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Exam 10: Global Strategy: Competing Around the World

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Question 21

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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

A) nonprofit organization.
B) nationalized firm.
C) sole proprietorship.
D) multinational enterprise.

E) B) and D)
F) None of the above

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Question 22

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Milk Benefits Inc., a company popular for its dairy products, successfully follows a multidomestic strategy. Andrew Products Inc., a large conglomerate, pursues a transnational strategy. Which of the following statements is most likely true of this scenario?

A) While Andrew's competitive advantage will lie in its high local responsiveness, Milk Benefits Inc. will lack such competencies.
B) Andrew Products Inc. will face greater pressure for cost reductions than Milk Benefits Inc. due to strategy choice.
C) Both Milk Benefits Inc. and Andrew Products Inc. will have to duplicate key business functions in multiple host countries.
D) While Milk Benefits Inc. will require a global matrix structure, Andrew Products Inc. will require a traditional headquarters model.

E) A) and B)
F) B) and C)

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Question 23

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A firm is said to be pursuing a polycentric innovation strategy when

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

Emirates, Etihad Airlines, and Qatar Airways are a threat to U.S. legacy carriers because they offer

Which of the following modes of entering a foreign market allows for the lowest level of control?

Multinational enterprises (MNEs) like Harley-Davidson, Rolex, and Starbucks are said to be following an international strategy because

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

Maddox Bauxite Extraction Inc. has decided to enter into a foreign market by setting up its own production facilities and distribution channels from scratch. This will give it strong control over all its business activities. Which of these foreign entry modes will Maddox most likely choose?

Which of the following foreign entry modes primarily involves producing goods in one country to sell in another?

To keep track of the latest developments in computing, Lenovo's research centers are located in China, the United States, and Japan. Also, to benefit from low-cost labor and reduced shipping costs, the company's manufacturing facilities are in Mexico, India, and China. Lenovo's products are the same for its domestic and foreign markets. Which strategy does Lenovo follow?

Using the automotive industry in Germany as an example, explain how competitive intensity in a focal industry affects national competitive advantage.

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

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.

Fierce domestic competition in New Schuyler makes a tough environment for any motorcycle company. Success requires top-notch engineering of chassis and engines, as well as keeping costs and fuel consumption in check. As a result, New Schuyler's motorcycles have a competitive advantage in the global market. According to Porter's diamond framework, this scenario shows the influence of competitive intensity in

Michael Porter's diamond framework explains

Calabash Inc. is located in the nation of West Fenwick near the nation of East Fenwick. Calabash is considering expanding into East Fenwick. Both countries have similar consumer incomes and knowledge bases and share a common language. Also, the transportation networks between the countries are strong. Even so, the two nations have a long-standing dispute concerning the control of an area of land along their common border. Currently, West Fenwick rules this land. Which of the following would most likely prevent Calabash from expanding into East Fenwick?

Blush Bashful Cosmetics Inc. operates in 20 countries around the globe. The company clearly understands that the skin and hair type of customers varies from one country to another. Consequently, its products are customized to suit local needs and preferences of customers, even though the costs incurred while producing these products are exceptionally high. This strategy helps the company behave as a local firm in a foreign market. In this scenario, which of the following strategies does Blush Bashful most likely implement?

When should a firm choose exporting as a foreign entry mode?

Badlands Corp., a tool and die maker, is considering where to locate its new factories and offices. According to the CAGE distance model, which of these countries is statistically most attractive to Badlands?