis.

local responsiveness.

international competitive advantage.

Thomás works in a rare metals industry and wants to open a business in a foreign country that is rich with natural resources. He believes that natural resources are the one and only mechanism that can help him achieve an international competitive advantage. After all, countries like Afghanistan, Iran, and Venezuela are home to the world’s richest natural recourses, so in theory they too should be able to leverage those resources in order to create a national competitive advantage. Which of the statements below best represents an appropriate response to Thomás and his theory?
1. ______

Natural resources almost always help countries achieve a national competitive advantage.

Natural resources are often not needed to generate world-leading companies because competitive advantage is often based on other factor endowments such as human capital and know-how.

Natural resources can help create world-leading companies but only if they pursue a differentiation strategy.

Having access to natural resources never helps firms achieve a national competitive advantage.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Porter's Diamond Framework
Source : Chapter 10 Test Bank > MC Qu. 23 Thomás works in a rare metals industry ...

When Amal, the CEO of Explore Complexity Simulation Systems, expanded her operations to a different international market, she was surprised to see how little competition she faced. In her home country, the competition for simulation systems is incredibly fierce. As a result of her international expansion, Explore Complexity has been able to easily position themselves as a major player. Which of the four categories of Porter’s diamond framework best explains this advantage?
1. ______

factor conditions

competitive intensity in the focal industry

demand conditions

related and supporting industries/complementors

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Porter's Diamond Framework
Source : Chapter 10 Test Bank > MC Qu. 24 When Amal, the CEO of Explore Complexity...

Teresa wants to take her firm internationally but is concerned with the________, which refers to the possibility of higher costs of doing business in an unfamiliar cultural and economic environment.
1. ______

geopolitical climate

foreign direct investment

liability of foreignness

transactional strategy

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 25 Teresa wants to take her firm internationall...

When a firm is facing high pressure for local responsiveness and low pressure for cost reductions, the firm is likely to adopt a(n)________ strategy, according to the cost-responsiveness framework.
1. ______

transnational

global-standardization

multidomestic

international

When firms sell their products overseas with little or no change to the products, they may increase the expropriation of intellectual property and increase the risk of piracy. This is considered a serious disadvantage when pursuing a(n)________ strategy.
1. ______

international

differentiation

cost-leadership

functional-level

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 27 When firms sell their products overseas with...

Because keeping cost low is critical to IKEA’s value innovation, it switched from a(n)
1. ______

transnational strategy to a multidomestic strategy.

transnational strategy to a global-standardization strategy.

international strategy to a multidomestic strategy.

international strategy to a global-standardization strategy.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 28 Because keeping cost low is critical to IKEA...

Mikhail is a strategist for a power tool manufacturer that has a large presence in the United States and Germany. By checking economic and political reports, he knows that trade and investment barriers are falling among wealthy nations. He also knows that the price of oil has dropped 50 percent in the previous two years. Based on this information, what action should Mikhail and his company take?
1. ______

Mikhail and his employer should wait out this period of uncertainty and act when market forces are more stable.

They should anticipate market corrections because investment barriers and the price of oil inevitably rise.

Mikhail and his employer need to prepare for the cost of doing business to increase.

They should seriously consider globalization because of the falling trade and investment barriers.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 29 Mikhail is a strategist for a power tool...

Livia is the CEO of a line of luxury bedding, Livia Let Lie Inc., which has an online presence and production units in nine countries. In this scenario, Livia Let Lie Inc. is most likely a
1. ______

nonprofit organization.

nationalized firm.

sole proprietorship.

multinational enterprise.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 30 Livia is the CEO of a line of luxury bedding...

European aircraft maker Airbus invested $600 million in Mobile, Alabama, to build jetliners. Which of the following statements best explains why it used this strategy?
1. ______

to take advantage of the high labor costs in the southern United States

to take advantage of the high cost of living in the southern United States

to take advantage of the low impact of globalization in the United States

to take advantage of lower taxes in the southern United States

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 31 European aircraft maker Airbus invested $600...

During which period of globalization did the mode of entry into foreign markets primarily involve exporting goods?
1. ______

Globalization 1.0

Globalization 2.0

Globalization 3.0

Globalization 4.0

Which of the following is a feature of the Globalization 2.0 stage?
1. ______

Huge investments in fiber-optic cable networks around the world enabled companies to operate as global-collaboration networks.

