Question 1

Rivalry is intense in nations with conditions of ________ consumer demand,________ supplier bases,and ________ new entrant potential from related industries.
A) weak; weak; high
B) strong; strong; low
C) weak; weak; low
D) strong; strong; high

Accepted Answer

Rivalry is particularly intense in nations with conditions of strong consumer demand, strong supplier bases, and high new entrant potential from related industries. This competitive rivalry increases the efficiency with which firms develop, market, and distribute products and services within the home country.

Question 2

When the GE wind energy business tapped into world-wide talent,it was able to expand using a(n)________ strategy.
A) focus
B) diversification
C) unrelated
D) generic

Accepted Answer

The importance of international expansion as a viable diversification strategy can be illustrated by GEs wind energy business that benefits by tapping into talent around the world. The firm has built research centers in China, Germany, India, and the U.S. CEO Jeffrey Immelt says that this solution was created in order to access the best brains everywhere in the world. All four centers have played a key role in GEs development of huge 92-ton turbines.

Question 3

In Fortune's annual list of the 500 biggest companies in the world,156 firms were from emerging markets in 2015 compared to 18 in 1996,owing to
A) the lower living standards throughout the world.
B) traditional purchasing habits.
C) a rapid rise in global capitalism.
D) a divergence in world living standards.

Accepted Answer

This rapid rise in global capitalism has had dramatic effects on the growth in different economic zones. For example, the Fortune magazine annual list of the 500 biggest companies in the world included 156 firms from emerging markets in 2015, compared to only 18 in 1995.

Question 4

In Euromoney magazine's 2017 semi-annual "Country Risk Rating" evaluating political,economic,and other risks that entrants to international markets potentially face,which of the following countries has the highest overall country rating for risk?
A) Norway
B) Hong Kong
C) Bahrain
D) Argentina

Accepted Answer

Exhibit 7.2 illustrates a sample of country risk ratings from the August 22, 2017 edition of Euromoney. Argentina and Libya are the highest overall country rating for risk (5), followed by Bahrain (4), Hong Kong (2), and Norway (1).

Question 5

Which of the factors below has not made the software services industry in India extremely competitive on a global scale?
A) large pool of skilled workers
B) large, growing market and sophisticated customers
C) tax and antitrust legislation that protects the dominant players in the industry
D) large network of public and private educational institutions

Accepted Answer

In India, the diamond-of-national-advantage framework for software shows a large pool of skilled workers, a large network of public and private educational institutions, a large, growing market, and sophisticated customers.

Question 6

Which of the following is not a risk normally associated with bottom-of-the-pyramid strategies?
A) A low-end version of a brand may detract from the overall brand attractiveness.
B) The new low-cost products they develop may cannibalize the sales of their core products.
C) Entrenched competitors can impact the ability of the new firm to enter the market successfully.
D) New products may be perceived as exploiting the privileged customer with substandard products.

Accepted Answer

In many developing economies, distributions of income remain much wider than they do in the developed world, leaving many impoverished even as the economies grow. The challenge for multinational firms is to tailor their products and services to meet the needs of the bottom of the pyramid. Global corporations are increasingly changing their product offerings to meet the needs of the nearly 5 billion poor people in the world who inhabit developing countries.

Question 7

The rise of ________ capitalism around the world creates tremendous business opportunities for multinational corporations.
A) social
B) multinational
C) market
D) democratic

Accepted Answer

The rise of globalization (meaning the rise of market capitalism around the world) has undeniably created tremendous business opportunities for multinational corporations. For example, while smartphone sales declined in Western Europe in the third quarter of 2014, they grew at a 50 percent rate in Eastern Europe, the Middle East, and Africa.

Question 8

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
A) different income levels.
B) low income levels.
C) high income levels.
D) steady income levels.

Accepted Answer

One of the challenges with globalization is determining how to meet the needs of customers at very different income levels. In many developing economies, distributions of income remain much wider than they do in the developed world, leaving many impoverished even as the economies grow. The challenge for multinational firms is to tailor their products and services to meet the needs of the bottom of the pyramid.

