Question 1

Which of the following is true of a transnational strategy?

Accepted Answer

A)   It is easy to implement because it does not place any conflicting demands on a company.
B)   It is used when the pressures for cost reductions are low.
C)   It is usually used when the pressure for local responsiveness is relatively low.
D)   It enables the one-way flow of core competencies.
E)   It is used by firms that try to achieve low costs through location economies, economies of scale, and learning effects.F) A) and E)
G) A) and D) E

Question 2

The price a firm charges for a good or service is typically more than the value placed on that good or service by the customer.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following strategies is most likely to pursued by a firm when there are strong pressures for cost reductions and demands for local responsiveness are minimal?

Accepted Answer

A)   Domestic strategy
B)   Global standardization strategy
C)   International strategy
D)   Transnational strategy
E)   Nationalization strategyF) B) and E)
G) A) and B)

Question 4

The amount of value a firm creates is measured by:

Accepted Answer

A)   the difference between the previous year's profitability and the current year's profitability.
B)   dividing the market price of its products by the price that customers are actually willing to pay.
C)   the difference between its costs of production and the value that consumers perceive in its products.
D)   dividing the net profits of the firm by total invested capital.
E)   the sum of the profitability of the last two fiscal years.F) A) and B)
G) A) and C) C

Question 5

Superior value creation relative to rivals requires that the firm:

Accepted Answer

A)   creates similar products as its competitors so that consumers do not have to pay a premium price.
B)   has the highest cost structure in the industry.
C)   creates the least valuable product in the eyes of consumers.
D)   ensures that the gap between value and cost of production is greater than the gap attained by competitors.
E)   drives up the cost structure of its business.F) A) and B)
G) B) and E)

Question 6

Of all the value creation activities in a firm,_____ create(s) value by discovering consumer needs and communicating them back to the R&D function of the company,which can then design products that better match those needs.

Accepted Answer

A)   production
B)   marketing and sales
C)   human resources
D)   logistics
E)   information systemsF) C) and D)
G) B) and D) B

Question 7

The price that reflects an individual's assessment of the value of a product is referred to as:

Accepted Answer

A)   the market price.
B)   the customer's negotiated price.
C)   the base value of the product.
D)   the customer's reservation price.
E)   the profit growth price.F) A) and B)
G) A) and E)

Question 8

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) _____ strategy.

Accepted Answer

A)   global standardization
B)   localization
C)   international
D)   transnational
E)   nationalizationF) C) and D)
G) B) and C)

Question 9

Typically,the price a firm charges for a good or service is:

Accepted Answer

A)   less than the value placed on that good or service by the customer.
B)   more than what customers assume it would be.
C)   more than the market price for similar goods or services.
D)   the same as the value placed on that good or service by the customer.
E)   less than the lowest priced similar good or service in the market.F) A) and C)
G) B) and E)

Question 10

According to Michael Porter,all positions on the efficiency frontier are viable.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is true about an international strategy?

Accepted Answer

A)   International strategy typically involves taking products first produced for foreign markets and then customizing them for domestic markets.
B)   International strategy should be pursued by a firm if it manufactures a product that satisfies local, rather than universal, needs.
C)   When a firm pursues an international strategy, the head office of the firm retains fairly tight control over marketing and product strategy.
D)   Firms pursuing the international strategy tend to outsource their development functions such as R&D.
E)   International strategy should be pursued by a firm only if it faces strong competition in foreign markets.F) B) and C)
G) A) and E)

Question 12

Spreading fixed costs over a large volume results in a cost-savings phenomenon which is referred to as:

Accepted Answer

A)   volume synergies.
B)   economies of scale.
C)   captured savings.
D)   size effects.
E)   location economies.F) D) and E)
G) All of the above

Question 13

What are strategic alliances?

Accepted Answer

Strategic alliances are cooperative agre...

Question 14

What is an experience curve? What is its strategic significance?

Accepted Answer

The experience curve refers to systemati...

Question 15

If a value creation activity of a firm can take place in Mexico most effectively,then that activity of the firm must be based in Mexico.Firms that pursue such a strategy are most likely to realize:

Accepted Answer

A)   a position inside the efficiency frontier.
B)   the experience curve.
C)   economies of scale.
D)   location economies.
E)   demographic advantages.F) A) and C)
G) B) and D)

Question 16

According to Michael Porter,superior portability goes to a firm that:

Accepted Answer

A)   creates similar products as their competitors.
B)   keeps the gap between value and cost of production smaller than the gap attained by competitors.
C)   drives down the cost structure of its business.
D)   has the highest cost structure in the industry.
E)   has the least valuable product in the industry.F) C) and D)
G) B) and E)

Question 17

The ability to spread fixed costs over a large volume is one of the sources of economies of scale.

Accepted Answer

A) True 
 B)False

Question 18

In terms of attaining a competitive advantage,support activities can be as important as the primary activities of the firm.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is true of the efficiency frontier?

Accepted Answer

A)   To maximize its profitability, a firm should avoid a position that lies on the efficiency frontier.
B)   Not all positions on the efficiency frontier are viable.
C)   The efficiency frontier is a function of the cost and revenue of a product.
D)   Positions inside the frontier are more efficient than the positions that are located on the frontier.
E)   It is always concave in shape because of diminishing returns.F) A) and B)
G) B) and D)

Question 20

Serving a global market from a single location is consistent with:

Accepted Answer

A)   establishing a high-cost position.
B)   taking advantage of location economies.
C)   moving down the experience curve.
D)   operating from a position which falls inside the efficiency frontier.
E)   going up the global web.F) A) and B)
G) B) and D)

Exam 12: The Strategy of International Business

Which of the following is true of a transnational strategy?

Correct AnswerverifiedE

The price a firm charges for a good or service is typically more than the value placed on that good or service by the customer.

Correct AnswerverifiedShow Answer

Which of the following strategies is most likely to pursued by a firm when there are strong pressures for cost reductions and demands for local responsiveness are minimal?

Correct AnswerverifiedShow Answer

The amount of value a firm creates is measured by:

Correct AnswerverifiedC

Superior value creation relative to rivals requires that the firm:

Correct AnswerverifiedShow Answer

Of all the value creation activities in a firm,_____ create(s) value by discovering consumer needs and communicating them back to the R&D function of the company,which can then design products that better match those needs.

Correct AnswerverifiedB

The price that reflects an individual's assessment of the value of a product is referred to as:

Correct AnswerverifiedShow Answer

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) _____ strategy.

Correct AnswerverifiedShow Answer

Typically,the price a firm charges for a good or service is:

Correct AnswerverifiedShow Answer

According to Michael Porter,all positions on the efficiency frontier are viable.

Correct AnswerverifiedShow Answer

Which of the following statements is true about an international strategy?

Correct AnswerverifiedShow Answer

Spreading fixed costs over a large volume results in a cost-savings phenomenon which is referred to as:

Correct AnswerverifiedShow Answer

What are strategic alliances?

Correct AnswerverifiedStrategic alliances are cooperative agre...View AnswerShow Answer

What is an experience curve? What is its strategic significance?

Correct AnswerverifiedThe experience curve refers to systemati...View AnswerShow Answer

If a value creation activity of a firm can take place in Mexico most effectively,then that activity of the firm must be based in Mexico.Firms that pursue such a strategy are most likely to realize:

Correct AnswerverifiedShow Answer

According to Michael Porter,superior portability goes to a firm that:

Correct AnswerverifiedShow Answer

The ability to spread fixed costs over a large volume is one of the sources of economies of scale.

Correct AnswerverifiedShow Answer

In terms of attaining a competitive advantage,support activities can be as important as the primary activities of the firm.

Correct AnswerverifiedShow Answer

Which of the following statements is true of the efficiency frontier?

Correct AnswerverifiedShow Answer

Serving a global market from a single location is consistent with:

Correct AnswerverifiedShow Answer

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E

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C

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B

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Strategic alliances are cooperative agre...
View Answer

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The experience curve refers to systemati...
View Answer

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