Only sales and distribution operations took place overseas, while all the important business functions were located in the home country.

Two-way knowledge flowed between the local subsidiaries and their U.S. headquarters.

Multinational enterprises (MNEs) began to create smaller, self-contained replicas of themselves in a few key countries.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 33 Which of the following is a feature of the G...

Which of the following is an observable feature in the Globalization 3.0 stage?
1. ______

MNEs began to create smaller, self-contained copies of themselves, with all business functions intact, in a few key countries.

While the U.S. corporate headquarters set overarching strategic goals and allocated resources through the capital budgeting process, local mini-MNE replicas had considerable leeway in day-to-day operations.

Based on an optimal mix of costs, skills, and PESTEL factors, companies now freely locate business functions anywhere in the world.

Strategy formulation and implementation, as well as knowledge flows, followed a one-way path—from domestic headquarters to international outposts.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 34 Which of the following is an observable feat...

A trend observed during the Globalization 3.0 stage involves
1. ______

countries around the globe becoming more self-sufficient and independent.

multinational enterprises (MNEs) organizing as global collaboration networks.

privately owned firms getting nationalized.

world’s market economies becoming less integrated.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 35 A trend observed during the Globalization 3....

Peter is a senior vice president at a textile manufacturer that wants to move from being 20 percent globalized to 70 percent globalized in the next 10 years. What are some possible drawbacks that Peter’s company must anticipate?
1. ______

None. All political and economic factors point to the rise of globalization.

Rising wages may cancel out cost savings of access to low-cost input factors.

Governments may lower barriers to international trade.

Improved communication technology may lead to longer production cycles.

Which of the following defines the term globalization?
1. ______

part of a firm’s corporate strategy to gain and sustain a competitive advantage when competing against other foreign and domestic companies around the world

the process of closer integration and exchange between different countries, businesses, and peoples worldwide

a firm’s investments in value chain activities abroad

the process of reaping benefits from locating value chain activities in the world’s optimal geographies for a specific activity

How will an increase in coordinated economic and political integration between countries affect the world economy?
1. ______

The world’s market economies will become self-sufficient and independent.

There will be gains in social welfare and living standards across the globe.

The cost of labor will further decline in emerging economies.

There will be a movement away from global collaboration networks among multinational enterprises.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 38 How will an increase in coordinated economic...

How has China been affected by its one-child-per-family policy and appreciation of its currency?
1. ______

The purchasing power of its workforce has declined.

The government no longer cares about capturing more of the value added.

The standard of living within the economy has become lower.

The country’s advantage in low-cost manufacturing is now reduced.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 39 How has China been affected by its one-child...

Which of the following statements about multinational enterprises (MNEs) is true?
1. ______

MNEs benefit from advances in telecommunications technology.

MNEs are hindered by falling investment barriers.

MNEs benefit from rising trade barriers.

MNEs are hindered by reduced transportation costs.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 40 Which of the following statements about...

Which of the following describes a firm in the Globalization 1.0 stage?
1. ______

Asha Inc. had a large office in New York, which was one cog in a global network.

Asha Inc. had a large office in New York, which functioned with other large offices in Europe and Asia.

Asha Inc. had a base office in New York and a replica office in Amsterdam.

Asha Inc. had a base office in New York and distributed some of its products overseas.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 41 Which of the following describes a firm in t...

Which of the following will most likely harm the reputation of a multinational enterprise (MNE)?
1. ______

Principal-agent problems cause an MNE to merge with another MNE.

Increased competition causes an MNE to close a factory in a developing country.

Wages for workers in a factory owned by an MNE increase, causing profits to decline.

A sweatshop owned by an MNE has an explosion that kills hundreds of workers.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 42 Which of the following will most likely harm...

Which of the following contributed to the failure of Walmart in Germany?
1. ______

Germans were suspicious of Walmart’s “always low” prices.

German customers were expecting cheerful Walmart greeters but instead experienced gruff customer service.

The first Walmart boss in the country was German and failed to appropriately translate the U.S.-based company’s values.

Germany’s protective labor laws drove up costs.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 43 Which of the following contributed...

Which of the following has been a key driver for firms to expand globally during the Globalization 3.0 stage?
1. ______

benefits from lower labor costs in manufacturing and services

free use of formerly protected intellectual property

increasing trade barriers that protect businesses

exporting newly available raw materials, such as rubber and coal

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 44 Which of the following has been a key driver...

