D D D Question 21 In high-tech and knowledge intensive industries where speed is critical, internal development as a way of diversification is widely advised. O True O False Question 22 The BCG model suggests that O Stars could potentially become the next cash cows O More resources need to be poured into dogs since they are struggling O Question marks bring in the highest profit due to the high industry growth rate O Cash cows are critical because they ensure a bright future for the company Question 23 When transaction costs such as search cost and monitoring cost are higher than administrative costs of internalizing the activity, firms should O use pooled negotiating power O vertically integrate O harvest and exit the market O outsource the activity 2 pts 2 pts 2 pts D Question 24 Unlike related diversification, in unrelated diversification, synergy is derived vertically through O sharing activities O competitive dynamics O leveraging core competencies O parenting advantage Question 25 Which of the following is NOT true about international business? O Cultural difference can be a major source of management risk O Counterfeiting in international markets harms the profit level of multinational companies O Firms should only seek countries where there is minimum political risk O There are risks involved in doing business in another country Question 26 2 pts O exporting-strategic alliance-joint venture-licensing-franchising-wholly owned subsidiary O exporting-wholly owned subsidiary-strategic alliance-joint venture-franchising-licensing O exporting-franchising-licensing-joint venture-strategic alliance-wholly owned subsidiary O exporting-licensing-franchising-strategic alliance-joint venture-wholly owned subsidiary 2 pts 2 pts When expanding internationally, firms can choose between various entry modes. Entry modes have varying degrees of investment(risk) and ownership(control), and these two go hand-in-hand. Which of the following lists the entry modes from least risk/control to highest risk/control? Question 27 Which of the following strategy has centralized core competencies and aims to exploit the knowledge and capabilities of the parent firm at the home country headquarters? O global strategy O transnational strategy O international strategy O multidomestic strategy Question 28 Which of the following is NOT a valid motivation for international expansion? O to take advantage of price differences O to reinvigorate the industry life cycle O to take advantage of local government incentives O to create more jobs in the domestic market Question 29 O True 2 pts O False 2 pts When a firm doing international business tries to determine which of the two opposing pressures (reducing costs vs. adapting to local markets) weighs more heavily, the firm needs to consider whether the characteristics of the industry and the consumers are homogeneous around the world. 2 pts Question 30 Google operates R&D center around the world in places like India, Israel, and Ukraine. Innovative projects such as the one in Israel to implement YouTube annotations for videos are now widely used. Google seeks to be innovative, and best practices from around the world are freely shared and implemented in other places to help improve global competitiveness. This is an example of O international strategy O multidomestic strategy O transnational strategy O global strategy Question 31 Italy has a rich history and beautiful climate. As a result, it is a major tourist attraction and tourism industry takes up to 13% of Italy's GDP. According to the diamond model of national advantage, Italy's competitiveness in tourism is due to O related and supporting industries O factor endowments O firm strategy, structure, and rivalry 2 pts O demand conditions 2 pts