84) Denim Supply Inc. does not feel the pressure to create custom jeans for any of its markets
around the world, but it does want to focus on cost reductions. What strategy should this company
consider using to achieve this?
A) domestic strategy
B) global standardization strategy
C) international strategy
D) transnational strategy
E) nationalization strategy
85) A(n) ________ focuses on increasing profitability by customizing the firm’s goods or services
so that they provide a good match to tastes and preferences in different national markets.
A) international strategy
B) global standardization strategy
C) localization strategy
D) transnational strategy
E) nationalization strategy
86) A localization strategy should be considered when
A) it allows a firm to capture the cost reductions of mass-producing a standardized product.
B) it reduces duplication of functions.
C) it involves longer production runs.
D) it makes sense if the value added by customization supports higher pricing.
E) it substantially reduces local demand.
87) A global motor vehicle parts manufacturer wants to start production in China. While catering
to local responsiveness, what can the firm do to get scale economies?
A) increase costs whenever possible
B) use common components across many different models
C) shorten the production runs for each component
D) increase the duplication of functions required for each operation
E) manufacture only one type of car and sell it in all the international markets
88) A firm should use a(n) ________ strategy when it simultaneously faces both strong cost
pressures and strong pressures for local responsiveness.
A) global standardization
B) localization
C) international
D) transnational
E) nationalization
89) Researchers Bartlett and Ghoshal noted that in the modern global environment, competition is
so intense that in order to survive, a company must do all they can to
A) ignore factor endowments.
B) provide local responsiveness.
C) create first-mover advantage.
D) increase costs of production.
E) rely on location economies.
90) Firms that pursue a(n) ________ strategy differentiate their product offering across geographic
markets to account for local differences.
A) international
B) global standardization
C) transnational
D) multidomestic
E) nationalization
91) In today’s global marketplace, ________ companies successfully use a transnational strategy.
A) the majority of
B) only service
C) only agricultural
D) more and more
E) very few
92) Firms that pursue a(n) ________ strategy take products first produced for their domestic
market and sell them across various markets with only minimal local customization.
A) nationalization
B) transnational
C) global standardization
D) international
E) localization
93) Xerox had a monopoly on photocopiers for several years as the technology underlying the
photocopier was protected by strong patents. As it served a universal need, this favorable position
led Xerox to pursue a(n)
A) global standardization strategy.
B) localization strategy.
C) international strategy.
D) transnational strategy.
E) nationalization strategy.
94) Denti-Way Systems, a manufacturer of dental appliances, invented and patented a new x-ray
machine that radically reduced maintenance and operational issues. Responding to global demand,
it decided to sell the machines manufactured at its plant in the United States to various markets
across the globe. Since the product features provided by Denti-Way were not provided by any
other competitor, Denti-Way did not feel any pressure for cost reductions. Which strategy is most
likely being pursued by Denti-Way?
A) international
B) localization
C) global standardization
D) transnational
E) nationalization
95) An international strategy is unique in that companies are selling a product that serves universal
needs, but they do not
A) sell to foreign nations.
B) understand local needs.
C) have significant competition.
D) pursue R&D.
E) focus on technology products.
96) A cooperative agreement between potential or actual competitors is called a(n)
A) tactical union.
B) strategic alliance.
C) political affiliation.
D) economic association.
E) nationalization.
97) Frisco Corp. and Farren Industries agreed to a short-term contract in which Frisco Corp. would
develop the software for Farren Industries to use when selling to the international customer. This
short-term agreement is an example of a
A) franchising agreement.
B) global web.
C) free trade agreement.
D) strategic alliance.
E) licensing deal.
98) One disadvantage of a strategic alliance is
A) it is difficult for a firm to enter into a foreign market.
B) the fixed costs of developing new products tend to increase.
C) competitors gain a low-cost route to new technology and markets.
D) a foreign firm tends to face higher trade barriers.
E) it always leads to a loss for either of the firms involved.
99) One of the principal risks associated with a strategic alliance is that
A) it brings together the complementary skills of alliance partners.
B) it makes it difficult for the partner firms to enter into a foreign market.
C) a firm can give away more than it receives.
D) it does not allow firms to share fixed costs.
E) it almost always fails.
100) As the manager of the U.S. branch, Poitr knows it is important to build relationships between
himself and the managers of the branches in Singapore and Dublin. Poitr wants to create
A) relational capital.
B) the Sullivan principle.
C) factor endowments.
D) symbiotics.
E) a first-mover advantage.
101) Discuss the significance of value creation. According to Michael Porter, what are the two
primary strategies for creating value?
102) Describe the difference between support activities and primary activities within a firm.
103) Discuss how marketing and sales help a firm create value.
104) Describe the different ways in which a firm benefits from global expansion.
105) Discuss how core competencies help a firm develop a competitive advantage.
106) What is an experience curve? What is its strategic significance?
107) Explain the value of learning effects and provide examples of industries that benefit from
them.
108) Discuss the different types of competitive pressures that firms competing in a global
marketplace face. How can firms respond to such pressures?
109) Name four sources of pressures for local responsiveness and explain why they create
pressure.
110) Describe a global standardization strategy.
111) Discuss a transnational strategy and explain its role in the global market today.
112) Discuss the biggest drawback to the international strategy and explain how Xerox faced this
challenge.
113) What are strategic alliances?
114) The advantages of strategic alliances are as follows:
115) Explain the three characteristics necessary in a good ally when considering a strategic
alliance.