Managers at Umbrella Corporation, a firm in East Asia, want to make their company a global leader in business process outsourcing (BPO). What should the Umbrella managers look for as they decide where to locate their BPO facilities?
1. ______

large, undeveloped plots of land for greenfield projects

plentiful natural resources

many uneducated workers who are highly trainable

an abundance of well-educated English speakers

Unilever’s new-concept center is situated in downtown Shanghai, China, attracting hundreds of eager volunteers to test the firm’s latest product innovations on-site while Unilever researchers monitor consumer reactions. In this example, Unilever is trying to reap the benefits of
1. ______

location economies.

economies of scope.

learning races.

network effects.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 46 Unilever’s new-concept center is situa...

Duke & Duke Autos Inc. has shifted its research and development unit from its home country to Germany. This allows the company to be better informed about the latest developments in the automotive industry by tapping into the highly advanced automotive industry in Germany. In this scenario, Duke & Duke Autos Inc. is reaping the benefits of
1. ______

economies of scope.

location economies.

resource immobility.

resource ambiguity.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 47 Duke & Duke Autos Inc. has shifted its r...

A firm that draws on multiple, equally important innovation hubs throughout the world is using
1. ______

location economies.

a polycentric innovation strategy.

intellectual property exposure.

the CAGE distance framework.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 48 A firm that draws on multiple, equally...

Which of the following statements accurately explains the primary reason behind Walmart’s failure in Germany?
1. ______

inability to implement its trademark focused differentiation strategy in the German market

transfusion of American corporate values into a German location

Germany’s unfamiliarity with retail discount powerhouses

Metro’s hostile takeover of Walmart in Germany

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 49 Which of the following statements accurately...

Cyberdyne Systems Corp. manufactures cooking and baking equipment and has its base in the country of Handled. It has approximately 300 stores across the country and is already active in three foreign countries. It attempts to establish itself in the country of Balalaika and uses its low-cost strategy to do so. However, due to the additional costs associated with training, coordinating across geographic distances, and other costs associated with doing business in an unfamiliar cultural and economic environment, Cyberdyne Systems Corp. incurs huge financial losses in Balalaika. In this scenario, Cyberdyne Systems Corp.’s failure to establish itself successfully in Balalaika occurs most likely because
1. ______

it overestimated its need to protect its intellectual property.

it underestimated its liability of foreignness when entering the Balalaika market.

it underestimated its dwindling reputation before it enters the Balalaika market.

it overestimated the geographic and cultural distance between Handled and Balalaika.

Siobhan, the chief financial officer at an office furniture manufacturer in Canada, wants to build new plants in Canada rather than overseas. Which of these points should she make as she argues her case to the board of directors?
1. ______

“As the rest of the world globalizes, we will lead the way in strengthening our home nation.”

“Keeping our factories in Canada means facing up to the liability of foreignness.”

“Canada’s wages and benefits are so low compared with the rest of the world that it makes the most sense to build factories here.”

“It will be much more difficult to protect our intellectual property if we build factories overseas.”

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 51 Siobhan, the chief financial officer at an o...

Which of the following is part of Geert Hofstede’s cultural dimensions?
1. ______

short-term orientation

groupthink

risk taking

power distance

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 52 Which of the following is part of Geert Hofs...

Under the CAGE distance framework, the administrative and political distance between two countries primarily increases with
1. ______

differences in consumer incomes.

the absence of colonial ties.

physical remoteness.

the lack of trust and mutual respect.

PolyCon Corp., a tool and die maker, is considering where to locate its new factories and offices. According to the CAGE distance model, which of these countries is statistically most attractive to PolyCon?
1. ______

one that is much poorer than the country where PolyCon has its headquarters

one that is in the same trading bloc as PolyCon’s home country

a country that does not share the same currency as PolyCon’s home country

the country that is the greatest physical distance from existing PolyCon’s facilities

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 54 PolyCon Corp., a tool and die maker, is cons...

Aldorria and Estoccia are neighboring countries with strong economic disparities. However, both the countries share a common national language and the same political ideologies. The relationship between these two countries will most likely affect the trade of
1. ______

food processed in Estoccia.

movies and TV shows produced in Aldorria.

iron ore extracted in Estoccia.

luxury items manufactured in Aldorria.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 55 Aldorria and Estoccia are neighboring countr...

