International Business, 12e (Hill)
1) A firm’s strategy can be defined as the actions that managers take to attain the goals of the firm.
2) The preeminent strategic goal for most firms is to maximize the value of the firm for its owners
and shareholders.
3) 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.
4) 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.
5) For a firm, all positions on the efficiency frontier are viable.
6) Support activities are always less important than the primary activities in achieving a
competitive advantage.
7) 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.
8) The skills within the firm that a competitor cannot easily match or imitate are known as the core
knowledge base.
9) Systematic increases in sales that have been observed to occur over the life of the product are
referred to as the experience curve.
10) One of the sources of economies of scale is the ability to spread fixed costs over a small
volume.
11) Once a firm has established a low-cost position, it can act as a barrier to new competition.
12) In a multinational enterprise, skills are typically generated at the home location and are then
dispersed to the rest of the organization.
13) To leverage subsidiary skills, companies should establish incentive systems that encourage
local employees to acquire new skills.
14) Universal needs exist when the tastes and preferences of consumers in different nations are
similar if not identical.
15) When consumer tastes and preferences differ significantly between countries, there is low
pressure for local responsiveness.
16) Threats of protectionism, economic nationalism, and local content rules dictate that
international businesses manufacture locally.
17) Pursuing a global standardization strategy is appropriate when a firm is facing low pressures
for cost reduction but high pressure for local responsiveness.
18) 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.
19) Research has shown that in the modern multinational enterprise, core competencies and skills
typically reside in the home country.
20) Enterprises that pursue an international strategy tend to decentralize control over marketing
and product strategies.
21) ________ is measured by the percentage increase in net profits over time.
A) Profit growth
B) Value
C) Profitability
D) Operational economy
22) The amount of value a firm creates is measured by the
A) economies of scale they are able to achieve.
B) difference between its costs of production and the value that consumers perceive in its products.
C) profitability the firm achieves.
D) difference between its costs of production and the price that it charges for its products.
23) The ________ all of the different positions that a firm can adopt with regard to adding value to
the product and low cost assuming that its internal operations are configured efficiently to support
a particular position.
A) economies of scale are
B) diminishing returns imply
C) efficiency frontier shows
D) value creation scale shows
24) The strategy, operations, and organization of a firm must all be consistent with each other if the
firm is to ________ and achieve superior profitability.
A) exploit core competencies
B) attain a comparative advantage
C) experience a learning curve
D) attain a competitive advantage
25) ________ include the design, creation, and delivery of a product.
A) Primary activities
B) Core competencies
C) Support activities
D) Universal needs
26) Research and development, production, marketing and sales, and customer service are all
examples of
A) core competencies.
B) primary activities.
C) value creation.
D) secondary activities.