Question 1

The two phenomena that help explain the experience curve are:

Accepted Answer

The experience curve is based on the idea that as production volume increases, the cost per unit decreases due to learning effects (workers become more efficient and skilled as they gain experience) and economies of scale (spreading fixed costs over a larger output).

Question 2

Which strategy makes the most sense when there are strong pressures for cost reductions and demands for local responsiveness are minimal?

Accepted Answer

When there are strong pressures for cost reductions and demands for local responsiveness are minimal, the global standardisation strategy makes the most sense. This strategy involves offering standardized products or services to a global market, often using a centralized and standardized production process to achieve cost savings. As local responsiveness is not a priority, there is no need to customize the products or services to fit local preferences or requirements. This strategy is best suited for companies that are looking to achieve economies of scale by producing in large volumes and selling to a large, global market.

Question 3

Pressure for local responsiveness arises from differences in ______________.

Accepted Answer

Differences in infrastructure and traditional practices can vary greatly between countries and regions, leading to a need for local responsiveness in order to succeed in the market. This can include differences in language, cultural norms, and other factors that affect the way business is conducted in different parts of the world. While governmental demands can also contribute to the need for local responsiveness, it is not the only factor and is not as broad as differences in infrastructure and traditional practices. Distribution channels and boundary-less preferences may also vary between countries, but they are not as significant as cultural and infrastructural differences.

Question 4

Value chain activities can be categorised as:

Accepted Answer

The correct categorisation of value chain activities is primary activities and support activities. Primary activities consist of inbound logistics, operations, outbound logistics, marketing and sales, and service. Support activities include procurement, technology development, human resource management, and infrastructure. These categories are widely accepted and used in literature and practice.

Question 5

Threats of protectionism,economic nationalism and local content rules:

Accepted Answer

The answer of Threats of protectionism,economic nationalism and local content...

Question 6

Firms that compete in the global marketplace typically face two types of competitive pressures.They face pressures for cost reductions and:

Accepted Answer

Global firms face pressures for cost reductions as they must keep their prices competitive in the global market. However, they also face pressures to be locally responsive, as different regions and cultures have unique preferences and regulations. Thus, firms must balance the need for cost reductions with the need for tailoring their products and services to local markets. Pressures for volume increases and price reductions are related to cost reductions and may not always be applicable. Political savvy may be important in some cases, but it is not a primary competitive pressure.

Question 7

Skills within the firm that competitors cannot easily match or imitate are referred to as:

Accepted Answer

Core competencies are unique skills or abilities that a firm possesses that its competitors cannot easily replicate or imitate. These competencies give the firm a competitive advantage and are often a result of the firm's experience, knowledge, or resources.

Question 8

In North America,consumer electrical systems are based on 110 volts,while in Australia,240-volt systems are standard.This is an example of differences in:

Accepted Answer

The difference in electrical systems between North America (110 volts) and Australia (240 volts) is due to infrastructure and traditional practices. In the past, different countries developed their electrical systems using different voltages based on their infrastructure and resources. The difference in electrical systems is not related to consumer tastes and preferences, distribution channels, or governmental demands.

Question 9

The text explains leveraging of products and markets to mean:

Accepted Answer

Leveraging of products and markets refers to utilizing the expertise and strengths of a company's core competencies to expand and grow in new markets or with new products.

Question 10

Pressures for ____________ that it may not be possible for a firm to realise the full benefits from experience curve and location economies.

Accepted Answer

The concept of local responsiveness suggests that firms must adapt their products and services to meet the unique needs and preferences of customers in different markets. This can create pressures that may limit a firm's ability to fully realize the benefits of experience curve and location economies, which are focused on achieving cost efficiencies through standardization and concentration of operations in one or a few locations. Government approval, consumer guidance, and national recognition are not directly related to the challenges of achieving experience curve and location economies.

Question 11

Implicit in the discussion of leveraging core competencies is the idea that skills are developed first _________ and then transferred _________.

Accepted Answer

The concept of leveraging core competencies suggests that skills are first developed at the domestic level (at home) and then transferred to foreign operations. This allows a company to use its unique strengths and capabilities in different markets, rather than trying to develop new skills from scratch in each location. Therefore, option B is the best choice.

Question 12

A strategy that focuses primarily on lowering costs is referred to as a _________ strategy,while a strategy that focuses primarily on increasing the attractiveness of a product is referred to as a _________ strategy.

Accepted Answer

A strategy that focuses on lowering costs is a low-cost strategy, while a strategy that focuses on increasing the attractiveness of a product is a differentiation strategy. Therefore, the best choice is D, low-cost strategy and differentiation strategy.

Question 13

Cost-reduction pressures tend to be particularly intense in industries that:

Accepted Answer

Industries that create products serving universal needs face intense cost-reduction pressures because they compete on price in global markets where differentiation is minimal.

Question 14

For superior performance to be achieved,a firm's strategic fit comprise:

Accepted Answer

Strategic fit involves aligning a firm's strategy with market conditions, ensuring that operations and organizational structure support the strategy for superior performance.

Question 15

The ability to spread fixed costs over a large volume results in a cost-savings phenomenon referred to as:

Accepted Answer

The phenomenon referred to here is economies of scale, which is the cost advantage that arises from increased production output. As the volume of production increases, the fixed costs can be spread over a larger volume, resulting in a decrease in the unit cost of production.

Question 16

Location economies are important because locating in an optimal location can:

Accepted Answer

Location economies can lead to both cost savings and value creation. By locating in an optimal location, a firm can take advantage of lower costs of production (e.g. cheaper labor, materials, and energy) as well as benefit from the advantages of being close to suppliers, customers, transportation hubs, and other key resources. This can result in lower costs and better value proposition for customers, leading to competitive advantages and higher profitability. The answer is not D as competitors moving in is not a direct consequence of location economies, but rather a competitive response to market opportunities and challenges.

Question 17

The appropriateness of the strategy that a firm uses in an international market varies with the extent of pressures for ____________d ________________.

Accepted Answer

The appropriateness of the strategy that a firm uses in an international market varies with the extent of pressures for cost reductions and local responsiveness. Cost reductions refer to the need for a firm to lower its production or operational costs to remain competitive in the international market. Local responsiveness refers to the need for a firm to tailor its products or services to the unique preferences and demands of local customers in each international market. Therefore, a firm's international strategy should balance these two pressures - the need for cost reductions and the need for local responsiveness - to achieve success in international markets.

Question 18

In the context of value chain analysis,which of the following is an example of a 'primary' activity?

Accepted Answer

The answer of In the context of value chain analysis,which...

Question 19

Firms use four basic strategies to compete in the international environment.These are:

Accepted Answer

The four basic strategies that firms use to compete in the international environment are international strategy, localization strategy, global strategy, and transnational strategy. Choice A correctly identifies these four strategies. Choice B and choice C are not accurate descriptions of the strategies used by firms in the international environment. Choice D is similar to the correct answer but fails to include the transnational strategy. Therefore, choice A is the best option in terms of accuracy and completeness.

Question 20

The ____________efers to the systematic reduction in production costs that have been observed to occur over the life of a product.

Accepted Answer

The systematic reduction in production costs that occur over the life of a product is commonly known as the experience curve. This reduction occurs due to various factors such as economies of scale, technological advancements, process improvements, and learning effects. As organizations gain experience in producing a product, they become more efficient and effective, leading to lower costs and higher profitability. Therefore, option A is the correct answer. The other options do not relate to the concept of the experience curve.

Quiz 10: The Strategy of International Business