Exam 13: The Strategy of International Business

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

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

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

What is an experience curve?

When the firm simultaneously faces both strong cost pressures and strong pressures for local responsiveness,the ideal strategy to follow is the transnational strategy.

One of the sources of economies of scale is the ability to spread fixed costs over a large volume.

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:

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

When a firm focuses on increasing profitability by customizing the product or service so that they provide a good match to tastes and preferences in different national markets,the firm is following a transnational strategy.

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

Responding to pressure for _____ requires that a firm differentiate its product offering and marketing strategy from country to country.

Diminishing returns 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 consumer surplus can be best described as:

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

The value of a product to an average consumer is V; and the average price that the firm can charge a consumer for that product is P.Here,V - P can be termed as:

Which of the following is NOT associated with firms following the global standardization strategy?

The percentage increase in net profits over time measures:

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

Once a firm has established a low-cost position,it can act as a barrier to new competition.

The customer is able to garner the benefit of the consumer surplus because one firm is competing with other firms for the customer's business,so the firm must charge a lower price than it could if it were a monopoly supplier.