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International Business
Q:
The use of price as a competitive weapon to drive weaker competitors out of a national market is known as _____.
A. multipoint pricing
B. predatory pricing
C. leader pricing
D. price discrimination
E. price skimming
Q:
Which of the following is true of price elasticity of demand?
A. The price elasticity of demand is only defined by the competitive conditions in a country.
B. Demand is said to be inelastic when a large change in price produces a small change in demand.
C. Demand is said to be elastic when a large change in price produces a small change in demand.
D. Price elasticity tends to be greater in countries with low income levels.
E. The elasticity of demand is inversely proportional to the number of competitors offering a particular product.
Q:
Which of the following is true of price discrimination as a part of international pricing strategy?
A. The more competitors there are, the lesser consumers bargaining power will be.
B. The more competitors there are, the less likely consumers will be to buy from the firm that charges the lowest price.
C. A firm may charge a higher price for its product in a country where competition is limited than in one where competition is intense.
D. Many competitors cause low elasticity of demand.
E. If a firm raises its prices above those of its competitors, consumers will refuse to switch to the competitors products.
Q:
When a large change in price produces only a small change in demand, demand is said to be _____.
A. flexible
B. consistent
C. inelastic
D. elastic
E. dynamic
Q:
Demand is said to be _____ when a small change in price produces a large change in demand.
A. elastic
B. inelastic
C. relative
D. rigid
E. dynamic
Q:
A measure of the responsiveness of demand for a product to changes in price is known as _____.
A. the demand to price ratio
B. demand and price dynamics
C. price-demand rigidity
D. demand function of pricing
E. price elasticity of demand
Q:
In which of the following conditions does arbitrage occur?
A. When a firm offers a product at low prices through discount coupons and promotions
B. When a firm sells a product at higher prices to make a profit from relatively fewer sales
C. When a firm imports products from a manufacturer and distributes it directly through retail outlets
D. When a firm purchases products in a country where prices are lower and resells it in a country where prices are higher
E. When a firm prices its products at the least cost, risking losses, in order to grab market share
Q:
If a firm is unable to keep its national markets separate, individuals or businesses may undercut its attempt at price discrimination by engaging in _____.
A. speculation
B. arbitrage
C. dumping
D. countertrade
E. forecasting
Q:
Which of the following is necessary for a firm to ensure profitable price discrimination?
A. The firm must sell a standardized product.
B. The firm must be able to keep its national markets separate.
C. The firm must encourage other firms and competitors to engage in arbitration.
D. Products sold by the firm must have same prices elasticities of demand in different countries.
E. Products must be sold in countries where a small change in prices produces a large change in demand.
Q:
Which of the following is true of price discrimination?
A. It involves charging whatever the market will bear.
B. In a competitive market, prices may have to be higher than in a market where the firm has a monopoly.
C. It makes economic sense to charge the same prices in different countries.
D. It exists whenever consumers in different countries are charged the same price for the same product, irrespective of variations.
E. It cannot help a company maximize its profits.
Q:
_____ exists whenever consumers in different countries are charged different prices for the same product.
A. Penetration pricing
B. Premium pricing
C. Predatory pricing
D. Price discrimination
E. Price skimming
Q:
Which of the following is an argument against standardized advertising?
A. One large effort to develop a campaign fails to produce better results than 40 or 50 smaller efforts.
B. It fails to make use of local talent available in other cultures.
C. Cultural diversity makes it extremely difficult to develop a single advertising theme that is effective worldwide.
D. Royalties make it the most expensive form of advertising.
E. It increases the costs of value creation.
Q:
Which of the following is an argument against standardized advertising?
A. One large effort to develop a campaign fails to produce better results than 40 or 50 smaller efforts.
B. It fails to make use of local talent available in other cultures.
C. Advertising regulations may block implementation of standardized advertising.
D. Royalties make it the most expensive form of advertising.
E. It increases the costs of value creation.
Q:
Which of the following is an argument for standardized advertising?
A. Consumer tastes and preferences are universal.
B. A message that works in one nation will invariably work in every other country.
C. Advertising regulations always promote standardized advertising.
D. Many brand names are global.
E. The costs of value creation may be increased by standardized advertising.
Q:
Pull strategies tend to be emphasized:
A. for complex new products
B. for consumer goods
C. for industrial goods
D. when distribution channels are short.
E. when few print or electronic media are available.
Q:
A push strategy is emphasized when:
A. distribution channels are short.
B. sufficient print and electronic media are available to carry the marketing message.
C. consumers have a low level of literacy.
D. the products being sold are consumer goods.
E. professional services are being offered.
Q:
Which of the following marketing strategies relies on access to advertising media?
