Version 1 17
A) pressure for cost increases
B) pressure for local responsiveness
C) pressure for value creation
D) pressure for increased profitability
58) Which of the following is true of firms that compete in the global marketplace?
A) They must employ a transnational policy in order to have a competitive edge.
B) Because differentiation across countries can involve significant duplication and a
lack of product standardization, it may raise costs.
C) They must employ adomestic policy in order to have a competitive edge.
D) Because differentiation across countries can involve significant duplication and a
lack of product standardization, it may reduce costs.
59) Universal needs exist when
A) the tastes and preferences of consumers in different nations are similar if not
identical.
B) conventional commodity products requested in one country are different than those
requested in another country.
C) the tastes and preferences of consumers in the same nation are similar if not identical.
D) consumers are willing to pay a high price for a product regardless of what country
they reside in.
60) Pressures for cost reduction are intense in industries where
Version 1 18
A) major competitors are based in high-cost locations.
B) consumers are weak and face high switching costs.
C) there is persistent excess capacity.
D) the company is located in a low-cost location.
61) A multinational firm may need to delegate marketing functions to national subsidiaries to
A) fully implement the firm’s localization strategy.
B) employ economies of scale.
C) meet the requirements for a global standardization strategy.
D) be responsive to local differences in distribution channels.
62) Firms usually respond to pressures for cost reduction by trying to
A) lower the costs of value creation.
B) be locally responsive.
C) undertaking product differentiation.
D) diversifying product lines.
63) Responding to pressure for _____ requires that a firm differentiate its products and
marketing strategy from country to country, even though it may raise costs.
A) cost reductions
B) experience effects
C) lowering the costs of value creation
D) being locally responsive
Version 1 19
64) _____ needs exist when the tastes and preferences of consumers in different nations are
similar if not identical.
A) Universal
B) Homogenous
C) Basic
D) Bundled
65) When AMD sells its computer chips in countries across the world, it doesn’t need to
worry too much about customizing the product to local needs and preferences because computer
chips are ________ needs.
A) universal
B) homogenous
C) basic
D) single-user
66) Pressures for _____ imply that it may not be possible for a firm to realize the full benefits
from economies of scale, learning effects, and location economies.
A) local responsiveness
B) profitability
C) value creation
D) global standardization
67) When a firm focuses on increasing profitability by customizing the product or service so
that it provides a good match to tastes and preferences in different national markets, the firm is
following _____ strategy.
Version 1 20
A) a transnational
B) a localization
C) an international
D) a global standardization
68) When the firm simultaneously faces both strong cost pressures and strong pressures for
local responsiveness, the ideal strategy to follow is the _____ strategy.
A) global standardization
B) localization
C) transnational
D) international
69) _____ strategy makes most sense when demands for local responsiveness are high, but
cost pressures are moderate or low.
A) A global standardization
B) A transnational
C) An international
D) A localization
70) The distinguishing feature of many firms that pursue _____ strategy is that they are
selling a product that serves universal needs, but they do not face significant competitors.
A) an international
B) a localization
C) a transnational
D) a global standardization
Version 1 21
71) According to researchers Bartlett and Ghoshal, for transnational enterprises to be
successful, they must focus on
A) selling a product that serves universal needs.
B) leveraging subsidiary skills.
C) 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.
D) ensuring that the flow of skills from the home country to the foreign subsidiaries is
one way and uninterrupted.
72) When a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale,
the firm should follow _____ strategy.
A) a global standardization
B) a localization
C) an international
D) a customization
73) Which of the following is associated with firms following the global standardization
strategy?
A) high pressures for local responsiveness
B) cost advantage used to support aggressive pricing in world markets
C) low pressures for cost reductions
D) product offering and marketing strategy customized to local conditions
74) _____ strategy is most appropriate when there are substantial differences across nations
with regard to consumer tastes and preferences, and where cost pressures are not too intense.
