Exam 13: The Strategy of International Business

For firms that are selling a product that serves universal needs, and that do not face significant competition, a(n) _____ strategy makes sense.

The efficiency frontier has a convex shape because of:

For a firm, all positions on the efficiency frontier are viable.

A firm facing low pressures for cost reductions and low pressures for local responsiveness, is most likely to follow a(n) _____ strategy.

_____ can be defined as the rate of return that the firm makes on its invested capital, which is calculated by dividing the net profits of the firm by total invested capital.

When consumer tastes and preferences differ significantly between countries, there is low pressure for local responsiveness.

A strategy that focuses on increasing the attractiveness of a product is referred to as a(n):

Which of the following is a disadvantage of the localization strategy?

It has been observed in the aircraft industry that, each time cumulative output of airframes was doubled, unit costs typically declined to 80 percent of their previous level. This is an example of:

Support activities are always less important than the primary activities in achieving a competitive advantage.

R&D, production, marketing and sales, and customer service are all examples of primary activities.

Consider the firm in terms of a value chain. What is the difference between primary activities and support activities? Provide examples of each.

Moving down the experience curve:

The success of many multinational corporations is based not just upon the goods or services that they sell in foreign nations, but also upon the core competencies that underlie the development, production, and marketing of those goods or services.

Enterprises that pursue an international strategy tend to decentralize control over marketing and product strategies.

What are the two types of competitive pressures that firms competing in the global marketplace face? How do firms respond to these pressures?

It has been suggested that learning effects are important only during the start-up period of a new process and that they cease after two or three years. Any decline in the experience curve after such a point is due to:

_____ exists when the tastes and preferences of consumers in different nations are similar if not identical.

Discuss Michael Porter's interpretation of value creation and competitive advantage.

A localization strategy makes most sense when demands for local responsiveness are high, but cost pressures are moderate or low.