A. Personal selling
B. Direct selling
C. Push strategy
D. Pull strategy
E. Copy testing
Q:
Which of the following is a drawback of push strategies?
A. It can be expensive when the distribution channel is long.
B. It decreases interaction with consumers.
C. It does not allow consumers to be educated on the benefits of a complex product.
D. It is useful only in advanced nations where consumers are sophisticated and highly educated.
E. It can only be used to sell industrial products.
Q:
Which of the following allows a firm to educate potential consumers about the features of a product?
A. Direct selling
B. Mass media advertising
C. Pull strategy
D. Standardized advertising
E. Lag strategy
Q:
Firms that sell _____ favor a push strategy. Direct selling allows these firms to educate potential consumers about the features of their product.
A. professional services
B. food grains
C. consumer products
D. industrial products
E. standardized products
Q:
Firms in consumer goods industries that are trying to sell to a large segment of the market generally favor a(n) _____ strategy.
A. push
B. international
C. lag
D. pull
E. exclusive distribution
Q:
Which of the following communication strategies relies primarily on mass media advertising as opposed to personal selling?
A. Telemarketing
B. Pull strategy
C. Push strategy
D. Customized advertising
E. Point-of-purchase advertising
Q:
Which of the following communication strategies relies primarily on personal selling rather than mass media advertising?
A. Visual merchandising
B. Pull strategy
C. Push strategy
D. Copy testing
E. Standardized advertising
Q:
Which of the following is true of barriers to international communication?
A. Noise tends to increase the probability of effective communication.
B. Source effects can be beneficial for an international business when potential consumers in a target country have a bias against foreign firms.
C. Many international businesses try to promote positive source effects by deemphasizing their foreign origins.
D. Fewer firms vie for the attention of prospective customers in developing countries, thus the noise level is lower.
E. Research suggests that a consumer may use country of origin as a cue when evaluating a product, particularly if he or she has detailed knowledge of the product.
Q:
In terms of communication strategy, in highly developed countries such as the United States:
A. noise is extremely high.
B. source effects are always positive.
C. country of origin effects are not applicable.
D. cultural barriers do not exist.
E. pull strategies are more important than push strategies.
Q:
In the context of barriers to international communication, _____ refer(s) to the amount of other messages competing for a potential consumer's attention.
A. alternative signals
B. source effects
C. noise
D. channel effects
E. country of origin effects
Q:
According to research, when do consumers usually use the country of origin as a cue when evaluating a product?
A. When a firm tries to deemphasize its foreign origins
B. When consumers lack detailed knowledge of a product
C. When an advertising campaign stresses the positive performance attributes of a product
D. When a limited number of messages compete with each other for consumers' attention
E. When a firm resorts to personal selling instead of mass media advertising
Q:
_____ refer(s) to the extent to which the place of manufacturing influences product evaluations.
A. Noise levels
B. Country of origin effects
C. Source effects
D. Push strategies
E. Pull strategies
Q:
When are source effects damaging for an international business?
A. When promotional messages are used to stress the positive performance attributes of its product
B. When fewer firms compete for the attention of prospective customers in developing countries
C. When the firm's marketing strategy emphasizes personal selling rather than mass media advertising
D. When potential consumers in a target country have a bias against foreign firms
E. When international businesses deemphasize their foreign origins
Q:
In terms of communication strategy, _____ refer(s) to the situation when the receiver of a message evaluates the message based on the status or image of the sender.
A. source effects
B. noise levels
C. cultural barriers
D. pull strategy
E. push strategy
Q:
Which of the following factors limits a firm's ability to use the same marketing message?
A. Channel exclusivity
B. Channel quality
C. Cultural differences
D. Concentrated retail systems
E. Fragmented retail systems
Q:
The best way for a firm to overcome cultural barriers is to:
A. hire only local managers.
B. develop cross-cultural literacy.
C. encourage cosmopolitan tastes and preferences.
D. operate in markets that are culturally similar to its home market.
E. use the same marketing message in every country.
Q:
Which of the following is a potentially critical variable that can jeopardize the effectiveness of a firm's international communication?
A. Channel length
B. Market segmentation
C. Import effects
D. Noise levels
E. Channel quality
Q:
Which of the following is an advantage of longer distribution channels?
A. Competitive pricing strategies
B. Lower markups
C. Lower product prices
D. Reduced selling costs in fragmented retail sectors
E. Lower profit margins due to multiple intermediaries
Q:
Which of the following is an advantage of longer distribution channels?
