Test Bank Docx Chapter 11 Marketing strategies

Chapter 12

Test Bank

Type: true-false

Title: Chapter 12 Question 01

1) The defining nature of the global value chain is the strategic coordination of an aggregated value chain.

a. True

b. False

Feedback: It is false because the global factory coordinates a network of value creating business activities across regions and countries and therefore has to coordinate a disaggregated value chain.

A-head reference: 12.1 Introduction

Type: true-false

Title: Chapter 12 Question 02

2) Motives for internationalising are based on factors that make operating in the firm’s home market less appealing and are known as push factors.

a. True

Feedback: Correct because changes in the home market, such as market saturation and rising cost of production, push firms to internationalisation.

A-head reference: 12.2 The motives for international production and global sourcing

b. False

Type: true-false

Title: Chapter 12 Question 03

3) Location advantages that cannot be accessed or exploited in the firm’s home country are pull factors in the internationalisation decision process.

a. True

Feedback: The location specific advantages of particular host countries pull firms out of their home countries.

A-head reference: 12.2 The motives for international production and global sourcing

b. False

Type: true-false

Title: Chapter 12 Question 04

4) The basic supply chain consists of the supplier, the focal firm, and the customer.

a. True

Feedback: A supply chain is a set of three or more organisations that are directly involved in the upstream and downstream flows of products, services, and/or information from a source to a customer.

A-head reference: 12.4 Managing international production and international logistics

b. False

Type: true-false

Title: Chapter 12 Question 05

5) In international supply chain management there is a trade-off between location advantages and logistics costs.

a. True

Feedback: It is true because the firm wants to access the most favourable location advantages, however the attractiveness is moderated by supply chain consideration such as transportation costs and lead times.

A-head reference: 12.4 Managing international production and international logistics

b. False

Type: true-false

Title: Chapter 12 Question 06

6) The decision-making authority of offshore factories typically are very low.

a. True

Feedback: True because an offshore factory has limited strategic responsibility and is primarily used as a production centre for low-cost goods that are subsequently exported.

A-head reference: 12.5 Understand strategic roles and competence of global factories

b. False

Type: true-false

Title: Chapter 12 Question 07

7) The typical strategic roles for international production activities linked to the most value adding is to attract global talent.

a. True

Feedback: Ferdows developed a typology of foreign production units.

A-head reference: 12.5 Understand strategic roles and competence of global factories

b. False

Type: true-false

Title: Chapter 12 Question 08

8) The type of activity that the MNE is investing in is a stronger determinant of the location choice than is the industry in which the firm operates.

a. True

Feedback: Recent research supports the notion that the decision to invest resources in a particular location should be viewed as a dyadic decision in which the location is selected for its ability to support a particular business activity.

A-head reference: 12.6 Understand global production networks

b. False

Type: true-false

Title: Chapter 12 Question 09

9) Cognitive distance refers to the extent to which the organisational and cultural settings differ between the home and host country.

a. True

Feedback: It can be rather challenging for multinationals to develop and manage strategic global suppliers because of the physical distance (geography) and cognitive distance (organizational and cultural). For example, The Japanese Toyota Motor Corporation finds it much easier to develop and maintain long-term and cooperative relationships with Japanese suppliers as they share the same culture and language.

A-head reference: 12.4 Managing international production and international logistics

b. False

Type: true-false

Title: Chapter 12 Question 10

10) International production and logistic is improved by adopting an orientation by paying attention to the total design and configuration of the international production network.

a. True

Feedback: It is true because when managers adopt a strategic orientation the firm captures more of its benefits and mitigates unanticipated costs primarily associated with the establishment of design tasks, processes, and routines.

A-head reference: 12.6 Understand global production networks

b. False

Type: multiple response question

Title: Chapter 12 Question 11

11) In international production and logistics distance refers to _______ Please select all that apply.

Feedback: These various elements of distance can increase information costs, coordination costs, and transport costs due to differences in economic development, differences in institutions, and cultural differences.

A-head reference: 12.4 Managing international production and international logistics

a. Geographic distance between origin and host countries

b. Economic distance

c. Institutional distance

d. Cultural distance

Type: multiple choice question

Title: Chapter 12 Question 12

12) The primary purpose of a physical efficient process is to _______ Please select all that apply.

Feedback: The correct response is a) because efficiency is gained by ensuring products match what consumers want to buy at the lowest production and logistics costs.