Question 9

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.
A) habits; values; ideas
B) traditions; legal systems; history
C) money; ideas; information
D) statistics; personnel; purchasing power

Accepted Answer

Globalization is a term that has two meanings:(1) the increase in international exchange, including trade in goods and services as well as exchange of money, ideas, and information; and (2) the growing similarity of laws, rules, norms, values, and ideas across countries.

Question 10

In Euromoney magazine's 2017 semi-annual "Country Risk Rating" evaluating political,economic,and other risks that entrants to international markets potentially face,which of the following countries have the next to the highest country economic risk?
A) South Africa and Russia
B) Singapore and China
C) Argentina and Bahrain
D) Kazakhstan and Colombia

Accepted Answer

Exhibit 7.2 illustrates a sample of country risk ratings from the August 22, 2017 edition of Euromoney. Argentina and Bahrain have a (4) level economic risk. The highest country economic risk is Libya (5).

Question 11

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.
A) divergence
B) convergence
C) expansion
D) contraction

Accepted Answer

Over half of the world output now comes from emerging markets. This is leading to a convergence of living standards across the globe and is changing the face of business.

Question 12

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?
A) U.S. demand conditions
B) factor endowments
C) domestic rivalry
D) domestic demand conditions

Accepted Answer

Although the Indian success cannot be explained in terms of its home-market demand (according to the Porter model), the nature of the industry enables software to be transferred among different locations simultaneously by way of communications links. Thus, competitiveness of markets outside India can be enhanced without a physical presence in those markets.

Question 13

In Euromoney magazine's 2017 semi-annual "Country Risk Rating" evaluating political,economic,and other risks that entrants to international markets potentially face,which of the following countries have the next to the lowest country political risk?
A) Libya and Argentina
B) Singapore and Hong Kong
C) Norway and Canada
D) China and Bahrain

Accepted Answer

Exhibit 7.2 illustrates a sample of country risk ratings from the August 22, 2017 edition of Euromoney. Singapore and Hong Kong have a (2) level economic risk. The highest country political risk is Libya (5).

Question 14

Related industries create the probability that new companies will enter the market.This ________ competition and forces existing firms to improve ________.
A) decreases; innovation
B) decreases; efficiency
C) increases; efficiency
D) decreases; sales

Accepted Answer

Related industries create the probability that new companies will enter the market, increasing competition and forcing existing firms to become more competitive through efforts such as cost control, product innovation, and novel approaches to distribution. Combined, these give the home country industries a source of competitive advantage.

Question 15

According to Michael Porter,firms that have experienced intense domestic competition are
A) unlikely to have the time or resources to compete abroad.
B) more likely to demand protection from their governments.
C) most likely to design strategies aimed primarily at the domestic market.
D) more likely to design strategies that will allow them to successfully compete abroad.

Accepted Answer

Competitive rivalry increases the efficiency with which firms develop, market, and distribute products and services within the home country. This intense rivalry forces firms to look outside their national boundaries for new markets, setting up the conditions necessary for global competitiveness.

Question 16

Which of the following is not a motivation for a company to pursue international expansion?
A) It wishes to increase the size of the potential markets for its products and services.
B) It wishes to take advantage of arbitrage opportunities to increase profit.
C) It wishes to optimize value-chain activities to enhance performance, reduce costs, and reduce risk.
D) It wishes to increase foreign market penetration by developing products for the home market.

Accepted Answer

There are many motivations for a company to pursue international expansion. The most obvious one is to increase the size of potential markets for its products and services. A second reason is that the company can take advantage of arbitrage opportunities. A third reason is that a company wishes to enhance the growth rate of a product that is in its maturity state in the home country. A fourth reason is that the company wishes to benefit from optimizing the physical location for every activity in its value chain. A fifth reason is that possibilities exist for reverse innovation, whereby a company develops new products for emerging markets that have adequate functionality at a low cost and then often are introduced to the home country after successfully penetrating the emerging market.

Question 17

In the Porter diamond-of-national-advantage framework,which of the following factors does not affect competitiveness of a nation?
A) the position of the nation in factors of production necessary to compete in a given industry
B) the presence or absence in the nation of internationally competitive supplier industries
C) the conditions in the nation governing the nature of foreign rivalry
D) the nature of home-market demand of the products or services of the industry

Accepted Answer

Porter concluded that there are four broad attributes of nations that individually, and as a system, constitute what is termed the "diamond of national advantage." In effect, these attributes jointly determine the playing field that each nation establishes and operates for its industries. These factors are:factor endowments, demand condition, related and supporting industries, and firm strategy, structure, and rivalry.

Question 18

Multinational firms are constantly faced with the decision of choosing between ________ adaptation and ________ integration.
A) local; local
B) local; global
C) global; local
D) global; global

Accepted Answer

Multinational firms are constantly faced with many important decisions. These include entry strategies, the dilemma of choosing between local adaptation-in product offerings, locations, advertising, and pricing-global integration, and others.

Question 19

Which of these points on the Porter diamond of national advantage is the strongest indicator of global competitive success?
A) foreign rivalry
B) domestic rivalry
C) global rivalry
D) international rivalry

Accepted Answer

Among all the points on the Porter diamond of national advantage, domestic rivalry is perhaps the strongest indicator of global competitive success. Firms that have experienced intense domestic competition are more likely to have designed strategies and structures that allow them to successfully compete in world markets.

Question 20

Countries with demanding consumers,like environmentally-concerned Denmark,drive ________ to meet the demand.
A) worldwide innovation
B) in-country innovation
C) foreign manufacturing
D) global exchange

Accepted Answer

Consumers who demand highly specific, sophisticated products and services force firms to create innovative, advanced products and services to meet the demand. This consumer pressure presents challenges to a country's industries. But in response to these challenges, improvements to existing goods and services often result, creating conditions necessary for competitive advantage over firms in other countries.

Quiz 7: International Strategy: Creating Value in Global Markets

Rivalry is intense in nations with conditions of consumer demand, supplier bases,and new entrant potential from related industries.

When the GE wind energy business tapped into world-wide talent,it was able to expand using a(n) ________ strategy.

In Fortune's annual list of the 500 biggest companies in the world,156 firms were from emerging markets in 2015 compared to 18 in 1996,owing to

In Euromoney magazine's 2017 semi-annual "Country Risk Rating" evaluating political,economic,and other risks that entrants to international markets potentially face,which of the following countries has the highest overall country rating for risk?

Which of the factors below has not made the software services industry in India extremely competitive on a global scale?

Which of the following is not a risk normally associated with bottom-of-the-pyramid strategies?

The rise of ________ capitalism around the world creates tremendous business opportunities for multinational corporations.

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

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.

In Euromoney magazine's 2017 semi-annual "Country Risk Rating" evaluating political,economic,and other risks that entrants to international markets potentially face,which of the following countries have the next to the highest country economic risk?

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.

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?

In Euromoney magazine's 2017 semi-annual "Country Risk Rating" evaluating political,economic,and other risks that entrants to international markets potentially face,which of the following countries have the next to the lowest country political risk?

Related industries create the probability that new companies will enter the market.This competition and forces existing firms to improve .

According to Michael Porter,firms that have experienced intense domestic competition are

Which of the following is not a motivation for a company to pursue international expansion?

In the Porter diamond-of-national-advantage framework,which of the following factors does not affect competitiveness of a nation?

Multinational firms are constantly faced with the decision of choosing between adaptation and integration.

Which of these points on the Porter diamond of national advantage is the strongest indicator of global competitive success?

Countries with demanding consumers,like environmentally-concerned Denmark,drive ________ to meet the demand.