Question 1

Which of the following is most likely a disadvantage to firms who use exporting as an entry strategy?

Accepted Answer

A)  high cost of foreign market entry 
B)  difficulties withdrawing from foreign markets 
C)  The firm must acquire and dedicate capabilities to conduct complex transactions, which can strain organizational resources. 
D)  high risk due to uncertainty in the political environment of the foreign market 
A)  high cost of foreign market entry 
B)  difficulties withdrawing from foreign markets 
C)  The firm must acquire and dedicate capabilities to conduct complex transactions, which can strain organizational resources. 
D)  high risk due to uncertainty in the political environment of the foreign market

Question 2

Focal firms that internationalize through exporting will most likely perform ________ in the home market.

Accepted Answer

A)  sales 
B)  distribution 
C)  marketing 
D)  manufacturing 
A)  sales 
B)  distribution 
C)  marketing 
D)  manufacturing

Question 3

Given the complexities of international business, manufacturing is generally the only value-chain activity that firms outsource abroad.

Accepted Answer

A) True 
 B)False

Question 4

The procurement of selected value-adding activities, including production of intermediate goods or finished products, from independent suppliers is known as ________.

Accepted Answer

A)  outsourcing 
B)  franchising 
C)  offshoring 
D)  licensing 
A)  outsourcing 
B)  franchising 
C)  offshoring 
D)  licensing

Question 5

Audio Component Outsourcing (Scenario)
Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality.
-Which of the following would be most important to determine in deciding whether to outsource some of Echo's value-chain activities?

Accepted Answer

A)  What are the long-term strategic goals and objectives of Echo? 
B)  Do engineers working in Echo have the ability to speak one or more European languages? 
C)  Are Echo employees generally afforded a high degree of workplace freedom? 
D)  Does Echo intend to increase its annual budget for innovation? 
A)  What are the long-term strategic goals and objectives of Echo? 
B)  Do engineers working in Echo have the ability to speak one or more European languages? 
C)  Are Echo employees generally afforded a high degree of workplace freedom? 
D)  Does Echo intend to increase its annual budget for innovation?

Question 6

Contract manufacturing can best be defined as ________.

Accepted Answer

A)  the outsourcing to independent suppliers of business service functions such as accounting, payroll, human resource functions, travel services, IT services, customer service, or technical support 
B)  the relocation of a business process or entire manufacturing facility to a foreign country 
C)  sourcing from the firm's own production facilities 
D)  an arrangement in which the focal firm contracts with an independent supplier to manufacture products according to well-defined specifications 
A)  the outsourcing to independent suppliers of business service functions such as accounting, payroll, human resource functions, travel services, IT services, customer service, or technical support 
B)  the relocation of a business process or entire manufacturing facility to a foreign country 
C)  sourcing from the firm's own production facilities 
D)  an arrangement in which the focal firm contracts with an independent supplier to manufacture products according to well-defined specifications

Question 7

The use of global sourcing has declined during the current phase of globalization.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an advantage of exporting?

Accepted Answer

A)  It allows focal firms to attain maximum control by establishing ownership of key assets in the foreign market. 
B)  It is a high-control strategy that requires substantial resource commitment when compared to equity joint ventures. 
C)  It minimizes exposure to tariffs and other trade barriers, as well as fluctuations in exchange rates. 
D)  It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing and can potentially generate profit margins that are often more favorable than in the domestic market. 
A)  It allows focal firms to attain maximum control by establishing ownership of key assets in the foreign market. 
B)  It is a high-control strategy that requires substantial resource commitment when compared to equity joint ventures. 
C)  It minimizes exposure to tariffs and other trade barriers, as well as fluctuations in exchange rates. 
D)  It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing and can potentially generate profit margins that are often more favorable than in the domestic market.

Question 9

Front office activities cannot be classified under BPO (Business Process Outsourcing).

Accepted Answer

A) True 
 B)False

Question 10

A global supply chain is the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized.

Accepted Answer

A) True 
 B)False

Question 11

After managers have chosen an appropriate market for exporting, the next step is to ________.

Accepted Answer

A)  decide about the resources to be committed 
B)  acquire the skills and competencies to handle export operations 
C)  engage appropriate international trade attorneys 
D)  modify advertising and promotional activities to suit individual markets 
A)  decide about the resources to be committed 
B)  acquire the skills and competencies to handle export operations 
C)  engage appropriate international trade attorneys 
D)  modify advertising and promotional activities to suit individual markets

Question 12

Not all business activities and processes lend themselves to global sourcing.

Accepted Answer

A) True 
 B)False

Question 13

The pattern or geographic arrangement of locations where the firm carries out value-chain activities is known as ________.

Accepted Answer

A)  configuration of value-adding activity 
B)  internalization 
C)  visual merchandising 
D)  disintermediation 
A)  configuration of value-adding activity 
B)  internalization 
C)  visual merchandising 
D)  disintermediation

Question 14

How do firms decide whether or not to outsource? In a short essay, describe the factors that contribute to the decision to internalize or externalize business activities.

Accepted Answer

Managers must decide between internaliza

Question 15

Transformational outsourcing suggests that just as the firm achieves gains in efficiency, productivity, quality, and revenues by leveraging offshore talent, it also obtains the means to turn around failing businesses, speed up innovation, restructure operations, and fund otherwise-unaffordable development projects.

Accepted Answer

A) True 
 B)False

Question 16

Organic Towel Exports (Scenario)
The Organic Towel Company (OTC) employs 400 workers at its facility in Liverpool, England, where the firm has been manufacturing 100% organic cotton towels for five years. OTC sells towels in the United Kingdom primarily to boutique hotels and specialty retail stores, as well as to individual consumers through the company's website. Recently, OTC managers attended a trade show in London where they made contact with numerous foreign market managers. OTC received a request from Earth Waves, an organic clothing store in Toronto, Canada, for a large order of towels. OTC had not been looking into expanding, but firm managers are seriously considering the opportunity to reach a global niche market with their towels.
-Which of the following should be considered first in making the decision to export OTC towels to Canada?