A. Decreased profit margins
B. Lower markups
C. Lower product prices
D. Reduced selling costs in concentrated retail sectors
E. Greater market access
Q:
Which of the following is a drawback of longer distribution channels?
A. Higher selling costs in a fragmented retail sector
B. The inability to enter exclusive distribution channels
C. Lower selling costs in a concentrated retail sector
D. Higher prices that consumers are charged
E. Greater aggregate markups due to a lack of intermediaries
Q:
Which of the following is a drawback of longer distribution channels?
A. Higher selling costs in a fragmented retail sector
B. The inability to enter exclusive distribution channels
C. Lower selling costs in a concentrated retail sector
D. Lower product prices
E. Greater aggregate markups
Q:
Which of the following is true of choosing a distribution strategy?
A. The optimal distribution strategy is determined by the relative costs and benefits of each alternative, which vary from country to country.
B. A choice of distribution strategy does not determine which channel the firm will use to reach potential consumers.
C. The channel length, the final selling price, and the firms profit margin are completely independent of each other.
D. The longer a distribution channel, the lower the aggregate markup.
E. The longer a distribution channel, the lower the price that consumers are charged for the final product.
Q:
How does a firm's decision regarding the location of its production facilities vary based on the availability of flexible manufacturing technologies?
Q:
Describe the Six Sigma methodology.
Q:
What are the ways in which improved quality control reduces costs?
Q:
What are the important strategic objectives of an international firm's production and logistics functions?
Q:
Which of the following has caused proprietary software solutions to implement electronic data interchange systems obsolete?
A. Just-in-time inventory system
B. Flexible machine technology
C. The Internet
D. Dynamic capabilities
E. Social Networking
Q:
Which of the following is a result of using electronic data interchange systems?
A. It helps a firm decentralize materials management decisions to the plant level.
B. It helps achieve longer productions runs in manufacturing units.
C. It excludes customers from the system.
D. It helps firms in reducing their inventory turnover.
E. It delays the realization of economies of scale.
Q:
Which of the following is a consequence of an electronic data interchange system?
A. Increased in production costs
B. Reduction in paperwork between suppliers, shippers, and the purchasing firm
C. Helps a firm centralize materials management decisions
D. Decrease in flexibility and responsiveness of the supply system
E. Leaves a firm without a buffer stock of inventory
Q:
Geminia System, manufacturer of car components, wants to set up a system that will help in sending invoices to its customers once orders for input supply are placed. Which of the following should the company use to perform this function?
A. Computer-aided design system
B. Lean production
C. Just-in-time inventory system
D. Electronic data interchange
E. Social networking
Q:
Which of the following allows suppliers, shippers, and the purchasing firm to communicate with each other via the Internet with no time delay?
A. Electronic data interchange system
B. Data warehousing system
C. Batch processing system
D. Skills inventory system
E. Just-in-time inventory system
Q:
Firms now typically use _____ via the Internet to coordinate the flow of materials into manufacturing, through manufacturing, and out to customers.
A. flexible manufacturing technology
B. lean production
C. computer-aided manufacturing
D. electronic data interchange
E. just-in-time inventory systems
Q:
One way to reduce the risks associated with a global supply chain that operates on just-in-time principles is to:
A. depend on one supplier for an important input.
B. outsource the production of inputs only to advanced countries.
C. hold an excess buffer stock of inventory.
D. source inputs from several suppliers located in different countries.
E. avoid using electronic data interchange.
Q:
Which of the following is a consequence of using just-in-time inventory systems?
A. It slows down inventory turnover.
B. It increases inventory holding costs.
C. It increases the amount of working capital a firm needs.
D. It can help firms improve product quality.
E. It does not allow defective inputs to be spotted immediately.
Q:
The drawback of a just-in-time inventory system is that it:
A. increases the total capital required by a firm.
B. leaves a firm without a buffer stock of inventory.
C. increases inventory holding costs, such as warehousing and storage costs.
D. is less efficient than traditional system in spotting and fixing defective inputs.
E. lowers a companys profitability as measured by return on capital invested.
Q:
Under a more traditional system as opposed to a just-in-time inventory system, warehousing parts for weeks before they are used:
A. reduces the total working capital required by a firm.
B. allows many defective parts to be produced before a problem is recognized.
C. results in a near error-free production process.
D. reduces the costs related to inventory holding.
E. reduces the need to write off excess unsold inventory against earnings.
Q:
A major cost saving from just-in-time inventory systems comes from:
A. a shift in focus away from quality.
B. increasing productivity of workers.
C. speeding up inventory turnover.
D. creating a buffer stock of inventory.
E. writing off excess unsold inventory against earnings.
Q:
Which of the following increase(s) under just-in-time (JIT) inventory system?