A-head reference: 12.4 Managing international production and international logistics

a. Supply predictable demand at the lowest possible cost

b. Shorten lead time as long as it does not increase costs

c. Focus on supplier selection based on cost

d. Maximize performance and minimize costs

Type: multiple choice question

Title: Chapter 12 Question 13

13) International production involves

Feedback: At a strategic level, the main decisions involve to make versus buy (outsource) and offshoring versus on-shoring (or nearshoring). Offshoring occurs when a firm move some or all of its operations or supplies overseas. Offshoring of production leads to international production. Outsourcing of production occurs by delegating a company’s production processes to an external supplier. Outsourcing can be local or overseas (offshore). Global sourcing occurs when a firm purchases materials or products from foreign suppliers. While international production involves FDI, global sourcing help avoiding such a risky investment.

A-head reference: 12.3 Decisions making in international production and international logistics

a. FDI

b. Outsourcing

c. Global sourcing

d. Nearshoring

Type: multiple choice question

Title: Chapter 12 Question 14

14) International production in the global factory is not only about lowering production costs and optimising logistics, but international production units should also be tapped as _______ Please select all that apply.

Feedback: The correct response is b) sources of competitive advantage since production units can be established to have enough strategic scope and autonomy to innovate and build relationships with key stakeholders.

A-head reference: 12.3 Decisions making in international production and international logistics

a. Managing suppliers

b. Sources of competitive advantage

c. Standardizing production

d. Generating process improvements

Type: multiple choice question

Title: Chapter 12 Question 15

15) To obtain as much information about the market and how end customers use products, a multinational implements

Feedback: The correct answer is b) because the focal firm uses foreign affiliates to as a source of new market information, technological development, and strategic direction.

A-head reference: 12.4 Managing international production and international logistics

a. Knowledge adoption mechanisms

b. Information sharing mechanisms

c. Knowledge exploitation mechanisms

d. Knowledge seeking mechanisms

Type: multiple choice question

Title: Chapter 12 Question 16

16) The three factors affecting knowledge transfer effectiveness in the global factory are; mode of ownership, location and distance, and _______

Feedback: The correct answer is c) because it may affect the firm’s ability to generate competitive advantage and effectively manage and process knowledge within the international production network.

A-head reference: 12.6 Understand global production networks

a. the use of an intermediary

b. Similarities in industry

c. Degree of internationalisation

d. Similarities in technology

Type: multiple response question

Title: Chapter 12 Question 17

17) Global production networks _______ (select all that apply)

Feedback: Different products require different types of supply chain.

A-head reference: 12.6 Understand global production networks

a. Are systems of connecting innovation

b. Create value

c. Are configured in such a manner that their knowledge and value-adding activities are coordinated and complementary.

d. Are single overseas factory

Type: multiple response question

Title: Chapter 12 Question 18

18) Trade imbalance refers to (select all that apply)

Feedback: The COVID-19 pandemic not only significantly reduced demand, but it also caused significant displacement of containers, leading to container shortages in South East Asia and China which are key source countries for many goods. This is a consequence of a phenomenon called directional imbalance, like trade imbalance. Directional imbalance refers to the fact that demand for shipping significant varies across directions of shipping. For example, there is significantly more demand for shipping cargoes from China to Europe, but a lot less demand in the opposite direction.

A-head reference: 12.4 Managing international production and international logistics

a. demand for shipping significant varies across directions of shipping

b. more demand for shipping cargoes from China to Europe, but a lot less demand in the opposite direction.

c. Directional imbalance

d. None of the above

Type: multiple choice question

Title: Chapter 12 Question 19

19) In the case of knowledge transfers, the firm’s degree of internationalisation has a positive effect on the firm’s _______

Feedback: The more internationalised the firm is the more it can benefit from increased organisational learning, local scientific cooperation, and lower costs of R&D spill-overs.

A-head reference: 12.4 Managing international production and international logistics

a. Innovative capacity

b. Economies of scope

c. Ability to reduce distance

d. Ability to reduce costs

Type: multiple choice question

Title: Chapter 12 Question 20

20) The nature of ‘fine-slicing’ the value chain is _______

Feedback: That is the definition of ‘fine-slicing’.

A-head reference: 12.6 Understand global production networks

a. Placing specific productive activities in the most optimal geographical location using the most appropriate ownership structure

b. Outsourcing some value chain activities

c. Offshoring the most value adding activities in the value chain

d. Internalising the most value adding activities in the value chain