Strategy In The Global Environment

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Question 1
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The globalization of production has been decreasing as companies face lower barriers to international trade and location economies.

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Question 2
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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.

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Question 3
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A company can increase its growth rate by taking goods or services developed at home and selling them internationally.

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Question 4
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Location economies refer to the economic benefits that arise from performing a value creation activity at central headquarters.

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Question 5
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A company may create value if it can leverage the skills created within subsidiaries and apply them to other operations within the firm's global network.

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Question 6
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By offering a standardized product to the global marketplace and manufacturing that product in each nation in which it does business,a multinational company can realize substantial scale economies.

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Question 7
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Local responsiveness may be driven by economic and political demands placed on companies by host country governments.

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Question 8
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A transnational strategy makes the most sense when there are strong pressures for cost reductions and when demand for local responsiveness is minimal.

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Question 9
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A localization strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences and when cost pressures are not too intense.

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Question 10
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Companies 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.

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Question 11
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Most manufacturing companies begin their global expansion by exporting.

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Question 12
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An international strategy may not be viable in the long term and to survive,companies that can pursue it need to shift toward a global standardization strategy.

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Question 13
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When a company licenses its technology it can quickly lose control over it.

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Question 14
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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.

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Question 15
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If a company's competitive advantage derives from its control of proprietary technological know-how,it should either license its technology to others or pursue a joint venture.

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Question 16
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The best part of global strategic alliances is that selection of the right partner does not affect success of the alliance.

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Question 17
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An important ingredient of success in a strategic alliance appears to be cultural sensitivity.

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Question 18
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Southwest Airlines,Sony,and Costco conduct business in two or more countries.These companies are referred to as multinational companies.

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Question 19
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In 2000,the best-selling Christmas item was the Razor Scooter and in 2001 it was Bratz dolls.Today,these items are not in high demand.This represents differences in customer tastes and preferences.

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Question 20
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MTV is a good example of a company that has had to pursue a transnational strategy.

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