Strategies for Competing in International Markets Answer Key Part 3

41. In which of the following circumstances is it not advantageous for a multinational competitor to concentrate its activities in a limited number of locations in order to build competitive advantage? A. When the costs of performing certain value chain activities are significantly lower in certain geographic locations than in others B. When a company has competitively superior patented technology that it can license to foreign partners C. When there is a steep learning or experience curve associated with performing an activity in a single location D. When certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages E. When there are significant scale economies in performing the activity 42. Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous A. when high transportation costs make it expensive to operate from central locations. B. whenever buyer-related activities are best performed in locations close to buyers. C. if diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations. D. when it is desirable to hedge against (1) the risks of fluctuating exchange rates (such risks are greater when activities are concentrated in a single location) or (2) supply interruptions (due to strikes, mechanical failures, or transportation delays) or (3) adverse political developments. E. All of these. 43. Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous when A. buyer-related activities (such as sales, advertising, after-sale service and technical assistance) need to take place close to buyers. B. high transportation costs make it uneconomical to operate from one or just a few locations. C. it helps hedge against the risks of exchange rate fluctuations, supply disruptions, and adverse political developments. D. there are diseconomies of scale in trying to operate from a single location. E. All of these. 44. Cross-border coordination contributes to a competitive advantage for a global competitor by A. allowing production to be shifted from country to country to take advantage of exchange rate fluctuations, energy costs, wage rates, or changes in tariffs and quotas. B. allowing knowledge gained in one location to be transferred to operations in other countries. C. shifting workloads from where they are unusually heavy to locations were personnel are underutilized. D. accelerating product development and enhancing innovation by globally linking and coordinating the scattered R&D departments of a multinational company. E. All of these. 45. The ability of a multinational or global competitor to shift production from country to country to take advantage of exchange rate fluctuations, energy costs, wage rates, or changes in tariffs is an example of A. a profit sanctuary. B. cross-border coordination. C. an international strategic alliance. D. cross-market subsidization. E. cross-market differences in cultural, demographic, and market conditions. 46. Companies racing for global market leadership A. generally have to consider establishing competitive positions in the markets of emerging countries. B. are well advised to avoid all the risks and problems of competing in emerging country markets. C. seldom have the resource capabilities it takes to be effective in competing in emerging country markets and usually are at a strong competitive disadvantage to the domestic market leaders. D. can usually be expected to earn sizable profits quickly in emerging country markets. E. usually encounter very low barriers in entering the markets of emerging countries. 47. Which of the following is not a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets? A. Prepare to compete on the basis of low price B. Be prepared to modify aspects of the company's business model to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding) C. Try to change the local market to better match the way the company does business elsewhere D. Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly E. Stay away from those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances 48. One of the most viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets includes A. try to change the local market to better match the way the company does business elsewhere. B. be prepared to modify aspects of the company's business model to accommodate local circumstances. C. prepare to compete on the basis of low price. D. stay away from those emerging markets where it is impractical to modify the company's business model to accommodate local circumstances. E. All of these. Short Answer Questions 49. Briefly identify the major reasons a company may choose to expand outside its domestic market. Answer may vary 50. What are the primary country differences that shape strategy choices in international markets? Answer may vary 51. Identify and briefly describe any three of the five strategic options for entering foreign markets. Answer may vary 52. Briefly discuss why a domestic company desirous of entering foreign markets might see attractive advantages in forming strategic alliances with foreign companies. Answer may vary 53. What are the possible benefits and risks of using strategic alliances to try to enhance a company's ability to compete in foreign markets? Answer may vary 54. Discuss in some detail the difference between a localized multidomestic strategy and a global strategy and give the pros and cons of each. Answer may vary 55. What circumstances call for use of a multidomestic strategy for competing in international markets? Answer may vary 56. When is a global strategy "superior" to a multidomestic strategy? Answer may vary 57. A global strategy embraces the theme "think global, act global" whereas a multidomestic strategy relies more on a "think global, act local" mentality. True or false? Explain. Answer may vary 58. Explain the differences between a "think global, act global" strategy and a "think global, act local" strategy. Answer may vary 59. Explain what circumstances make it necessary for a multinational company to concentrate internal processes in a few locations. Answer may vary 60. Under what circumstances is it advantageous for a company competing in foreign markets to disperse certain internal processes across many countries? Answer may vary 61. Explain the importance of competing in emerging markets. Answer may vary 62. List and discuss three strategy options for competing in emerging markets. Answer may vary