A. Amount of working capital for inventory
B. Inventory turnover
C. Number of defective parts
D. Inventory holding costs
E. Storage costs
Q:
Which of the following is true about firms using just-in-time (JIT) inventory system?
A. A company is more likely to have excess unsold inventory that it has to write off against earnings.
B. Parts enter the manufacturing process immediately; they are not warehoused.
C. It is difficult to spot and fix defective inputs.
D. The amount of working capital a company needs to finance inventory increases.
E. A firm has ample buffer stock of inventory.
Q:
The basic philosophy behind just-in-time (JIT) inventory systems is to:
A. economize on inventory holding costs.
B. reduce inventory turnover.
C. create a buffer stock of inventory.
D. reduce costs by reducing quality.
E. increase the total working capital requirement.
Q:
_____ refers to a logistics system designed to deliver parts to a production process as they are needed, not before.
A. Inventory information system
B. Basket trading system
C. Buffer stock system
D. Just-in-time inventory system
E. Real-time processing system
Q:
Which of the following was pioneered by Japanese firms during that countrys remarkable economic transformation during the 1960s and 1970s?
A. Lean production
B. Flexible manufacturing technology
C. Dynamic capabilities
D. Just-in-time inventory systems
E. Global learning
Q:
Which of the following is an objective of logistics?
A. Increase the cost of value creation
B. Manage firms global supply chain at a low cost
C. Reduce inventory turnover
D. Reduce a firm's customer responsiveness
E. Increase inventory holding costs
Q:
Which of the following is a disadvantage of a firm that enters long-term alliances?
A. It may lose the ability to realize economies of scale.
B. It does not have the authority to terminate the alliance if partners fail to perform.
C. It loses the capability to capture the benefits of vertical integration.
D. It may limit its strategic flexibility by the commitments it makes to its alliance partners.
E. It risks losing opportunities to build on its skills and capabilities.
Q:
The arrangement of strategic alliances with suppliers was pioneered by the:
A. retail industry of America.
B. large auto companies of Japan.
C. large electronics firms of Germany.
D. information technology companies of India.
E. large scale manufacturing units of China.
Q:
Which of the following is a drawback of entering into strategic alliances with independent suppliers?
A. The firm loses out on many of the benefits arising from investments in specialized assets.
B. The strategic relationship between a firm and each of its essential suppliers is not market-mediated.
C. The firm risks giving away key technological know-how to a potential competitor.
D. It cannot be terminated even if the supplier fails to perform.
E. They are short-term relationships in which firms have stronger bargaining power than their suppliers.
Q:
Which of the following statements is true about strategic alliances with suppliers?
A. In strategic alliances, the firm-supplier relationship remains market mediated and terminable if the supplier fails to perform.
B. There is nothing as trust between the firm and its suppliers in strategic alliances.
C. Strategic alliances are short-term relationships that benefit only the independent suppliers.
D. In a strategic alliance the benefits arising from investments in specialized assets and vertical integration are lost.
E. A firm that enters long-term alliances is expanding its strategic flexibility by committing to its alliance partners.
Q:
The government of Lithaya placed a large order for buses with Blue Ace Inc., a manufacturing company in Lodesia. In return, it asks the company to subcontract some work to Lithayan manufacturers. This is an example of a(n) _____ in international business.
A. consortium agreement
B. cartel arrangement
C. offset agreement
D. monopoly arrangement
E. collective bargaining agreement
Q:
Which of the following is a disadvantage of outsourcing production to independent suppliers?
A. It makes it necessary for firms to invest in specialized assets.
B. It reduces the strategic flexibility of a firm by limiting its ability to adapt during changes in exchange rates.
C. It increases the risk of suppliers expropriating a firm's proprietary product technology for their own use.
D. It increases the bureaucratic inefficiencies and costs associated with transfer pricing decisions.
E. It makes it difficult to achieve coordination in an organization by increasing the number of subunits in it.
Q:
Which of the following is true of vertical integration?
A. It does not provide long-term competitive advantage.
B. A firm risks losing its proprietary product technology to competitors.
C. A firm can leverage its dynamic capabilities to produce a range of elegantly designed products.
D. Substantial investments in specialized assets are required to manufacture a component.
E. The greater the number of subunits in an organization, the more problems controlling those units.
Q:
Which of the following can a vertically integrated firm that buys its components from independent suppliers avoid?
