Global Strategy: Competing Around The World

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Questions Bank

What Is Strategy
Strategic Leadership: Managing the Strategy Process
External Analysis: Industry Structure, Competitive Forces, and Strategic Groups
Internal Analysis: Resources, Capabilities, and Core Competencies
Competitive Advantage, Firm Performance, and Business Models
Business Strategy: Differentiation, Cost Leadership, and Blue Oceans
Business Strategy: Innovation, Entrepreneurship, and Platforms
Corporate Strategy: Vertical Integration and Diversification
Corporate Strategy: Strategic Alliances, Mergers, and Acquisitions
Global Strategy: Competing Around the World
Organizational Design: Structure, Culture, and Control
Corporate Governance and Business Ethics

All Questions

Question 1

Free

True/False

Most businesses around the world are more than 50 percent globalized, meaning that more than half their revenues are from outside the home country.

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True

False

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Question 2

Free

True/False

In recent years as economic forces have changed, many governments and multinational enterprises have been more interested in negotiating bilateral trade agreements between countries rather than multinational agreements through international agencies.

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True

False

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Question 3

Free

True/False

Businesses located in countries that have relatively weak domestic demand rarely make the leap to multinational enterprises because they must focus their attention on shoring up their economic positions in their home countries.

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True

False

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Question 4

Free

True/False

Communities of learning are metropolitan areas that have large numbers of high school graduates who are ready for a university education.

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True

False

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Question 5

Free

True/False

Administrative and political distances, such as the presence or absence of colonial ties, are part of the CAGE distance framework.

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True

False

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Question 6

True/False

The cultural distance between Australia and the United States is relatively high because of the physical distance between the two nations.

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True

False

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Question 7

True/False

Foreign-entry modes such as acquisitions and greenfield projects are usually disadvantageous because they require a high level of capital and resource investment but allow for a low level of control.

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True

False

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Question 8

True/False

MacAdam Enterprises sells the same sparkplugs in more than 30 countries. MacAdam is an example that helps to support the globalization hypothesis.

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True

False

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Question 9

True/False

When multinational enterprises enter host countries such as Saudi Arabia and Japan, the most logical option is usually to pursue a multidomestic strategy even though that strategy rarely leads to significant cost reductions.

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True

False

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Question 10

True/False

The term demand conditions refers to how high the volume of demand is for a particular product in a particular country.

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True

False

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Question 11

Multiple Choice

Because keeping cost low is critical to IKEA's value innovation, it switched from a(n)

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transnational strategy to a multidomestic strategy.

transnational strategy to a global-standardization strategy.

international strategy to a multidomestic strategy.

international strategy to a global-standardization strategy.

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Question 12

Multiple Choice

Amber is a strategist for a furniture manufacturer that has a large presence in the United States and Canada. By checking economic and political reports, she knows that trade and investment barriers are falling among wealthy nations. She also knows that the price of oil has dropped 50 percent in the previous two years. Based on this information, what action should Amber and her company take?

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Amber and her employer should wait out this period of uncertainty and take action when market forces are more stable.

They should anticipate market corrections because investment barriers and the price of oil inevitably rise.

Amber and her employer need to prepare for the cost of doing business to increase.

They should seriously consider globalization because of the falling trade and investment barriers.

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Question 13

Multiple Choice

Esther is the CEO of a line of accessories and cosmetics, Starring Me! Inc., which has retail stores and production units in five countries. In this scenario, Starring Me! Inc. is most likely a

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nonprofit organization.

nationalized firm.

sole proprietorship.

multinational enterprise.

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Question 14

Multiple Choice

European aircraft maker Airbus invested $600 million in Mobile, Alabama, to build jetliners. Which of the following statements best explains why it used this strategy?

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to take advantage of the high labor costs in the southern United States

to take advantage of the high cost of living in the southern United States

to take advantage of the low impact of globalization in the United States

to take advantage of lower taxes in the southern United States

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Question 15

Multiple Choice

During the period of Globalization 1.0, the mode of entry into foreign markets primarily involved

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exporting goods.

making foreign direct investments.

making foreign institutional investments.

licensing production and distribution.

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Question 16

Multiple Choice

Which of the following is a feature of the Globalization 2.0 stage?

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Huge investments in fiber-optic cable networks around the world enabled companies to operate as global-collaboration networks.

Only sales and distribution operations took place overseas, while all the important business functions were located in the home country.

Two-way knowledge flowed between the local subsidiaries and their U.S. headquarters.

Multinational enterprises (MNEs) began to create smaller, self-contained replicas of themselves in a few key countries.

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Question 17

Multiple Choice

Which of the following is an observable feature in the Globalization 3.0 stage?

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Knowledge flow between the local replicas of the multinational enterprises and their U.S. headquarters is limited.

Only sales and distribution functions of a multinational enterprise are located in a few key countries.

Based on an optimal mix of costs, skills, and PESTEL factors, companies now freely locate business functions anywhere in the world.

The typical firm has reorganized from a global enterprise with different centers of expertise to a multinational company with self-contained operations in a few selected countries.

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Question 18

Multiple Choice

A trend observed during the Globalization 3.0 stage involves

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countries around the globe becoming more self-sufficient and independent.

multinational companies organizing as global-collaboration networks.

privately owned firms getting nationalized.

world's market economies becoming less integrated.

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Question 19

Multiple Choice

Sven is a senior vice president at a textile manufacturer that wants to move from being 20 percent globalized to 70 percent globalized in the next 10 years. What are some possible drawbacks that Sven's company must anticipate?

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None. All political and economic factors point to the rise of globalization.

Rising wages may cancel out cost savings of access to low-cost input factors.

Governments may lower barriers to international trade.

Improved communication technology may lead to longer production cycles.

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Question 20

Multiple Choice

The process of closer integration and exchange between different countries and peoples worldwide is

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diversification.

globalization.

standardization.

modification.

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