When two neighboring democratic countries that are part of a trading bloc follow different religions and social norms, they most likely have high________ distance.
1. ______

political

geographic

administrative

cultural

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 56 When two neighboring democratic countries th...

Pearson Specter Litt is a global internet company that offers country-specific variations of its sites, keeping in mind the linguistic and religious differences between the countries it serves. Pearson Specter Litt is most likely doing this to________ distance from the other countries.
1. ______

reduce its geographical

increase its administrative

increase its economic

reduce its cultural

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Global Product Strategies
Source : Chapter 10 Test Bank > MC Qu. 57 Pearson Specter Litt is a global internet co...

A greater________ distance between two trading countries increases the liability of foreignness.
1. ______

economic

cultural

political

administrative

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 58 A greater ________ distance between two...

Dinotopia is a country of English-speaking people and has a very profitable economy. Which of the following countries is most likely to be the closest to Dinotopia in terms of cultural distance?
1. ______

Khemed, which has the same wealth and per capita income as Dinotopia

Luftnarp, which has a very profitable economy and where people speak Luftnarpian

Maldonia, where people speak English and have a low standard of living

Moloni Republic, which is located close to Dinotopia and is easily accessible by road

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 59 Dinotopia is a country of English-speaking p...

How do Canada, Mexico, and the United States reduce the administrative and political distance between them?
1. ______

by adopting similar national cultures

by lowering the disparities between their per capita incomes

by partnering in the USMCA treaty

by reducing their linguistic differences

A payroll company in the nation of Osterlich is seeking to expand beyond its borders while limiting administrative and political distance in the new country. Which potential site is the best one for this type of expansion?
1. ______

one that considers payroll companies essential to national security

one that is outside of any trading blocs that Osterlich participates in

one that used to have a colonizer or colonized relationship with Osterlich

one that has extensive tariffs and trade quotas to protect businesses

The administrative and political distance between two trading countries decreases when
1. ______

there are Foreign Direct Investment restrictions in the host country.

the host country lacks an independent central bank.

tariffs and trade quotas exist in the host country.

there is a well-functioning capital market in the host country.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 62 The administrative and political distance be...

For which of the following companies will geographic distance be the most relevant factor in deciding whether to trade with a target country?
1. ______

a firm that manufactures cell phone batteries

a firm that extracts and exports iron ore

a firm that produces movies

a firm that sells wristwatches

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 63 For which of the following companies will ge...

Which of the following factors are the most important determinants of economic distance?
1. ______

the wealth and per capita income of consumers

the ethnicity and religion of consumers

the presence and influence of legal institutions in a country

the topography and climate of a country

Which of the following statements is true with regard to international trade between countries?
1. ______

Greater cultural distance between the home and host countries decreases the liability of foreignness to multinational companies.

Colony–colonizer relationships have a strong negative effect on bilateral trade between countries.

Wealthy countries engage in relatively more cross-border trade than poorer ones.

Political integrations decrease the expected trade intensity between two countries.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 65 Which of the following statements is true wi...

Which of the following statements best explains why Walmart is finding it difficult to replicate its existing business model in China?
1. ______

because of the political differences between China and the United States

because the USMCA treaty prohibits Walmart from investing in countries outside North America

because of the large economic distance between the United States and China

because Chinese consumers have not accepted Walmart’s low-cost strategy

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 66 Which of the following statements best expla...

Stratton Oakmont Inc., a well-established and reputed multinational enterprise, is headquartered in a highly developed economy. It wants to start its operations in Old Hebrides, considered one of the less developed nations in the world. How will this strategic move most likely affect Stratton Oakmont Inc.?
1. ______

It will benefit from economic arbitrage.

Stratton Oakmont will use its competitive advantage from economies of standardization.

Stratton Oakmont will replicate its existing business model easily.

It will be able to easily sell products for which demand varies by income.

Macmillan Toys Inc. is located in the nation of Ruffino near the nation of East Fenwick. Macmillan Toys is considering expanding into Rusalka. Both countries have similar consumer incomes and knowledge bases and share a common language. Also, the transportation networks between the countries are strong. Even so, the two nations have a long-standing dispute concerning the control of an area of land along their common border. Currently, Ruffino rules this land. Which of the following would most likely prevent Macmillan Toys from expanding into Rusalka?
1. ______

geographic distance

economic distance

political distance

cultural distance

Which of the following countries has a high geographic distance but a low cultural distance from the United States?
1. ______

Canada

Mexico

Ireland

Portugal

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 69 Which of the following countries has a high ...

