Exam 9: International Strategy

Which of the following statements is true of wholly owned subsidiaries as means of entering international markets?

Identify a true statement about administrative distance.

With respect to distance between a foreign and a domestic market, administrative distance is likely to be more when the new market _________.

Score Ink Corp., a publishing firm, decides to enter a new market. It changes its strategy from standardization to local responsiveness in order to meet the needs of the new market. However, in order to execute this strategy, it had to increase production and distribution expenses. Which of the following is adopted by Score Ink?

In which of the following circumstances can a firm best achieve economies of scale?

Karl Jahaz Corp., an automobile company, has many business units across the globe. Although the company has reached saturation in the domestic market, it continues to generate substantial revenue by selling its old-model, light commercial vehicles in a few countries. In this case, which of the following is achieved by the globalization of the company?

Wale Inc., an electronics manufacturer, adopts a multidomestic strategy to enter the global market. It centers on tailoring products and operations to individual markets. However, the cost pressure becomes too intense. In order to manage high costs, it manages the variation by concentrating only on air conditioners in a specific country. Which of the following is being exemplified in this case?

Among which countries is administrative distance low?

Ryuuku Inc., a cloth manufacturing company, enters a foreign market. It tailors its products and distribution strategies to meet the needs of the local market. Modifying the products and operations to fit local customer requirements results in high cost to the company; however, the revenue was higher than that in the domestic market. In this case, the competing pressure addressed by Ryuuku is __________.

The spread of businesses across national borders is called ___.

Identify a true statement about local responsiveness.

Write a note on cultural distance.

In the context of modes of international market entry, which of the following statements is true of a joint venture?

Dave is a research analyst at Geo Corp., a U.S.-based firm, specializing in organic farm produce. Since the management is considering entering a foreign market, Dave begins to study the risks associated with this move. After gathering sufficient data regarding the internal factors of the new market, he categorizes the risks based on the type. Which of the following is most likely to be considered a political risk?

Tokef Inc., a U.S.-based firm, adopts a multidomestic strategy to enter the Japanese market. Which of the following is likely to be true in this case?

Leo Inc., a U.S.-based firm, decides to enter a foreign market through offshoring. Which of the following is likely to be the primary reason for Leo to enter the new market?

Which of the following is most likely to be categorized as a market risk associated with entering a new market?

Maria and Sasha, researchers at Gem Corp., discuss the best method for their firm to enter a foreign market with wholly owned subsidiaries. Maria believes that greenfield investments would be more suitable, while Sasha believes that acquiring a local firm is a better option. Which of the following weakens Maria's argument?

Although there are several alternative treatments available across the globe, herbal products produced in Brazil are sold at a premium. The ancient Brazilian recipes for wellness are considered the main reason for the premium price. This is an example of a(n)__________ arbitrage.

Trosome Petroleum Corp. opens new plants in Sopintry. In order to gain economies of scale, it centralizes its products and operations. Decisions regarding operations in Sopintry are made at the central headquarters. Which of the following primary strategies is used by the company to do business internationally?