Exam 8: International Strategy

A fundamental reason for a country's development of advanced and specialized factors of production is often its: ?

Bunyan Heavy Equipment, a U.S. firm, is investigating expanding into Russia using a greenfield venture. The committee researching this project has delivered a negative report. The MAIN concern of the committee is probably:

Because of the lack of protection of intellectual property in some foreign countries, licensing arrangements are one of the best ways for a firm to protect its technology from being appropriated by potential competitors.

Even if effectively implemented, the transnational strategy often produces lower performance than does the implementation of either the multi-domestic or global strategies.

A company that chooses a truly global corporate-level strategy assumes that the liability of foreignness will be minimal.

The means of entry into international markets that offers the greatest control is:

An increase in the value of the U.S. dollar is an example of an economic risk in that it can reduce the value of U.S. multinational firms' international assets and earnings in other countries.

The "regionalization" environmental trend means that firms can focus on a region (customization) but also have some standardization or sharing within the region.

What are the three basic benefits of international strategies?

The choices that a firm has for entering the international market include all of the following EXCEPT:

Cultural differences affect location advantages in that business transactions are less difficult for a firm to complete when there is a strong match among the cultures with which the firm is involved.

By choosing a region where markets are more similar, the firm may be able to better understand those markets and cater to their needs, but also achieve economies through sharing of resources.

The firm using a global strategy seeks to develop economies of scale as it produces the same or virtually the same products for distribution to customers throughout the world who are assumed to have similar needs.

The decision of what entry mode to use is primarily based on all of the following factors EXCEPT:

Research suggests that the performance of the global strategy is enhanced if it deploys in areas where regional integration across countries is occurring.

Which of the following is an advantage associated with greenfield ventures?

Rivals Airbus and Boeing have multiple manufacturing facilities and outsource activities partly for the purpose of developing economies of scale as a source of being able to create value for customers.

International associations such as the European Union, the Organization of American States, and the North American Free Trade Association encourage regionalization of competition rather than globalization.

The greenfield venture option is useful when control of proprietary technology is important in an international expansion.

Identify and describe the major risks of international diversification.