Which of the following entry modes was used extensively in Globalization 1.0 stage?
1. ______

strategic alliances

acquisitions

greenfield operations

exports

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 70 Which of the following entry modes was used ...

Black Mesa Minerals Inc. wants to expand into the international market. It does not want to spend a very large amount of money for this process. However, Black Mesa Minerals wants to maintain some control in the foreign market. Which of the following would be the best entry mode for this firm?
1. ______

joint ventures

acquisitions

greenfield operations

exports

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 71 Black Mesa Minerals Inc. wants to expand int...

Which of the following modes of entering a foreign market allows for the lowest level of control?
1. ______

greenfield ventures

exporting

joint ventures

acquisitions

Which of the following is the most likely advantage of using foreign acquisitions as a foreign-entry mode?
1. ______

They are easy to initiate and terminate.

They require low amounts of investments in terms of capital.

They reduce a firm’s exposure to loss of reputation.

They are based on contracts rather than ownership.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 73 Which of the following is the most likely ad...

Gregarious Simulation Systems Inc. wants to globally expand its market. It intends to ensure that its mode of foreign entry allows it to have strong control over its operations and protect its intellectual property, although that may mean investing a significant amount of capital and other resources. In this scenario, which of the following foreign-entry modes would best suit Gregarious Simulation Systems?
1. ______

exporting

franchise agreement

acquisition

licensing

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 74 Gregarious Simulation Systems Inc. wants to ...

Exporting is best described as
1. ______

building new, fully owned plants and facilities from scratch.

purchasing an existing facility to launch a new production activity.

producing goods in one country to sell in another.

bringing goods or services into a country from abroad for sale.

Aperture Science Inc. has decided to enter into a foreign market by setting up its own production facilities and distribution channels from scratch. This will give it strong control over all its business activities. Which of these foreign-entry modes will Maddox most likely choose?
1. ______

greenfield operation

export

joint venture

acquisition

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 76 Aperture Science Inc. has decided to enter i...

Which of the following types of organizations comparatively requires the highest levels of investment and control?
1. ______

joint venture

franchising

acquisition

licensing

Blue Wave Industries Inc. manufactures swimming pool pump parts. It wants to globalize but is unable to spend a considerable amount of money until it’s sure foreign markets would be interested in its products. Which of these business ventures makes the most sense for Blue Wave Industries?
1. ______

licensing some of its newest pump designs to overseas competitors

acquiring a swimming pool pump parts manufacturer in another country

beginning a brownfield project in its home country

exporting swimming pool pump parts to many other countries

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 78 Blue Wave Industries Inc. manufactures swimming...

Fang and Bone Inc. is a snack manufacturer that wants to expand globally. Few people abroad are familiar with Fang and Bone snacks. The countries into which the company wants to expand require a high degree of local responsiveness when it comes to food, and the citizens of those countries already spend plenty of money on snacks. Which action should the leaders of Fang and Bone take?
1. ______

Achieve economies of scale by using the global standardization approach.

Pursue a multidomestic strategy that includes new “local” brands.

Keep costs low with undifferentiated product in the international strategy.

Appease pressures for cost reductions by following the transnational approach.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 79 Fang and Bone Inc. is a snack manufacturer t...

Hooper’s Store, a luxury motorcycle company, sells the same motorcycles and offers the same superior services in both its home country and foreign markets. The market in which it operates faces low pressures for both local responsiveness and cost reductions. Which of the following strategies within the cost-responsiveness framework does Hooper’s Store most likely pursue?
1. ______

a multidomestic strategy

a transnational strategy

a global-standardization strategy

an international strategy

Multinational enterprises (MNEs) such as Harley-Davidson, Rolex, and Starbucks are said to be following an international strategy because
1. ______

they pursue a cost-leadership strategy in their respective industries.

they are highly responsive to the local needs and preferences of customers in the host countries.

they offer the same products or services in all their stores throughout the world.

they attempt to combine benefits of localization and standardization strategies simultaneously.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 81 Multinational enterprises (MNEs) such as Harley...

Entertainment 720 Inc. operates in 20 countries around the globe. The company clearly understands that the skin and hair type of customers varies from one country to another. Consequently, its products are customized to suit local needs and preferences of customers, even though the costs incurred while making these products are exceptionally high. This strategy helps the company behave as a local firm in a foreign market. In this scenario, which of the following strategies does Entertainment 720 most likely implement?
1. ______

a multidomestic strategy

a local-as-global strategy

a transnational strategy

a sole provider strategy

Yubaba Inc., a company that manufactures and sells premium perfumes, is pursuing an international strategy. Axe Inc., a supermarket chain, follows a multidomestic strategy. Which of the following statements is most likely true of this scenario?
1. ______

Yubaba Inc. will sell the same products in both domestic and foreign markets, whereas Axe Inc. will customize its product offerings to suit local requirements.

Yubaba Inc. will pursue a differentiation strategy at the business level, whereas Axe Inc. will pursue a cost-leadership strategy at the business level.

Yubaba Inc. will be better protected from exchange rate fluctuations when compared to Axe Inc.

Yubaba Inc. will not be able to use its home-based core competencies in foreign markets as much as Axe Inc. will.

Blue Cat Inc., a manufacturer of high-technology medical devices, has its product development centers located in the United States and South Korea. The manufacturing units are located in China and the Philippines to benefit from low labor costs and access to original equipment manufacturers. This allows the company to competitively price its devices. Also, the various phone models sold by the company are uniform in all the foreign markets it operates in. In this scenario, which of the following strategies does Blue Cat most likely pursue?
1. ______

international strategy

multidomestic strategy

global-standardization strategy

transnational strategy

To keep track of the latest developments in computing, Lenovo’s research centers are located in China, the United States, and Japan. Also, to benefit from low-cost labor and reduced shipping costs, the company’s manufacturing facilities are in Mexico, India, and China. Lenovo’s products are the same for its domestic and foreign markets. Which strategy does Lenovo follow?
1. ______

a transnational strategy

a multidomestic strategy

a localization strategy

a global-standardization strategy

Perfect Paws Inc., a pet supply chain, is implementing a multidomestic strategy. Heartland Express, a company that manufactures small engines for the agricultural industry, is pursuing a global-standardization strategy. How will the two companies most likely differ from each other?
1. ______

Perfect Paws Inc. will focus more on cost-reduction than Heartland Express.

Perfect Paws Inc. will have its business functions spread across the world; Heartland Express’s business functions will be highly centralized.

Unlike Heartland Express, Perfect Paws Inc. will be able to pursue a differentiation strategy at the business level.

Unlike Heartland Express, Perfect Paws Inc. will be able to reap significant economies of scale and location economies.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 86 Perfect Paws Inc., a pet supply chain...

Bayside Inc., a reputed brand for fine art supplies, is implementing an international strategy. Cyberdyne Corp., a maker of mini-computer tablets, is pursuing a global-standardization strategy. Which of the following statements most likely holds true in this scenario?
1. ______

While Bayside Inc.’s competitive advantage lies in its high local responsiveness, Cyberdyne Corp. will lack such capabilities.

Cyberdyne Corp. focuses more on cost reductions when compared to Bayside Inc.

Cyberdyne’s business functions are highly centralized, whereas Bayside organizes its activities worldwide.

Cyberdyne is exposed to greater risks of exchange rate fluctuations.

Rainholm Industries is a large snack-food conglomerate that operates in more than 50 countries and employs more than 80,000 people across the world. It operates through multiple regional product divisions, which tend to function as autonomous profit-and-loss centers. This allows the company to reap significant economies of scale. Though each division acts as an autonomous firm with its individual regional leaders, frequent sharing of knowledge between the divisions allows for global learning. These factors help the company reconcile product and service differentiations at low cost. Which of the following strategies does Rainholm Industries most likely use?
1. ______

an international strategy

a focused-differentiation strategy

a multidomestic strategy

a transnational strategy

A firm pursuing a________ strategy would believe that best practices, ideas, and innovations should be diffused throughout the world.
1. ______

global-standardization

multidomestic

transnational

localization

Which of the following is a drawback of pursuing a transnational strategy?
1. ______

It creates bottlenecks for global learning.

It exposes a firm to diseconomies of scale and location.

It requires a global matrix structure, which is difficult to implement.

It involves locating all key business activities in the home country headquarters.

