Question 1

Rendell Corp.has just entered international markets.While it has begun to see some benefits, it is also challenged by the high cost of transportation and the expense of tariffs.Rendell most likely used exporting as its mode of entry.

Accepted Answer

A) True 
 B)False

Question 2

Italy has become the leader in the shoe industry because of related and supporting industries such as a well-established leather-processing industry that provides the leather needed to construct shoes and related products.

Accepted Answer

A) True 
 B)False

Question 3

Operating in multiple international markets can provide firms with __________ perhaps even in terms of __________.

Accepted Answer

A)  location advantages; larger markets 
B)  research and development activities; larger markets 
C)  new learning opportunities; research and development activities 
D)  economies of scale and learning; larger markets

Question 4

Most firms enter international markets sequentially, introducing their __________ first.

Accepted Answer

A)  most innovative products 
B)  largest and strongest lines of business 
C)  most generic products, which will be more likely to generate universal product demand, 
D)  products customized to the region

Question 5

One of the primary reasons for failure of cross-border strategic alliances is:

Accepted Answer

A)  the incompatibility of the partners. 
B)  conflict between legal and business systems. 
C)  security concerns and terrorism. 
D)  high debt financing.

Question 6

Raymond Vernon states that the classic rationale for international diversification is to:

Accepted Answer

A)  preemptively dominate world markets before foreign companies can establish dominance. 
B)  avoid domestic governmental regulation. 
C)  extend the product's life cycle. 
D)  discover product innovations.

Question 7

RoserOpp Corp.has begun to increase its commitment to international diversification.Stakeholders should expect an initial decrease in returns, followed by a quick increase as RoserOpp learns how to manage its increased geographic diversification.

Accepted Answer

A) True 
 B)False

Question 8

Acquisitions, greenfield ventures, and sometimes joint ventures are appropriate when firms want to establish a strong presence in an international market.

Accepted Answer

A) True 
 B)False

Question 9

Exporting and licensing are the most appropriate ways for smaller firms to first enter international markets.

Accepted Answer

A) True 
 B)False

Question 10

When the country risk is high, firms prefer to enter with a greenfield investment rather than a joint venture.

Accepted Answer

A) True 
 B)False

Question 11

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.

Accepted Answer

A) True 
 B)False

Question 12

Moving into international markets is a particularly attractive strategy to firms whose domestic markets:

Accepted Answer

A)  demand a differentiation strategy for success. 
B)  are limited in opportunities for growth. 
C)  have developed unfriendly business attitudes toward the industry. 
D)  have too much regulation.

Question 13

Arkadelphia Polymers, Inc., earns 60 percent of its revenue from exports to Europe and Asia.The CEO of the company would be:

Accepted Answer

A)  concerned if the value of the dollar strengthened. 
B)  pleased if the value of the dollar strengthened. 
C)  unconcerned about the fluctuation in the value of the dollar because the company is widely diversified geographically. 
D)  likely to consider moving to international strategic alliances or acquisitions if the value of the dollar fell and remained low.

Question 14

While there are multiple means of entering new international markets, firms should use one method consistently with all of its various products and across its different markets in order to reduce administrative complexity.

Accepted Answer

A) True 
 B)False

Question 15

Coca-Cola and PepsiCo are examples of firms that have found it unnecessary to aggressively pursue international strategies because of extensive growth opportunities available in the U.S.market.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is NOT a disadvantage of international acquisitions?

Accepted Answer

A)  They are very expensive and often require debt financing. 
B)  The acquiring firm has to deal with the regulatory requirements of a host country. 
C)  Merging the acquired and acquiring firm is difficult. 
D)  It is the slowest way to enter a new market.

Question 17

A global strategy:

Accepted Answer

A)  is easy to manage because of common operating decisions across borders. 
B)  achieves efficient operations without sharing resources across country boundaries. 
C)  increases risk because decision making is centralized at the home office. 
D)  lacks responsiveness to local markets.

Question 18

All of the following complicate the implementation of an international diversification strategy EXCEPT:

Accepted Answer

A)  widespread multilingualism. 
B)  increased costs of coordination between business units. 
C)  cultural diversity. 
D)  logistical costs.

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

The transnational strategy is becoming increasingly necessary to compete in international markets for all of the following reasons EXCEPT:

Accepted Answer

A)  the growing number of competitors heightens the requirements to keep costs down. 
B)  the desire for specialized products to meet consumers' needs. 
C)  differences in culture and institutional environments require firms to adapt their products and approaches to local environments. 
D)  it is easy to use because of its unifying goals.

Exam 8: International Strategy

Rendell Corp.has just entered international markets.While it has begun to see some benefits, it is also challenged by the high cost of transportation and the expense of tariffs.Rendell most likely used exporting as its mode of entry.

Italy has become the leader in the shoe industry because of related and supporting industries such as a well-established leather-processing industry that provides the leather needed to construct shoes and related products.

Operating in multiple international markets can provide firms with perhaps even in terms of .

Most firms enter international markets sequentially, introducing their __________ first.

One of the primary reasons for failure of cross-border strategic alliances is:

Raymond Vernon states that the classic rationale for international diversification is to:

RoserOpp Corp.has begun to increase its commitment to international diversification.Stakeholders should expect an initial decrease in returns, followed by a quick increase as RoserOpp learns how to manage its increased geographic diversification.

Acquisitions, greenfield ventures, and sometimes joint ventures are appropriate when firms want to establish a strong presence in an international market.

Exporting and licensing are the most appropriate ways for smaller firms to first enter international markets.

When the country risk is high, firms prefer to enter with a greenfield investment rather than a joint venture.

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.

Moving into international markets is a particularly attractive strategy to firms whose domestic markets:

Arkadelphia Polymers, Inc., earns 60 percent of its revenue from exports to Europe and Asia.The CEO of the company would be:

While there are multiple means of entering new international markets, firms should use one method consistently with all of its various products and across its different markets in order to reduce administrative complexity.

Coca-Cola and PepsiCo are examples of firms that have found it unnecessary to aggressively pursue international strategies because of extensive growth opportunities available in the U.S.market.

Which of the following is NOT a disadvantage of international acquisitions?

A global strategy:

All of the following complicate the implementation of an international diversification strategy EXCEPT:

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 transnational strategy is becoming increasingly necessary to compete in international markets for all of the following reasons EXCEPT: