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International Business
Q:
A distinct disadvantage of an international strategy is ________.
A) restricting the movement of core competencies to local markets
B) capitalizing on the benefits of global learning
C) customizing product offerings to local conditions
D) relying on home managers' knowledge of foreign markets
Q:
A distinct advantage of an international strategy is ________.
A) transferring core competencies to foreign markets
B) reaping benefits of global learning
C) customizing product offerings to local conditions
D) leveraging local managers' knowledge of their markets
Q:
Which of the following is NOT a disadvantage of the international strategy?
A) Headquarters can misread foreign-market opportunities and threats.
B) The transfer of core competencies to foreign markets is complicated by the need to adapt to local needs.
C) Local subsidiaries are not given the opportunity to adapt value activities and share what they have learned with headquarters.
D) The company can be blindsided by an unexpectedly innovative rival in a foreign market.
Q:
Firms that pursue a(n) ________ strategy create value by transferring core competencies from the home market to foreign markets in which local rivals lack a competitive alternative.
A) transnational
B) multidomestic
C) global
D) international
Q:
When the pressure for global integration is high and the pressure for local responsiveness is low, a company is most likely to pursue a(n) ________ strategy.
A) global
B) transnational
C) multidomestic
D) international
Q:
The integration-responsiveness (IR) expresses how a company's ________ is a function of the relationship between its value chain and the prevailing pressures for global integration or local responsiveness in its industry.
A) value proposition
B) target market
C) mission
D) strategy
Q:
In the global environment, firms use an international strategy, a multidomestic strategy, a global strategy, or a ________ strategy.
A) regional
B) standardization
C) transnational
D) locational
Q:
According to the integration-responsiveness (IR) grid, consumer electronics and corporate banking are two types of industries with ________ industry pressure for global integration and ________ industry pressure for local responsiveness.
A) low; low
B) high; high
C) low; high
D) high; low
Q:
Host governments' growing demands for increasing operational transparency will most likely spur companies to make their value chains more ________.
A) locally responsive
B) globally integrated
C) concise
D) complex
Q:
Advantages of following a strategy of local responsiveness include the ________.
A) improved ability to transfer skills to employees in different locations
B) opportunity to adopt a global advertising program
C) ease in standardizing manufacturing methods across countries
D) flexibility to apply location-specific skills to local opportunities
Q:
Which of the following is NOT a factor driving local responsiveness among global firms?
A) cross-national differences in distribution channels
B) diverging consumer tastes and preferences
C) cross-national differences in product standards
D) host government support of freer international trade
Q:
Which of the following is LEAST likely to trigger the standardization of consumer preferences?
A) intrinsic functions of money
B) global access to common media
C) increasing nationalism
D) improved communications technologies
Q:
Which of the following would most likely pressure an MNE to globally integrate its value activities?
A) costs of producing in separate facilities exceeding those of producing in a single facility
B) variability in consumers' tastes and preferences shifting across countries
C) market pressures to add new product features continually
D) demands imposed by host country governments
Q:
In the demand-pull versus supply-push views of the market, which of the following is best classified as a push dynamic that drives supply in the global market?
A) digitization
B) media access
C) standardization
D) market globalization
Q:
No matter the country or culture, money has three fundamental features that motivate consumers around the world to maximize purchasing power by buying the highest possible quality product for the lowest possible price. These three features include all of the following EXCEPT which one?
A) scarcity
B) difficulty of acquisition
C) difficulty of allocation
D) difficulty of saving
Q:
Firms that compete in the global marketplace typically face the asymmetric forces of pressures for ________ and ________.
A) global integration; local responsiveness
B) price reductions; cost reductions
C) politically sensitivity; market leadership
D) cost reductions; customer satisfaction
Q:
Social network analysis indicates that information flows more efficiently in a(n) ________ manner.
A) collaborative
B) competitive
C) hierarchical
D) impersonal
Q:
Which of the following refers to the means by which management applies the systems that link a company's value activities, whether those activities are performed in one or in many countries?
A) configuration
B) logistics
C) coordination
D) core competency
Q:
A ________ is a special outlook, skill, capability, or technology that runs through the firm's operations, weaving together all value activities into an integrated value chain.
A) core competency
B) value proposition
C) mission statement
D) learning curve
Q:
Johnson Enterprises manufactures computer chips used in cell phones. The MNE has long production runs that lower the per unit cost of each chip. The firm also purchases materials in bulk from its suppliers with whom Johnson has long-term contracts. Johnson is most likely benefiting from ________.
A) economies of scale
B) the cluster effect
C) digitization
D) location economies
Q:
Zara creates, produces, and distributes most of its products from its headquarters in Spain. Zara is most likely using a ________ configuration.
A) concentrated
B) coordinated
C) dispersed
D) logical
Q:
Citibank decides to open a call center in Mumbai, India because a detailed analysis of the country-specific advantages suggests that India is the optimal place for responding to customers' calls. Citibank is exploiting ________ by running a call center in India.
A) value configuration synergies
B) location economies
C) geographic arbitrage
D) value offshoring
Q:
Dispersing value activities where and in how many places in the world is the issue of ________.
A) logistics
B) clustering
C) coordination
D) configuration
Q:
Which of the following is considered a primary activity in a company's value chain?
A) shipping
B) product design
C) systems and solutions
D) materials and equipment
Q:
In the context of value chain analysis, the support activities of a firm include ________.
A) outbound logistics, human resources, and information systems
B) production, marketing, and operations
C) shipping and customer service
D) research and development
Q:
A company's value chain is best described as the ________.
A) variable sequence of converting product ideas into value for shareholders
B) mixture of activities taken to define product value standards and price points
C) discrete series of steps taken to move a product from conception to end-users
D) blueprint that must be followed to leverage the core capabilities of a global firm
Q:
A useful way to understanding the purpose of strategy is to think of the firm as a(n) ________, composed of a series of distinct activities, including production, marketing, materials management, R & D, human resources, information systems, and the firm infrastructure.
A) activity network
B) value constellation
C) task succession
D) value chain
Q:
Successful implementation of a(n) ________ strategy requires a company to develop unique competencies that rivals find hard, if not impossible, to match or copy.
A) differentiation
B) cost leadership
C) globalization
D) marketing
Q:
A differentiation strategy works well when ________.
A) a company designs a universal product for a broad market
B) buyers believe minor product differences are irrelevant to price
C) buyers are highly sensitive to price shifts and quality control
D) a company can continually develop products that have unique features
Q:
The essence of a differentiation strategy is to ________.
A) target the most sophisticated segment of the market
B) incorporate the greatest number of features into a product
C) offer a unique product that supports a premium price
D) outspend rivals on product advertising
Q:
A company that employs a ________ strategy creates value by generating customer insights and translating those insights into innovations.
A) differentiation
B) diversification
C) cost leadership
D) innovation
Q:
________ are the two basic strategies for creating value and attaining a competitive advantage in an industry.
A) Diversification and niche marketing
B) Industry leadership and market dominance
C) Customer satisfaction and product innovation
D) Cost leadership and differentiation
Q:
Value-Mart has achieved the status of overall low-cost producer in its industry, which means that Value-Mart ________.
A) can strongly defend its market position in the event of a price war
B) will earn the largest profits of any company in the industry
C) makes the most appealing product in its industry
D) can block the entry of new firms into the industry
Q:
A strategy that focuses on lowering operating costs is referred to as a ________ strategy.
A) differentiation
B) cost leadership
C) niche market
D) diversification
Q:
Which of the following is the purpose of a company's value proposition?
A) to exceed customers' expectations
B) to force competitors into a price war
C) to identify consumers for whom the company creates products
D) to explain why a consumer should buy the company's products
Q:
Which of the following has the greatest potential to transform an industry's structure?
A) a change in a competitor's management
B) a change in a competitor's pricing structure
C) the expansion of a distribution channel
D) the exit of a competitor from the industry
Q:
As a result of the global economic crisis, the potential for profitability in all sorts of industries has ________.
A) decreased
B) increased
C) become less predictable
D) become more projectable
Q:
Improving explanatory power of the IO paradigm can be done by considering the potential for ________ to lead to a company's sustained competitive advantage.
A) bright, motivated managers
B) political trends and events
C) cultural institutions
D) new markets
Q:
Which of the following is the most important constraint on the explanatory power of the IO paradigm?
A) Many industries are imperfectly competitive.
B) Many companies are locally but not internationally competitive.
C) Most customers have perfect knowledge of the products they select.
D) Most industries have many firms that each have small market shares.
Q:
What are the main arguments for and against Africa developing a common currency like the EU?
Q:
What led to the Greek financial crisis of 2010? What have been the roles of the IMF and European Central Bank in the crisis? What challenges with the euro facilitated the crisis?
Q:
How do exchange rate changes affect a company's marketing, production, and financial decisions? What predictors should a manager monitor to forecast exchange rate changes?
Q:
What methods are used by managers to forecast exchange rates? What are the main factors that influence exchange rates?
Q:
In a short essay, discuss purchasing power parity and the short-run problems that affect PPP.
Q:
What is a black market? Under what conditions might one exist?
Q:
In a short essay, compare the roles of the Federal Reserve Bank of New York and the European Central Bank.
Q:
Describe the exchange rate arrangements used in the EU, Hong Kong, China, and the U.S.
Q:
What is a Special Drawing Right (SDR)? How is it used?
Q:
What is the International Monetary Fund (IMF)? What are its objectives? What occurs when a country joins the IMF today?
Q:
El Salvador's hard peg exchange rate arrangement involves the use of both the U.S. dollar and its own separate legal tender.
Q:
The IMF uses the quota system to determine how much a country may borrow from the Fund.
Q:
Producers are affected by exchange rate changes because goods manufactured in a country with a weak currency will be relatively cheap in world markets.
Q:
An MNE would most likely benefit from converting local currency into its home-country currency when exchange rates are most favorable so it can maximize its return.
Q:
A current account deficit suggests that a country is importing more than it is exporting and building up foreign debt.
Q:
Technical forecasting relies on trends in economic variables to predict future exchange rates.
Q:
When forecasting exchange rates, forecasters must predict the magnitude, timing, and direction of change in exchange rates.
Q:
The three variables predicted by forecasting are the timing, magnitude, and length of exchange rate movements.
Q:
Fundamental forecasting uses trends in economic variables to predict future rates.
Q:
Fundamental forecasters assume that if current exchange rates reflect all facts in the market, then under similar circumstances, future rates will follow the same patterns.
Q:
The International Fisher Effect implies that the country with the higher interest rate should have lower inflation.
Q:
The International Fisher Effect links interest rates and exchange rates.
Q:
The Big Mac Index suggests that exchange rates should leave Big Mac hamburgers costing the same in the U.S. as abroad.
Q:
The Big Mac Index perfectly explains the relative size of economies.
Q:
Purchasing power parity (PPP) is a well-known theory that seeks to define relationships between currencies.
Q:
According to the purchasing power parity theory, a change in relative interest rates between two countries must cause a change in exchange rates.
Q:
In a multiple exchange-rate system, the government determines which kinds of transactions are to be conducted at which exchange rate.
Q:
The Japanese yen is an example of a soft currency.
Q:
Although central banks are responsible for foreign exchange policy, they have no power to intervene in exchange rate markets.
Q:
Central bank reserve assets are kept in three major forms: foreign-exchange reserves, silver, and gold.
Q:
A currency that is pegged to another currency is usually changed on a supply-and-demand basis.
Q:
Demand for a country's independently floating currency is a function of the demand for that country's goods, services, and financial assets.
Q:
Inflation in the United States would cause China's massive dollar reserves to lose value.
Q:
According to the Treaty of Maastricht, a euro applicant must have a total outstanding government debt that does not exceed 60% of its GDP.
Q:
The major objective of the European Central Bank is to control taxes as a means of deficit spending.
Q:
None of the new members of the EU has yet been allowed to adopt the euro as its currency.
Q:
An independently floating exchange rate is adjusted periodically at a fixed pronounced rate.
Q:
Dollarization of a currency occurs when a country takes all of its own currency out of circulation and replaces it with U.S. dollars.
Q:
The SDR is equal in value to the U.S. dollar.
Q:
The IMF's primary role is to identify exchange rate regimes.
Q:
According to the text, which currency is expected to experience the most change in the upcoming years?
A) yen
B) yuan
C) euro
D) U.S. dollar