Globex Inc., a company popular for its dairy products, successfully follows a multidomestic strategy. Omni Consumer Products, a large conglomerate, pursues a transnational strategy. Which of the following statements is most likely true of this scenario?
1. ______

While Omni Consumer Products’ competitive advantage will lie in its high local responsiveness, Globex Inc. will lack such competencies.

Omni Consumer Products will face greater pressure for cost reductions than Globex Inc. due to strategy choice.

Both Globex Inc. and Omni Consumer Products will have to duplicate key business functions in multiple host countries.

While Globex Inc. will require a global matrix structure, Omni Consumer Products Inc. will require a traditional headquarters model.

Sirius Cybernetics Inc. has a national competitive advantage in the pharmaceutical industry. This means that the country
1. ______

is a world leader in the pharmaceutical industry.

has nationalized the pharmaceutical industry.

has low levels of competition, providing other multinational companies with an opportunity to take over the pharmaceutical industry.

is a potential foreign market for multinational pharmaceutical companies to sell their products.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Analyzing Industry Competition
Source : Chapter 10 Test Bank > MC Qu. 92 Sirius Cybernetics Inc. has a national compe...

Oceanic, a venture capital firm, has the opportunity to invest in one of two firms that are in the process of globalizing. Macmillan, an air-conditioner manufacturer, faces intense pressure from its home market. Rent a Swag, a dog-toy manufacturer, has encountered little competition in its country of origin. In which company should Oceanic invest?
1. ______

Macmillan, because air conditioners cost more to ship than dog toys do

Macmillan, because firms that face stiff competition at home tend to do better abroad

Rent a Swag, because firms that face little or no competition at home tend to do better abroad

Rent a Swag, because dog toys cost less to ship than air conditioners do

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Analyzing Industry Competition
Source : Chapter 10 Test Bank > MC Qu. 93 Oceanic, a venture capital firm, has the opp...

Jeremy is a strategist who wants to decide on the appropriate strategy to help his firm “go global.” Which of the following should he consider while choosing his strategy?
1. ______

He must be aware of the fact that despite globalization and the emergence of the internet, firm geographic location has actually maintained its importance.

He should rely on his firm’s business-level strategy as a clue to possible strategies pursued globally.

He should remember that he has only one framework at his disposal to make global strategy decisions.

He must remember that higher levels of control and a lower likelihood of any loss in reputation go along with less investment-intensive foreign-entry modes.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 94 Jeremy is a strategist who wants to decide o...

Jean Gene Inc. produces an inexpensive frozen croissant that is well tailored for the tastes of U.S. consumers. However, it has failed to satisfy the consumer preferences of its host country, France. In which of the following categories has Jean Gene performed poorly?
1. ______

cost-reduction

local responsiveness

global standardization

transnational strategy

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 95 Jean Gene Inc. produces an inexpensive...

Los Pollos Hermanos is a company that makes frozen lunch and dinner entrées. Based on what you know about companies like Nestlé, what action should Los Pollos Hermanos take as it strives to become multinational?
1. ______

Pursue a multidomestic strategy, customizing product offerings to suit local preferences.

Attempt an international strategy, controlling costs and taking advantage of economies of scale by selling the same (or very similar) products around the globe.

Try a global-standardization strategy, which creates standardized products and competes mainly on price.

Consider a transnational strategy by creating a blue ocean market.

The German multimedia conglomerate Bertelsmann operates in more than 60 countries throughout the world and owns many regional leaders in their specific product categories, including Random House Publishing in the United States. Bertelsmann operates its more than 500 regional media divisions as more or less autonomous profit-and-loss centers, but it attempts to share best practices across units. Global learning and human resource strategies for executives are coordinated at the network level. Bertelsmann is following a(n)
1. ______

multidomestic strategy.

international strategy.

global-standardization strategy.

transnational strategy.

The transnational strategy is similar to a(n)________ strategy because they both focus on product and/or service differentiation and low costs.
1. ______

liquidation

product diversification

international

blue ocean

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > MC Qu. 98 The transnational strategy is similar to a(n...

Michael Porter’s diamond framework explains
1. ______

national value creation.

domestic value creation.

national competitive advantage.

domestic competitive advantage.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Analyzing Industry Competition
Source : Chapter 10 Test Bank > MC Qu. 99 Michael Porter’s diamond framework exp...

