Chapter Practice

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Chapters 1-7 - Practice
1. High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy: A. global B. multidomestic C. transnational D. overall cost leadership 2. Foreign direct investment includes the following form of entry strategy: A. licensing B. franchising C. joint ventures D. exporting 3. According to Michael Porter, firms that have experienced intense domestic competition are A. unlikely to have the time or resources to compete abroad. B. most likely to design strategies aimed primarily at the domestic market. C. more likely to design strategies and structures that allow them to successfully compete abroad. D. more likely to demand protection from their governments. 4. A domestic corporation considering expanding into international markets for the first time will typically A. start off by implementing a wholly owned foreign subsidiary so it can maintain standards identical to those at home. B. consider licensing or franchising its operations. C. consider implementing a low risk/low control strategy such as exporting. D. form a joint venture with a reputable foreign producer. 5. High pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy: A. global B. multidomestic C. transnational D. differentiation

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6. In order to realize the strongest competitive advantage, firms engaged in worldwide competition must A. require that all of their various business units follow the same strategy regardless of location. B. ensure that all business units follow a strategy strictly tailored to their respective locations. C. pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal results. D. attempt to use the strategy that was most successful in their home country. 7. The form of entry strategy into international operations that offers the lowest level of control would be A. franchising. B. licensing. C. joint venture. D. exporting 8. Microsoft decided to establish a corporate research laboratory in Cambridge, England A. because England is an ally of the United States. B. to access the outstanding technical and professional talent available there so that they can attain worldclass excellence in selected value-creating activities. C. because the local language is English. D. because the company views the United States as a risky place to expand due to the actions of the U.S. Department of Justice. 9. ___________ are most appropriate where a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries. A. Joint ventures B. Strategic alliances C. Licensing agreements D. Wholly owned subsidiaries 10. Software Tech, Inc., a company in the computer software industry, invests heavily in R&D and product design. Thus, most of its value is added A. upstream. B. in its infrastructure. C. downstream. D. midstream.

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11. The reasons that explain why some governments make better use of the inflows from foreign investment and know-how than others include all of the following except A. governmental practices that are business-friendly. B. local entrepreneurs that can train workers and invest in modern technology. C. high tariffs and taxes on foreign investors and multinational corporations provide income to improve living conditions. D. sound management of broader economic factors such as interest rates and inflation. 12. Which of the following is a disadvantage of a transnational strategy? A. less ability to realize cost savings through scale economies B. limited ability to adapt to local markets C. unique managerial challenges in fostering knowledge transfer D. single locations may lead to higher tariffs and transportation costs. 13. Fees that a multinational receives from a foreign licensee in return for its use of intellectual...
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