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Which of the following factors is the most important determinant of economic distance?


A) The wealth and per capita income of consumers
B) The ethnicity and religion of consumers
C) The presence of legal institutions in a country
D) The topography of a country

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

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United Borova Laboratories Inc.has a national competitive advantage in the pharmaceutical industry.This means that the country:


A) is a world leader in the pharmaceutical industry.
B) has nationalized the pharmaceutical industry.
C) has low levels of competition, providing other multinational companies with an opportunity to take over the pharmaceutical industry.
D) is a potential foreign market for multinational pharmaceutical companies to sell their products.

E) None of the above
F) B) and C)

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For which of the following products is an international strategy most suitable?


A) For luxury goods that can be shipped across the globe
B) For products with low value-to-weight ratios such as steel
C) For food products that are specific to certain cultures
D) For products with high linguistic content

E) A) and B)
F) C) and D)

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Silca Electronics Inc.is a consumer-electronics company based in the country of Pelo.It has approximately 300 stores across the country and is already active in three foreign countries.It attempts to establish itself successfully in the country of Zevar, 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, Silca Electronics Inc.incurs huge financial losses in Zevar.In this scenario, Silca Electronics Inc.'s failure to establish itself successfully in Zevar occurs most likely because:


A) it overestimates its need to protect its intellectual property.
B) it underestimates its liability of foreignness when entering the Zevar market.
C) it underestimates its dwindling reputation before it enters the Zevar market.
D) it overestimates the geographic and cultural distance between Pelo and Zevar.

E) B) and D)
F) B) and C)

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Zeda 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 Zeda in terms of cultural distance?


A) Olax, which has the same wealth and per capita income as Zeda
B) Jordax, which has a very profitable economy and where people speak Jordaxian
C) Segar, where people speak English and have a low standard of living
D) Terra, which is located close to Zeda and is easily accessible by road

E) C) and D)
F) A) and D)

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The global-standardization strategy arises out of the combination of:


A) high pressure for cost reductions and low pressure for local responsiveness.
B) high pressure for local responsiveness and low pressure for cost reductions.
C) low pressure for both local responsiveness and cost reductions.
D) high pressure for both local responsiveness and cost reductions.

E) B) and D)
F) A) and D)

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Onico Inc., a luxury car company, sells the same cars and offers the same superior services in both its home country and foreign markets.The market it operates in faces low pressures for both local responsiveness and cost reductions.Which of the following strategies within the integration-responsiveness framework does Onico Inc.most likely pursue?


A) A multidomestic strategy
B) A transnational strategy
C) A global-standardization strategy
D) An international strategy

E) A) and B)
F) A) and C)

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After testing its products in foreign markets by pursuing an international strategy, GR Foods Inc.wants to expand by pursuing a multidomestic strategy.How will this most likely affect the company?


A) The company's operations will become more cost efficient.
B) The company's exposure to exchange rate fluctuations will reduce.
C) The company will be able to reap greater benefits from economies of scale.
D) The company will be exposed to a lower risk of intellectual property appropriation.

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

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For a firm pursuing a global-standardization strategy, which of the following bases of competition becomes its primary weapon?


A) Product differentiation
B) Superior customer service
C) Local responsiveness
D) Price

E) C) and D)
F) B) and D)

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What is meant by globalization? How has it affected the economies around the world?

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Globalization is a process of closer int...

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Lucar Steels Inc.has decided to enter into a foreign market by setting up its own production facilities and distribution channels from scratch.This will allow it to have strong control over all of its business activities.What is the foreign entry mode most likely opted by Lucar Steels Inc.?


A) Greenfield operation
B) Export
C) Joint venture
D) Acquisition

E) A) and B)
F) A) and C)

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When should multinational enterprises (MNEs)use a transnational strategy?

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The transnational strategy arises out of...

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Which of the following is one of the features of an international strategy?


A) It is characterized by limited local responsiveness.
B) It is one of the newest types of global strategies.
C) It is characterized by cost-leadership as a preferred business strategy.
D) It is often used successfully by firms with relatively small domestic markets.

E) A) and D)
F) None of the above

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Gamma Foods Inc., a company popular for its dairy products, successfully follows a multidomestic strategy.RiverGem Inc., a large conglomerate, pursues a transnational strategy.Which of the following statements is most likely true of this scenario?


A) While RiverGem Inc.'s competitive advantage will lie in its high local responsiveness, Gamma Foods Inc. will lack such competencies.
B) Gamma Foods Inc. will face greater pressure for cost reductions than RiverGem Inc. due to its strategy choice.
C) Both Gamma Foods Inc. and RiverGem Inc. will have to duplicate key business functions in multiple host countries.
D) While Gamma Foods Inc. will require a global matrix structure, RiverGem Inc. will require a traditional headquarters model.

E) A) and B)
F) A) and C)

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

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Companies that face a highly competitive...

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When should a multinational company pursue an international strategy?

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An international strategy is essentially...

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A(n) _____ arises out of the combination of high pressure for local responsiveness and high pressure for cost reductions.


A) transnational strategy
B) multidomestic strategy
C) international strategy
D) global-standardization strategy

E) A) and C)
F) B) and D)

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European aircraft maker Airbus is investing $600 million in Mobile, Alabama, to build jetliners.Which of the following statements best explains why it is employing this strategy?


A) To take advantage of the high labor costs in the southern United States
B) To take advantage of the high cost of living in the southern United States
C) To take advantage of the low impact of globalization in the United States
D) To take advantage of lower taxes in the southern United States

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

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When do companies from wealthy countries benefit from trade with other wealthy countries?

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Companies from wealthy countries benefit...

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

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Demand conditions are the specific chara...

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