In Michael Porter’s diamond framework,________ conditions describe a country’s endowments in terms of natural, human, and other resources.
1. ______

market

factor

demand

supply

Fierce domestic competition in Globex makes a tough environment for any motorcycle company. Success requires top-notch engineering of chassis and engines, as well as keeping costs and fuel consumption in check. As a result, Globex’s motorcycles have a competitive advantage in the global market. According to Porter’s diamond framework, this scenario shows the influence of competitive intensity in
1. ______

a peripheral industry.

a focal industry.

supportive complementors.

related complementors.

Toyota’s global success in the 1990s and early 2000s was based to a large extent on a network of world-class suppliers in Japan. This tightly knit network allowed for fast two-way knowledge sharing—which in turn improved Toyota’s quality and lowered its cost, which it leveraged into a successful blue ocean strategy at the business level. This example shows the effectiveness of
1. ______

factor conditions.

competitive intensity in a focal industry.

demand conditions.

related and supporting industries/complementors.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Analyzing Industry Competition
Source : Chapter 10 Test Bank > MC Qu. 102 Toyota’s global success in the 1990s a...

What is the engine behind globalization? Provide a real-world example.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-01 Define globalization, multinational enterprise (MNE), foreign direct inves
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 103 What is the engine behind globalization? Pro...

What are the implications of continued economic development across the globe for multinational enterprises (MNEs)? Explain using China as an example.

What are the main reasons a firm expands internationally? List them, and then give details on the benefits of one reason.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 105 What are the main reasons a firm expands...

How can expanding globally become a threat to the reputation of a multinational enterprise? Explain with the help of a real-world example.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 106 How can expanding globally become a threat t...

Explain how the distance between two countries increases with cultural and administrative and political distance.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 1 Easy
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 107 Explain how the distance between two countries...

What is meant by cultural distance? How does it affect a firm? Use a real-life example of a business affected by cultural difference. The example can be from your everyday life, or it can be something you have read or heard about.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 108 What is meant by cultural distance? How does...

What products and industries does geographic distance affect the most?

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 109 What products and industries does geographic...

When should a firm choose acquisition or greenfield operation as a foreign-entry mode?

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 110 When should a firm choose acquisition or gre...

When should a firm choose exporting as a foreign-entry mode?

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-04 Compare and contrast the different options MNEs have for entering foreign
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 111 When should a firm choose exporting as a for...

What are the two opposing forces that multinational companies have to face when competing around the globe?

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 112 What are the two opposing forces that multin...

In which industries is a multidomestic strategy common? Give an example.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 113 In which industries is a multidomestic...

Discuss the disadvantages of international expansion for firms, particularly in regard to intellectual property. Substantiate with an example from your reading assignment or from your own experience.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 3 Hard
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 114 Discuss the disadvantages of international e...

What are some of the disadvantages of a multidomestic strategy?

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Globalization, Multinational Enterprise, Foreign Direct Investment, and Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 115 What are some of the disadvantages of a...

Discuss how demand conditions within Porter’s diamond framework affect national competitive advantage.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Analyzing Industry Competition
Source : Chapter 10 Test Bank > SA Qu. 116 Discuss how demand conditions within Porter&...

Using the automotive industry in Germany as an example, explain how competitive intensity in a focal industry affects national competitive advantage.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-06 Apply Porter's diamond framework to explain why certain industries are mor
Topic : Analyzing Industry Competition
Source : Chapter 10 Test Bank > SA Qu. 117 Using the automotive industry in Germany as ...

Identify the three major advantages to a firm that wishes to expand their operations in international markets.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-02 Explain why companies expand internationally, and evaluate the advantages
Topic : The Advantages and Disadvantages of a Global Strategy
Source : Chapter 10 Test Bank > SA Qu. 118 Identify the three major advantages to a fir...

Explain what is meant with the term coined by Geert Hofstede known as national culture.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-03 Apply the CAGE distance framework to guide MNE decisions on which countrie
Topic : Strategies for Global Competition
Source : Chapter 10 Test Bank > SA Qu. 119 Explain what is meant with the term coined b...

According to the cost-responsiveness framework, what strategy do you believe Lenovo has used and why?

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 10-05 Apply the cost-responsiveness framework to evaluate the four different str
Topic : Integration-Responsiveness Framework
Source : Chapter 10 Test Bank > SA Qu. 120 According to the cost-responsiveness ...

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Chapter 10 Global Strategy Competing Around The World

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