Exam 13: The Strategy of International Business

Economies that arise from performing a value creation activity in the optimal location are known as location economies.

Discuss the factors that lead to pressure for local responsiveness.

What are learning effects? When are learning effects most significant?

When a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale, the firm should follow a(n) _____ strategy.

Profit growth is measured by the percentage increase in net profits over time.

What is a core competence? Why is it essential to the success of the firm?

Moving up the experience curve allows a firm to reduce its cost of creating value and increase its profitability.

The amount of value a firm creates is measured by the difference between its costs of production and the price that it charges for its products.

When individuals gain knowledge of the most efficient ways to perform particular tasks, they are saving costs through:

A consumer surplus can be best described as:

To leverage subsidiary skills, companies should establish incentive systems that encourage local employees to acquire new skills.

Support activities include the design, creation, and delivery of a product.

Cost savings that come from learning by doing are known as economies of scale.

Because differentiation across countries can involve significant duplication and a lack of product standardization, it may reduce costs.

Which of the following is an example of a primary activity in a firm's value chain?

_____ activities of the value chain provide inputs that allow the primary activities to occur.

What is an experience curve?

Economies of scale arise from all of the following sources, EXCEPT:

_____ strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences, and where cost pressures are not too intense.

Firms usually respond to pressures for cost reduction by trying to: