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Exam 7: International Strategy: Creating Value in Global Markets

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Question 21

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In choosing one of the four basic strategies for competing in the global marketplace (international, global, multidomestic, transnational), the strategy that a company selects depends upon the degree of pressure that it is facing for revenues.

A) True
B) False

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Question 22

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

A) increase in the number of trading blocs and free trade zones
B) decrease in the number of trading blocs and free trade zones
C) increasing national trade restrictions
D) increasing local taxes and tariffs

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

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Question 23

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Demanding domestic consumers tend to push firms to move ahead of companies in other countries where consumers are less demanding and more complacent.

In reviewing the Indian Software industry and the diamond of national advantage, which of the following is a relatively weak set of factors in the national competitive advantage in this industry?

Renault paid 1 billion USD to acquire a 25 percent ownership stake in the Russian automaker AvtoVAZ in 2008. Just one year later, Russian Prime Minister Vladimir Putin threatened to dilute the Renault ownership stake unless it contributed more money to prop up AvtoVAZ, which was then experiencing a significant slide in sales. This is an example of _____________ risk.

The trade among nations has increased dramatically in recent years, and it is estimated that by 2015 the trade ________ nations will exceed the trade _______ nations.

By 2015, it is predicted that trade within nations will exceed trade across nations.

Because many countries are investing in countries other than their own, each country is becoming more autonomous and independent.

Rivalry is particularly intense in nations with conditions of strong consumer demand, strong supplier bases, and high new-entrant potential from related industries.

Exporting is an expensive way to enter foreign markets.

Two opposing pressures that managers face when they compete in foreign markets are cost reduction and adaptation to foreign markets.

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

__________ are most appropriate when a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries.

Globalization is a term used to mean the growing dissimilarity of laws, rules, norms, values and ideas across countries.

Countries with a strong supplier base benefit by adding efficiency to downstream activities.

Wholly owned subsidiaries are least appropriate where a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations.

A multidomestic strategy would likely include the use of high volume, centralized production facilities to maximize economies of scale.

GE Healthcare developed a portable, inexpensive ultrasound device for the emerging Chinese market. It expects to sell the device in the United States at a price cheap enough for every physician, paramedic, and emergency room nurse to purchase. This is an example of

According to The Economist article explained in Exhibit 7.1 in the textbook, the rate of GDP growth is the highest in the European Union and the United States.

Expanding the global presence of a firm automatically increases its scale of operations.