The Strategy Of International Business

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Question 1

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A firm's strategy can be defined as the actions that managers take to attain the goals of the firm.

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Question 2

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The preeminent strategic goal for most firms is to maximize the value of the firm for its owners and shareholders.

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Question 3

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The customer is able to garner the benefit of the consumer surplus because one firm is competing with other firms for the customer's business, so the firm must charge a lower price than it could if it were a monopoly supplier.

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Question 4

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According to Porter, the way to create superior value is to drive down the cost structure of the business and/or differentiate the product in some way so that consumers value it more.

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Question 5

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For a firm, all positions on the efficiency frontier are viable.

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Question 6

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Support activities are always less important than the primary activities in achieving a competitive advantage.

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Question 7

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The success of many multinational corporations is based not just upon the goods or services that they sell in foreign nations, but also upon the core competencies that underlie the development, production, and marketing of those goods or services.

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Question 8

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The skills within the firm that a competitor cannot easily match or imitate are known as the core knowledge base.

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Question 9

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Systematic increases in sales that have been observed to occur over the life of the product are referred to as the experience curve.

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Question 10

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One of the sources of economies of scale is the ability to spread fixed costs over a small volume.

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Question 11

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Once a firm has established a low-cost position, it can act as a barrier to new competition.

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Question 12

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In a multinational enterprise, skills are typically generated at the home location and are then dispersed to the rest of the organization.

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Question 13

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To leverage subsidiary skills, companies should establish incentive systems that encourage local employees to acquire new skills.

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Question 14

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Universal needs exist when the tastes and preferences of consumers in different nations are similar if not identical.

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Question 15

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When consumer tastes and preferences differ significantly between countries, there is low pressure for local responsiveness.

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Question 16

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Threats of protectionism, economic nationalism, and local content rules dictate that international businesses manufacture locally.

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Question 17

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Pursuing a global standardization strategy is appropriate when a firm is facing low pressures for cost reduction but high pressure for local responsiveness.

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Question 18

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As competition intensifies, global standardization strategies and transnational strategies tend to become less viable, and managers need to direct their companies toward either an international strategy or a localization strategy.

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Question 19

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Research has shown that in the modern multinational enterprise, core competencies and skills typically reside in the home country.

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Question 20

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Enterprises that pursue an international strategy tend to decentralize control over marketing and product strategies.

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