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Exam 7: International Strategy Creating Value in Global Markets

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Question 51

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When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market. When high pressures exist to lower costs, companies shouldchoose a(n) ________ strategy or ________ strategy in order to compete in the global marketplace.

A) global; transnational
B) global; multidomestic
C) international; multidomestic
D) international; transnational

E) All of the above
F) A) and B)

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Question 52

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According to studies by Rugman and Verbeke, most of the 500 largest companies in the world are global.

A) True
B) False

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Question 53

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L'Oreal acquired two U.S. firms that developed and sold hair care products to African-American customers. This permitted it to build a new ethnic hair care division in Europe and Africa. This represents an advantage of international expansion using

In considering the transnational strategy, Nestle evaluates the limits of decentralization. The closer they are to the consumer in activities such as branding and pricing, the more they tend to decentralize. The more they deal with production and logistics, the more they centralize decision-making. The production and logistics decisions involve ________ activities.

Theodore Levitt, a marketing strategist, argued that people around the world are willing to sacrifice preferences in product features, functions, and design for lower prices and lowerquality.

________ are fees that a multinational receives from a foreign licensee in return for its use of intellectual property (trademark, patent, trade secret, technology) .

According to the textbook, ________ economic integration has progressed at a faster pace than ________ economic integration.

Globalization opens the doors for companies to attract new customers. One of the challenges is to determine how to meet the needs of these customers who have

According to the textbook, globalization involves international exchange. Included in this exchange is trade in goods and services as well as the exchange of ________, ________, and ________ across countries.

If the U.S. dollar appreciates relative to foreign currency, what is likely to be the result for the U.S. company that has branches abroad?

To be responsive to local pressures, companies must ________ their offerings and strategies from country to country to reflect local consumer preferences.

________ occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house.

Firms following a global strategy strive to offer ________ products and services as well as locate manufacturing, research and development, and marketing activities in a limited numberoflocations.

Discuss the role of market size in motivating a company to pursue international expansion. Use statistics to illustrate your explanation.

Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy?

In addition to responding to pressures to lower costs, managers must strive to be responsive to global pressures to tailor their products to the demand of the local market in which they dobusiness.

The difference between a franchise contract and a licensing contract is that a

Canada and Mexico are the same distance from the United States, but trade is higher between the United States and Canada than with Mexico because

The sale of Boeing commercial aircraft and Microsoft operating systems in many countries enables these companies to benefit from

Which of the following is a reason for the rise in regional expansion?