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63.
Typically, the least risky method of entry into a foreign market is through the establishment of a wholly
owned foreign subsidiary so that the parent organization can maintain a high level of control.
64.
Exporting is an expensive way to enter foreign markets.
65.
When considering the exporting decision, companies should consider that the ability to tailor their
products to meet local market needs typically is very limited.
66.
When considering the export decision, firms should not partner with local distributors because many
foreign markets are nationally regulated.
67.
Licensing is a contractual arrangement that involves a long period of time and includes factors such as
monitoring of operations, training, and advertising.
68.
In international markets, a disadvantage of licensing is that the firm granting a license incurs little risk,
since it does not have to invest any significant resources into the country itself.
69.
Wholly owned subsidiaries are least appropriate where a firm already has the appropriate knowledge
and capabilities that it can leverage rather easily through multiple locations.
70.
Wholly owned subsidiaries are typically the most expensive and risky entry mode. The risk is shared,
however, with the company partners.
Multiple Choice Questions
71.
Which of the following is not a risk normally associated with Bottom of the Pyramid strategies?
72.
Multinational firms are constantly faced with the dilemma of choosing between _______ and
__________.
73.
The rise of _________ capitalism around the world creates tremendous business opportunities for
multinational corporations.
74.
According to Exhibit 7.1 in the textbook, the country experiencing the highest rate of growth in GDP
from 2001-2011 was
75.
According to Exhibit 7.1 in the textbook, the country experiencing the lowest rate of growth in GDP
from 2001-2011 was
76.
Globalization opens the doors for companies to attract new customers. One of the challenges is to
determine how to meet the needs of these customers who have
77.
The trade among nations has increased dramatically in recent years, and it is estimated that by 2015 the
trade ________ nations will exceed the trade _______ nations.
78.
When the GE wind energy business tapped into world-wide talent, it was able to expand using a(n)
_________________ strategy.
79.
Statistics indicate that over half of the world output now comes from emerging markets. This is leading
to a(n) ___________ of living standards across the globe and is changing the face of business.
80.
According to the textbook, globalization involves international exchange. Included in this exchange is
trade in goods and services as well as the exchange of __________, __________, and _________ across
countries.
81.
In the Porter Diamond of National Advantage framework, which of the following factors does not affect
nation competitiveness?
82.
Rivalry is intense in nations with conditions of __________ consumer demand, __________ supplier
bases, and __________ new entrant potential from related industries.
83.
According to Michael Porter, firms that have experienced intense domestic competition are
84.
Which of the factors below has not made the software services industry in India extremely competitive
on a global scale?
85.
In reviewing the Indian Software industry and the diamond of national advantage, which of the
following is a growing detractor to the national competitive advantage in this industry?
86.
In reviewing the Indian Software industry and the diamond of national advantage, which of the
following is a growing detractor to the national competitive advantage in this industry?
87.
In reviewing the Indian Software industry and the diamond of national advantage, which of the
following is a relatively weak set of factors in the national competitive advantage in this industry?
88.
Countries with demanding consumers, like environmentally-concerned Denmark, drive __________ to
meet the demand.
89.
Related industries create the probability that new companies will enter the market. This ________
competition and forces existing firms to improve ___________.
90.
Which of these points on the Porter diamond of national advantage is the strongest indicator of global
competitive success?
91.
Which of the following is not a motivation for a company to pursue international expansion?
92.
If a company is considering optimizing the physical location for every activity in the value chain, which
of the following is not a possible strategic advantage for that decision?
93.
The sale of Boeing commercial aircraft and Microsoft operating systems in many countries enables
these companies to benefit from
94.
If the U.S. dollar appreciates relative to foreign currency, what is likely to be the result for the U.S.
company that has branches abroad?
95.
__________ occurs when a firm decides to utilize other firms to perform value-creating activities that
were previously performed in-house.
96.
In considering the decision to offshore, which of the following generally is not one of the hidden costs?
97.
L'Oreal acquired two U.S. firms that developed and sold hair care products to African-American
customers. This permitted it to build a new ethnic hair care division in Europe and Africa. This
represents an advantage of international expansion using ____________.
98.
GE Healthcare developed a portable, inexpensive ultrasound device for the emerging Chinese market. It
expects to sell the device in the United States at a price cheap enough for every physician, paramedic,
and emergency room nurse to purchase. This is an example of
99.
Sources of political risk do not include
100.
For years O.R.T. Technologies resisted moving any operations outside Israel. However, when faced
with a sharp rise in the value of the shekel, the maker of specialized software for managing gas stations
froze all local hiring and decided to transfer some developmental work to Eastern Europe. This is an
example of _____________ risk.
101.
A report issued by the World Trade Organization described the production of a particular U.S. car. The
study showed that 30 percent of the car value goes to Korea for assembly, 17.5 percent to Japan for
components and advanced technology, 7.5 percent to Germany for design, 4 percent to Taiwan and
Singapore for minor parts, 2.5 percent to U.K. for advertising and marketing services, and 1.5 percent to
Ireland and Barbados for data processing. This is an example of