Accepted Answer

A)  What is the probability of OTC and Earth Waves entering into a joint venture? 
B)  How much fluctuation occurs in the exchange rate between the Canadian dollar and the British pound? 
C)  What is the likelihood of Earth Waves opening a subsidiary in Canada? 
D)  What documentation would be required for OTC to export towels to Asia? 
A)  What is the probability of OTC and Earth Waves entering into a joint venture? 
B)  How much fluctuation occurs in the exchange rate between the Canadian dollar and the British pound? 
C)  What is the likelihood of Earth Waves opening a subsidiary in Canada? 
D)  What documentation would be required for OTC to export towels to Asia?

Question 17

Audio Component Outsourcing (Scenario)
Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality.
-Which of the following is a benefit of global sourcing?

Accepted Answer

A)  bridging of the rich-poor divide 
B)  minimal reliance on suppliers 
C)  access to qualified personnel abroad 
D)  elimination of competitors 
A)  bridging of the rich-poor divide 
B)  minimal reliance on suppliers 
C)  access to qualified personnel abroad 
D)  elimination of competitors

Question 18

Which of the following statements is TRUE with regard to the R&D activities of a firm?

Accepted Answer

A)  As a strategic asset, R&D activities are of moderate importance to the firm. 
B)  R&D activities are usually concentrated at home. 
C)  R&D activities have a low likelihood of being internalized. 
D)  R&D activities have a high likelihood of being outsourced. 
A)  As a strategic asset, R&D activities are of moderate importance to the firm. 
B)  R&D activities are usually concentrated at home. 
C)  R&D activities have a low likelihood of being internalized. 
D)  R&D activities have a high likelihood of being outsourced.

Question 19

Describe the four-step process many managers use to achieve successful exporting.

Accepted Answer

a. Assess Global Market Opportunity-As a

Question 20

Which of the following is TRUE with regard to strategies for minimizing the risks of global sourcing?

Accepted Answer

A)  To ensure the success of sourcing ventures, the focal firm must exercise great care to identify and screen potential suppliers and then monitor the activities of those suppliers from which it sources. 
B)  To maximize returns and minimize risks, management should outsource core business operations. 
C)  Because production quality in an emerging market rarely varies over time, managers at the focal firm are not obliged to closely monitor manufacturing processes. 
D)  Firms must refrain from maintaining their own sourcing operations abroad in order to trim costs and minimize risks stemming from frequent currency fluctuations. 
A)  To ensure the success of sourcing ventures, the focal firm must exercise great care to identify and screen potential suppliers and then monitor the activities of those suppliers from which it sources. 
B)  To maximize returns and minimize risks, management should outsource core business operations. 
C)  Because production quality in an emerging market rarely varies over time, managers at the focal firm are not obliged to closely monitor manufacturing processes. 
D)  Firms must refrain from maintaining their own sourcing operations abroad in order to trim costs and minimize risks stemming from frequent currency fluctuations.

Which of the following is most likely a disadvantage to firms who use exporting as an entry strategy?

Focal firms that internationalize through exporting will most likely perform ________ in the home market.

Given the complexities of international business, manufacturing is generally the only value-chain activity that firms outsource abroad.

The procurement of selected value-adding activities, including production of intermediate goods or finished products, from independent suppliers is known as ________.

Contract manufacturing can best be defined as ________.

The use of global sourcing has declined during the current phase of globalization.

Which of the following is an advantage of exporting?

Front office activities cannot be classified under BPO (Business Process Outsourcing).

A global supply chain is the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized.

After managers have chosen an appropriate market for exporting, the next step is to ________.

Not all business activities and processes lend themselves to global sourcing.

The pattern or geographic arrangement of locations where the firm carries out value-chain activities is known as ________.

How do firms decide whether or not to outsource? In a short essay, describe the factors that contribute to the decision to internalize or externalize business activities.

Which of the following statements is TRUE with regard to the R&D activities of a firm?

Describe the four-step process many managers use to achieve successful exporting.

Which of the following is TRUE with regard to strategies for minimizing the risks of global sourcing?

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance in International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Financial Management and Accounting in the Global Firm

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters

Exam 13: Exporting and Global Sourcing

Which of the following is most likely a disadvantage to firms who use exporting as an entry strategy?

Focal firms that internationalize through exporting will most likely perform ________ in the home market.

Given the complexities of international business, manufacturing is generally the only value-chain activity that firms outsource abroad.

The procurement of selected value-adding activities, including production of intermediate goods or finished products, from independent suppliers is known as ________.

Contract manufacturing can best be defined as ________.

The use of global sourcing has declined during the current phase of globalization.

Which of the following is an advantage of exporting?

Front office activities cannot be classified under BPO (Business Process Outsourcing).

A global supply chain is the firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized.

After managers have chosen an appropriate market for exporting, the next step is to ________.

Not all business activities and processes lend themselves to global sourcing.

The pattern or geographic arrangement of locations where the firm carries out value-chain activities is known as ________.

How do firms decide whether or not to outsource? In a short essay, describe the factors that contribute to the decision to internalize or externalize business activities.

Which of the following statements is TRUE with regard to the R&D activities of a firm?

Describe the four-step process many managers use to achieve successful exporting.

Which of the following is TRUE with regard to strategies for minimizing the risks of global sourcing?

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance in International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Financial Management and Accounting in the Global Firm

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters