Question 1

What are core competencies? What are their advantages?

Accepted Answer

The term core competencies refers to ski...

Question 2

Which of the following is most likely to be the advantage of locating a value creation activity in the optimal location for that activity?

Accepted Answer

A)  It increases the costs of value creation.
B)  It decreases consumer surplus.
C)  It helps the firm to achieve a high-cost position.
D)  It nullifies all trade barriers.
E)  It enables a firm to differentiate its product offering from those of competitors.F) B) and C)
G) A) and E)

Question 3

A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a low-cost strategy.

Accepted Answer

A) True 
 B)False

Question 4

What are the sources of economies of scales?

Accepted Answer

Economies of scale have a number of sour...

Question 5

The higher the firm's profit per unit sold is, the greater its profitability will be, all else being equal.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a support activity in the operations of a firm?

Accepted Answer

A)  Research and development
B)  Customer service
C)  Marketing and sales
D)  Creation and maintenance of information systems
E)  ProductionF) C) and E)
G) A) and D)

Question 7

A global car manufacturer wants to start production in China. While catering to local responsiveness, what can the firm do to get scale economies?

Accepted Answer

A)  Increase costs whenever possible.
B)  Use common vehicle platforms and components across many different models.
C)  Shorten the production runs for each component.
D)  Increase the duplication of functions required for each operation.
E)  Manufacture only one type of car and sell it in all the international markets.F) A) and E)
G) B) and E)

Question 8

Discuss the significance of value creation. According to Michael Porter, what are the two primary strategies for creating value?

Accepted Answer

The way to increase the profitability of...

Question 9

Who among the following should be viewed as part of a firm's infrastructure?

Accepted Answer

A)  Procurement manager
B)  Top management
C)  Production manager
D)  Research and development scientist
E)  Marketing personnelF) A) and C)
G) None of the above

Question 10

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) A) and B)
G) A) and C)

Question 11

Which of the following is a part of the organization architecture that consists of the metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits?

Accepted Answer

A)  Reports
B)  Controls
C)  Rewards
D)  Knowledge flows
E)  DominionsF) A) and E)
G) C) and D)

Question 12

Which of the following is true of a localization strategy?

Accepted Answer

A)  It allows a firm to capture the cost reductions of mass-producing a standardized product.
B)  It reduces duplication of functions.
C)  It involves longer production runs.
D)  It makes sense if the value added by customization supports higher pricing.
E)  It substantially reduces local demand.F) B) and C)
G) A) and E)

Question 13

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)

Question 14

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 D)
G) A) and E)

Question 15

Firms that pursue which of the following strategies take products first produced for their domestic market and sell them across various markets with only minimal local customization?

Accepted Answer

A)  Nationalization
B)  Transnational
C)  Global standardization
D)  International
E)  LocalizationF) C) and E)
G) A) and E)

Question 16

Diminishing returns imply that when a firm already has significant value built into its product offering, increasing value by a relatively small amount requires only minimal additional costs.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following refers to systematic reductions in production costs that have been observed to occur over the life of a product?

Accepted Answer

A)  Experience curve
B)  Learning effects
C)  Location economies
D)  Efficiency slope
E)  Economies of scaleF) All of the above
G) None of the above

Question 18

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

Accepted Answer

A)  volume synergies.
B)  economies of scale.
C)  captured savings.
D)  size effects.
E)  location economies.F) A) and C)
G) None of the above

Question 19

According to Michael Porter, superior profitability 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) B) and E)
G) None of the above

Question 20

Which of the following terms best represents the norms and value systems that are shared among the employees of an organization?

Accepted Answer

A)  Process scenario
B)  Organizational structure
C)  Business structure
D)  Organizational culture
E)  Management structureF) D) and E)
G) A) and E)

Exam 12: The Strategy of International Business

A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a low-cost strategy.

Correct AnswerverifiedShow Answer

A global car manufacturer wants to start production in China. While catering to local responsiveness, what can the firm do to get scale economies?

Correct AnswerverifiedShow Answer

The amount of value a firm creates is measured by:

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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 referred to as:

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Which of the following refers to systematic reductions in production costs that have been observed to occur over the life of a product?

Correct AnswerverifiedShow Answer

Which of the following is a support activity in the operations of a firm?

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Which of the following is a part of the organization architecture that consists of the metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits?

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Which of the following is true of a localization strategy?

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

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The higher the firm's profit per unit sold is, the greater its profitability will be, all else being equal.

Correct AnswerverifiedShow Answer

What are the sources of economies of scales?

Correct AnswerverifiedEconomies of scale have a number of sour...View AnswerShow Answer

Discuss the significance of value creation. According to Michael Porter, what are the two primary strategies for creating value?

Correct AnswerverifiedThe way to increase the profitability of...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

Who among the following should be viewed as part of a firm's infrastructure?

Correct AnswerverifiedShow Answer

Which of the following terms best represents the norms and value systems that are shared among the employees of an organization?

Correct AnswerverifiedShow Answer

Diminishing returns imply that when a firm already has significant value built into its product offering, increasing value by a relatively small amount requires only minimal additional costs.

Correct AnswerverifiedShow Answer

Firms that pursue which of the following strategies take products first produced for their domestic market and sell them across various markets with only minimal local customization?

Correct AnswerverifiedShow Answer

Which of the following is most likely to be the advantage of locating a value creation activity in the optimal location for that activity?

Correct AnswerverifiedShow Answer

What are core competencies? What are their advantages?

Correct AnswerverifiedThe term core competencies refers to ski...View AnswerShow Answer

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Economies of scale have a number of sour...
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The way to increase the profitability of...
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The term core competencies refers to ski...
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