Version 1 22
A) Localization
B) Transnational
C) Global standardization
D) International
75) What strategy focuses on increasing profitability by customizing the firm’s goods or
services so they provide a good match to tastes and preferences in different national markets?
A) global standardization strategy
B) transnational strategy
C) localization strategy
D) international strategy
76) What is a disadvantage of the localization strategy?
A) a decrease in the value of the product in the local market
B) some duplication of functions
C) an inability to accommodate varying tastes and preferences in different markets
D) reduced customization
77) A firm that is facing both strong cost pressures and strong pressures for local
responsiveness should follow _____ strategy.
A) a localization
B) a global standardization
C) an international
D) a transnational
Version 1 23
78) A firm that is pursuing _____ strategy is simultaneously trying to achieve low costs
through location economies, economies of scale, and learning effects; and trying to differentiate
its product offering across geographic markets.
A) a global customization
B) an international
C) a localization
D) a transnational
79) A firm facing low pressures for cost reductions and low pressures for local
responsiveness is most likely to follow _____ strategy.
A) a global standardization
B) a localization
C) an international
D) a transnational
80) For firms selling a product that serves universal needs but not facing significant
competition, _____ strategy makes sense.
A) a localization
B) an international
C) a transnational
D) a global standardization
81) Which of the following is true of the international strategy?
Version 1 24
A) Product development tends to be highly decentralized.
B) Manufacturing and marketing are typically located in the headquarters location.
C) Extensive production customization is common.
D) The strategy is not viable in the long term.
82) _____ strategy customizes the product offering to local demands and increases the value
of that product in the local market.
A) A transnational
B) A global standardization
C) An international
D) A localization
83) A firm’s strategy can be defined as the actions that managers take to attain the goals of
the firm.
⊚ true
⊚ false
84) The preeminent strategic goal for most firms is to maximize the value of the firm for its
owners and shareholders.
⊚ true
⊚ false
85) The customer is able to receive 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.
Version 1 25
⊚ true
⊚ false
86) 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.
⊚ true
⊚ false
87) For a firm, all positions on the efficiency frontier are viable.
⊚ true
⊚ false
88) Support activities are always less important than the primary activities in achieving a
competitive advantage.
⊚ true
⊚ false
89) 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.
⊚ true
⊚ false
90) The skills within the firm that a competitor cannot easily match or imitate are known as
the core knowledge base.
⊚ true
⊚ false
Version 1 26
91) Systematic increases in sales that have been observed to occur over the life of the product
are referred to as the experience curve.
⊚ true
⊚ false
92) One of the sources of economies of scale is the ability to spread fixed costs over a small
volume.
⊚ true
⊚ false
93) Once a firm has established a low-cost position, it can act as a barrier to new competition.
⊚ true
⊚ false
94) In a multinational enterprise, skills are primarily generated at the home location and are
then dispersed to the rest of the organization.
⊚ true
⊚ false
95) To leverage subsidiary skills, companies should establish incentive systems that
encourage local employees to acquire new skills.
⊚ true
⊚ false
Version 1 27
96) Universal needs exist when the tastes and preferences of consumers in different nations
are similar if not identical.
⊚ true
⊚ false
97) When consumer tastes and preferences differ significantly between countries, there is low
pressure for local responsiveness.
⊚ true
⊚ false
98) Threats of protectionism, economic nationalism, and local content rules dictate that
international businesses manufacture locally.
⊚ true
⊚ false
99) Pursuing a global standardization strategy is appropriate when a firm is facing low
pressures for cost reduction but high pressure for local responsiveness.
⊚ true
⊚ false
100) 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.
⊚ true
⊚ false
Version 1 28
101) Research has shown that in the modern multinational enterprise, core competencies and
skills typically reside in the home country.
⊚ true
⊚ false
102) Enterprises that pursue an international strategy tend to decentralize control over
marketing and product strategies.
⊚ true
⊚ false
Answer Key
Test name: chapter 13
Version 1 32