Strategic Management and Competitive Advantage, 4e (Barney)
Chapter 11 International Strategies
1) At some level, international strategies have existed since before the beginning of recorded
time.
2) International strategies are actually a special case of business strategies.
3) International strategies are typically limited to just huge multinational companies.
4) The increased use of international strategies by both large and small firms suggests that the
economic opportunities associated with operating in multiple geographic markets can be
substantial.
5) Products and services that a firm sells in its domestic market will always also sell in foreign
markets.
6) The most obvious economy of scope that may motivate firms to pursue an international
strategy is the potential new customers for a firm’s current products or services that such a
strategy might generate.
7) To the extent that customers outside a firm’s domestic market are willing and able to buy a
firm’s current products or services, implementing an international strategy can directly increase a
firm’s revenues.
8) In 2008, about a third of Wal-Mart’s profits came from outside the United States.
9) In 2008, more than 50 percent of General Motor’s automobile’s sales came from outside the
United States.
10) Different physical standards can require a firm pursuing international opportunities to change
its current products or services to sell them into a nondomestic market.
11) Differences in tastes can be a major challenge for firms looking to sell their products or
services outside the domestic market.
12) Different physical standards are more challenging than differences in tastes for firms looking
to sell their products or services outside the domestic market.
13) In order for the basis of an international strategy to attract new customers, those products or
services must address the needs, wants, and preferences of customers in foreign markets at least
as well as, if not better than, alternatives.
14) In some international markets, adequate distribution networks exist but are tied up by new
entrants to these markets.
15) Distribution problems are typically limited to developing economies.
16) Japanese retail distribution has historically been much more fragmented, and much less
efficient, than the system that exists in either the United States or Western Europe.
17) Embargoes are an example of nontariff barriers.
18) Countervailing duties are an example of quotas.
19) Border levies are an example of tariffs.
20) Hard currencies are currencies that are traded, and thus have value, on international money
markets.
21) Because the value of hard currencies can fluctuate in the world economy, firms can manage
their currency risk by engaging in various hedging strategies in world money markets.
22) When international firms engage in countertrade, they receive payment for the products or
services they sell into a country in the form of hard currency.
23) One estimate suggests that countertrade accounts for between 10 and 20 percent of world
trade.
24) Growth is the third stage in the product life cycle.
25) A product or service can be at different stages of its life cycle in different countries.
26) Gaining access to new customers is, perhaps, the most traditional reason why firms begin
international operations.
27) The search for low labor costs has led some firms to engage in an international “race to the
bottom.”
28) One of the most compelling reasons for firms to begin operations outside their domestic
markets is to refine their current core competencies and to develop new core competencies.
29) Learning from international operations is automatic.
30) Unlearning requires a firm to modify or abandon traditional ways of engaging in business.
31) The ability to learn from operations can be helped if managers perceive that there is too
much to be learned.
32) Local responsiveness can help firms be successful in addressing the local needs of
nondomestic customers, thereby increasing demand for a firm’s current products or services.
33) A multinational strategy exploits all the advantages of both international integration and
local responsiveness.
34) Currency fluctuations can significantly affect the value of a firm’s domestic investments.
35) The financial risks can be daunting when a firm first begins international operations.
36) Hedging strategies reduce the business risks that firms assume when they enter into
nondomestic markets.
37) Government upheaval and the attendant risks to international firms are facts of life in some
countries.
38) In a decentralized federation, each country in which the firm operates is organized as a full
profit-and-loss division headed by a division general manager who is typically the president of
the company in a particular country.
39) Firms can maintain traditional arm’s-length market relationship between themselves and their
nondomestic customers and still implement international strategies.
40) In many ways, the transnational structure is similar to the centralized hub.
41) International strategies are an example of ________ strategies.
A) corporate
B) business
C) functional
D) operational
42) Which one of the following is not a potential source of economies of scope for firms
pursuing international strategies?
A) To develop new core competencies
B) To manage corporate risk
C) To control countertrade
D) To gain access to low-cost factors of production
43) Different ________ standards can require a firm pursuing international opportunities to
change its current products or services to sell them into a nondomestic market.
A) financial
B) operational
C) fiscal
D) physical
44) Japanese retail distribution has historically been much more ________ than the system that
exists in the United States or Western Europe.
A) closely held
B) fragmented
C) consolidated
D) open
45) Embargoes are an example of
A) quotas.
B) tariffs.
C) nontariff barriers.
D) subsidies.
46) Countervailing duties are an example of
A) quotas.
B) nontariff barriers acquisition.
C) tariffs.
D) countertrade.
47) Variable levies are an example of
A) quotas.
B) tariffs.
C) nontariff barriers.
D) countertrade.
48) ________ currencies are currencies that are traded, and thus have value, on international
money markets.
A) Soft
B) Variable
C) Operational
D) Hard
49) The second stage in the product life cycle is the ________ stage.
A) introduction
B) growth
C) maturity
D) decline
50) Which one of the following is not a determinant of the ability of a firm to learn from its
international operations?
A) The intent to learn
B) The transparency of business partners
C) Receptivity to learning
D) The resources for learning
51) ________ requires a firm to modify or abandon traditional ways of engaging in business.
A) Unlearning
B) Learning
C) Relearning
D) Absorbing
52) ________ can help firms be successful in addressing the local needs of nondomestic
customers.
A) Globalization
B) Internationalization
C) Target responsiveness
D) Local responsiveness
53) A ________ strategy exploits all the advantages of both international integration and local
responsiveness.
A) corporate
B) multinational
C) transnational
D) global
54) Hedging is a way to counter the ________ risks of doing business in foreign markets.
A) political
B) financial
C) cultural
D) business
55) Broad changes in the political situation in a foreign country is an example of political risk
that affects the international strategies at the ________ level.
A) macro
B) micro
C) functional
D) cultural
56) Improvements in the ________ infrastructure of business is one of the important contributors
to the growth in the number of firms pursuing international strategies.
A) pecuniary
B) cultural
C) technological
D) corporate
57) One survey of CEOs from around the world reported that ________ percent of U.S. CEOs
had no foreign experience.
A) 25
B) 8
C) 42
D) 14
58) The ability to develop detailed local knowledge of nondomestic markets may require firms to
have management teams with a great deal of ________ experience.
A) foreign
B) technical
C) corporate
D) functional
59) One survey indicated that the foreign experience of ________ percent of U.S. CEOs was
limited to vacation travel.
A) 14
B) 56
C) 48
D) 61
60) Even if direct duplication of a firm’s international strategies is ________, ________ might
still exist that limit the ability of that strategy to generate sustained competitive advantages.
A) costly; substitutes
B) inexpensive; substitutes
C) costly; fragmentation
D) inexpensive; fragmentation
61) A firm implements a(n) ________ strategy when it diversifies its business operations across
country boundaries.
A) functional
B) operational
C) international
D) transnational
62) Exporting is a form of
A) intermediate market governance.
B) hierarchical governance.
C) vertical governance.
D) market governance.
63) Which one of the following is an example of the hierarchical governance option for firms
pursuing international strategies?
A) Mergers
B) Exporting
C) Licensing
D) Joint ventures
64) Acquisitions are an example of the ________ governance option for firms pursuing
international strategies.
A) market
B) hierarchical
C) corporate
D) intermediate market
65) Strategic alliances fall within the ________ governance option for firms pursuing
international strategies.
A) corporate
B) market
C) intermediate market
D) hierarchical
66) In a ________, strategic and operational decisions are delegated to divisions/country
companies.
A) transnational structure
B) decentralized federation
C) coordinated federation
D) centralized hub