Exam 13: The Strategy of International Business

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

_____ imply that when a firm already has significant value built into its product offering,increasing value by a relatively small amount requires significant additional costs.

A firm benefits by basing each value creation activity it performs at that location where economic,political,and cultural conditions,including relative factor costs,are most conducive to the performance of that activity.Firms that pursue such a strategy can realize:

Which of the following is true of the international strategy?

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

Lenovo's ThinkPad laptop computers is designed in the United States,the case,keyboard,and hard drive are made in Thailand; the display screen and memory in South Korea; the built-in wireless card in Malaysia; and the microprocessor in the United States.In each case,these components are manufactured and sourced from the optimal location given current factor costs.In this example,Lenovo has:

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

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

The basic strategy paradigm suggests that to maximize its profitability,a firm should do all of the following,EXCEPT:

Global expansion offers companies the opportunity to generate greater profits than companies that focus strictly on the domestic market.

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

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

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.

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:

How can a firm increase its profitability?

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

A multinational firm may need to delegate marketing functions to national subsidiaries to be responsive to local differences in distribution channels.

It has been observed that a product's production costs decline by some quantity about each time,cumulative output:

When companies disperse different stages of the value chain to those locations around the world where perceived value is maximized or where the costs of value creation are minimized,companies create:

In a multinational enterprise,skills are always generated at the headquarters location and are then dispersed to the rest of the organization.