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Exam 7: International Strategy: Creating Valuein Global Markets

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Question 31

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Typically,the least risky method of entry into a foreign market is through the establishment of a wholly owned foreign subsidiary so that the parent organization can maintain a high level of control.

A) True
B) False

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Question 32

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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.

A) True
B) False

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Question 33

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As in the case of Siebel Systems (now part of Oracle) ,elements of a global strategy may facilitate the competitive advantage of differentiation by _______.

The trend towards worldwide markets makes it easier to predict where competitors will spring up.

High levels of environmental awareness in Denmark have led to a decline in Danish industrial competitiveness in the international marketplace.

The World Bank publishes the Euromoney magazine Country Risk Rating semiannual report.In the text,the January 2013 sampling of these ratings indicates that Norway is the best country in which to invest in terms of its expected level of risk based on the evaluation of its political,economic and structural risks and debt indicators and access to capital.

What are the key arguments that Rugman and Verbeke make in favor of regional strategies as opposed to global strategies?

Explain the difficulties a small company faces when making the decision to internalize.

Explain how the two opposing forces facing MNC managers (cost reduction and local adaptation)create pressures to operate with a global or multidomestic strategy,respectively.

High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy?

In considering the decision to offshore,which of the following generally is not one of the hidden costs?

Increasing international exchange in goods and services can run into the difficulty of having one offer that meets the needs of customers at differing income levels.

Many international firms are increasing their efforts to market their products and services to countries such as India and China as the ranks of their middle class continue to increase.

High pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy?

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

Corporations with multiple foreign operations that act very independently of one another are following a multidomestic strategy.

__________ entail the creation of a third-party legal entity,whereas __________ do not.

Arbitrage opportunities are more than simple trading opportunities and account for a large part of the success Walmart experiences.

In a global strategy a firm operates all of its businesses under a single common strategy,regardless of location.

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