International Strategy

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Question 1
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In place of relatively stable and predictable domestic markets, firms across the globe find that they are competing in relatively unstable and unpredictable global markets.

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Question 2
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After a firm decides to compete internationally, it must select its strategy and choose a mode of entry into international markets.

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Question 3
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Because there are still several industrial and consumer markets in which only domestic firms compete, many firms do not have to be able to compete internationally.

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Question 4
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One reason why firms pursue international opportunities is to extend the product's life cycle.

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Question 5
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A reason that firms use international strategies is to secure needed resources, especially minerals and energy.

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Question 6
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In some industries, technology drives globalization because the economies of scale necessary to reduce costs cannot be met by competing in domestic markets alone.

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Question 7
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Rivals Airbus and Boeing have multiple manufacturing facilities and outsource activities partly for the purpose of developing economies of scale as a source of being able to create value for customers.

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Question 8
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As an indication of the importance of economies of scale, Ford Motor Company runs a single global business developing cars and trucks that can be built and sold through the world.

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Question 9
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Coca Cola and PepsiCo are examples of firms that have found it unnecessary to aggressively pursue international strategies because of extensive growth opportunities available in the U.S. market.

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Question 10
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Multinational firms have many opportunities to learn from their experiences in international markets, but they must have a strong R&D system to absorb the knowledge.

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Question 11
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Cultural differences affect location advantages in that business transactions are less difficult for a firm to complete when there is a strong match among the cultures with which the firm is involved.

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Question 12
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Location advantages are influenced by costs of production, access to natural resources and critical supplies, as well as the needs of customers, but not culture.

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Question 13
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The three corporate-level international strategies are cost leadership, differentiation, and focus.

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Question 14
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When a firm initially pursues an international business-level strategy, the resources and capabilities established in the home country frequently allow the firm to pursue the strategy into markets located in other countries.

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Question 15
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Michael Porter's Determinants of National Advantage describe factors associated with the firm's domestic environment that contribute to its dominance in a particular global industry.

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Question 16
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Both the size and the nature of a country's domestic demand for a particular industry's good or service are important in Porter's determinants of national advantage.

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Question 17
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Having substantial supplies of critical basic natural resources is a necessary condition for a country to support businesses that can successfully compete in international markets.

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Question 18
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South Korea's success in international markets is primarily a result of its abundant natural resources.

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Question 19
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Italy has become the leader in the shoe industry because of related and supporting industries such as a well-established leather-processing industry that provides the leather needed to construct shoes and related products.

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Question 20
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A firm based in a country with a national competitive advantage is not guaranteed success as it implements its chosen international business-level strategy. Instead, the actual strategic choices managers make may be the most compelling reasons for success or failure.

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