A. Problems associated with transfer pricing decisions
B. The risk of losing its proprietary product technology to competitors
C. The risk of losing out on the opportunities to enhance its dynamic capabilities
D. Being dependent on suppliers to invest in specialized assets
E. Responding to changes in exchange rates and trade barriers
Q:
Which of the following is a disadvantage of vertical integration?
A. It fails to protect a firm's proprietary product technology.
B. Firms lose out on the opportunities to build dynamic capabilities.
C. It is difficult to determine appropriate prices for goods transferred to subunits within a firm.
D. It fails to facilitate investments in highly specialized assets.
E. It does not allow a firm to exercise tight control over its production process.
Q:
Which of the following is an advantage for a firm that buys component parts from independent suppliers?
A. It makes planning, coordination, and scheduling of adjacent processes easier.
B. It protects a firms proprietary production technology.
C. It facilitates investments in highly specialized assets.
D. It allows a firm to maintain its flexibility by switching orders between suppliers.
E. It provides the opportunity to build dynamic capabilities in production activities.
Q:
Which of the following refer(s) to skills of a corporation that become more valuable over time through learning?
A. Global learning
B. Accrued interests
C. Dynamic capabilities
D. Learning effects
E. Universal needs
Q:
If a firm possesses proprietary product technology, the best option for that firm would be to:
A. manufacture the product in-house so that it does not lose its competitive advantage.
B. outsource the production activities to independent suppliers in order to realize economies of scale.
C. merge with competitors to reduce investments on technology.
D. share the technology to make the industry more competitive.
E. transfer the technology to less developed countries.
Q:
A firm should make a component internally rather than contracting it out to a supplier when:
A. substantial investments in specialized assets can be avoided.
B. the firm uses proprietary product technology that helps in gaining competitive advantage.
C. it wants to reduce the number of subunits in the organization.
D. the optimal location for manufacturing a product is beset by political risks.
E. different tax regimes and exchange rate movements increase the complexity of transfer pricing decisions.
Q:
Which of the following is an argument that supports vertical integration?
A. It makes planning, coordination, and scheduling of adjacent processes easy.
B. It facilitates the transfer of proprietary product technology.
C. It increases the number of subunits in an organization.
D. It eliminates the need to invest in specialized assets.
E. It prevents a firm from maintaining flexibility.
Q:
Which of the following statements is true about specialized assets?
A. The value of a specialized asset significantly increases in its next-best use.
B. When one firm must invest in specialized assets to supply another, mutual dependency is created.
C. When substantial investments in specialized assets are required, firms prefer to contract it out to a supplier.
D. A specialized asset is a flexible manufacturing technology that can be put to multiple uses.
E. Using a specialized asset allows firms to switch their orders easily between suppliers.
Q:
A(n) _____ refers to an asset designed to perform a specific task, whose value is significantly reduced in its next-best use.
A. fixed asset
B. specialized asset
C. intangible asset
D. liquid asset
E. deferred asset
Q:
Which of the following is a recent trend among international businesses regarding make-or-buy decisions?
A. Foreign facilities are considered nothing more than low-cost production facilities.
B. Research and design operations are restricted to home-country production facilities.
C. Manufacturing facilities are being based in each major national market.
D. Firms are avoiding time-based competition with each other.
E. Outsourcing decisions are expanding to embrace the production of service activities.
Q:
The Maroon Apparel company controls the weaving, dyeing, cutting, and sewing of its merchandise. Apart from these activities, it also manufactures buttons, zips, buckles, and other accessories for its apparel. This is done in order to exercise tight control over its manufacturing processes and to reduce production costs. This strategy of the company is known as _____.
A. vertical integration
B. unrelated diversification
C. horizontal integration
D. mass customization
E. conglomerate diversification
Q:
Which of the following statements is true about make-or-buy decisions?
A. Make-or-buy decisions are applicable only to physical products and not service activities.
B. Historically, most outsourcing decisions have involved the manufacture of physical products.
C. Information technology companies in the United States are testing code in-house and outsourcing the code writing process.
D. Domestic businesses do not suffer from problems regarding outsourcing decisions.
E. Volatile exchange rate movements complicate outsourcing decisions.
Q:
Due to the upward migration in the strategic role of foreign production sites, they are now viewed as:
A. centers that do not generate valuable knowledge.
B. globally dispersed centers of excellence.
C. liabilities that add to the cost structure of the company.
D. sweatshops where unskilled labor churns out low-cost goods.
E. low quality manufacturing centers.
Q:
The flow of skills and product offerings from foreign subsidiary to home country and from foreign subsidiary to foreign subsidiary is known as _____.
A. dumping
B. reverse mentoring
C. cultural relativism
D. global learning
E. learning effects