A company may create value if it can leverage the competencies created within subsidiaries and apply them to other operations within the firm's global network.

Select one:

True

False

Company leaders that pursue a global standardization strategy are trying to develop a business model that simultaneously achieves low costs and differentiates the product offering across geographic markets.

Select one:

True

False

Despite the globalization of production and markets, many of the most successful companies in certain industries are still clustered in a small number of countries.

Select one:

True

False

Companies should form strategic alliances with firms that have a reputation for being opportunistic.

Select one:

True

False

Location economies refer to the economic benefits that arise from performing a value creation activity at an optimal location.

Select one:

True

False

Strategic alliances can be designed to make it difficult (if not impossible) to transfer technology that is not meant to be transferred.

Select one:

True

False

Factor endowments, the cost and quality of factors of production, are a prime determinant of the competitive advantage that certain countries have in certain industries.

Select one:

True

False

One advantage of a joint venture is that a company may benefit from a local partner's knowledge of the many dimensions of a host country.

Select one:

True

False

By offering a standardized product to the global marketplace and manufacturing that product in each nation in which it does business irrespective of production costs, a multinational company can realize substantial scale economies.

Select one:

True

False

Most manufacturing companies begin their global expansion by exporting.

Select one:

True

False

Which of the following statements is true in the context of globalization of production and markets?

Select one:

a. The shift from national to global markets has curbed competitive rivalry in many industries.

b. Globalization of production has significantly increased the costs for many industries.

c. The globalization of markets and production has failed to threaten companies' home markets.

d. Consolidated oligopolies continue to be dominated by a small number of companies despite globalization.

e. Globalization has significantly increased the threat of entry.

Which of the following is an advantage of franchising?

Select one:

a. It ensures tight control over quality.

b. It frees companies from the task of monitoring and assisting operations at franchisees.

c. It enables the company to collect all the profits made by the franchisees.

d. It involves low development costs and risks.

e. It enables companies to engage in global strategic coordination.

Which of the following is NOT a risk of exporting?

Select one:

a. Tariff barriers

b. Transportation costs

c. Delegation of marketing activities to a local agent

d. High manufacturing costs

e. Location diseconomies

Which of the following entry modes allows a company to engage in global strategic coordination?

Select one:

a. Franchising

b. Wholly owned subsidiaries

c. Joint ventures

d. Licensing

e. Exporting

Dietizza is a fast food network that makes low-calorie pizzas. As the firm wishes to expand its operations in different locations, it has licensed a few entrepreneurs to open Dietizza outlets under the company's trademark. The entrepreneurs will take up the responsibility of costs, while Dietizza will assist them in running operations. The company will receive royalty payments and a percentage of profits from the entrepreneurs. Which of the following concepts is illustrated here?

Select one:

a. Franchising

b. Exporting

c. Setting up of a wholly owned subsidiary

d. Joint venture

e. Strategic alliance

Which of the following ideas is a localization strategy is based on?

Select one:

a. There are cost advantages associated with manufacturing a standard product for global consumption.

b. There is a convergence in the tastes of consumers in different nations of the world.

c. Competitive strategy should be centralized at the world head office.

d. There are substantial economies of scale to be realized from centralizing global production.

e. Consumer tastes and preferences differ among national markets.

The Achilles heel of international strategy is that

Select one:

a. customer preferences eventually become identical.

b. competitors inevitably emerge.

c. customization of products makes the company lose its credibility.

d. economies of scale cannot be achieved.

e. non-price differences among products hold little importance.

Which entry mode gives a multinational the tightest control over foreign operations?

Select one:

a. Entering into a joint venture with a foreign company to set up overseas operations

b. Franchising

c. Exporting from the home country and letting a foreign agent organize local marketing

d. Setting up a wholly owned subsidiary

e. Licensing

Global economies of scale can be realized by

Select one:

a. spreading the fixed costs associated with developing.

b. curbing bargaining power with suppliers.

c. limiting the utilization of production facilities.

d. decreasing cost savings through learning effects.

e. restricting the expansion of overseas sales.

Host government demands generally

Select one:

a. do not encompass local content rules.

b. increase pressures for local responsiveness.

c. impede a company's ability to differentiate its product offering across national borders.

d. decrease pressures for cost reductions.

e. compel companies to abandon localization strategies.