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Test 3 study sheet. Same drill as usual. You may bring a 3X5 card.

You may ask me a question about any question on the study sheet and I will reason through the answer with you, but I will not simply give you an answer. 1) Which of the following statements about Zara is most likely FALSE? A) Zara puts fewer products on clearance racks than most of its competitors in the industry. B) Zara's large advertising budget generates word-of-mouth and attracts new buyers. C) New products and designs are delivered to Zara stores every three to four weeks. D) Most of Zara's products move through the firm's distribution center in Spain. 4) ________ is the framework that managers apply to determine the competitive moves and business approaches that run the company. A) Competition B) Growth C) Strategy D) Vision 7) Which of the following is the best example of a product disruption driving industry change? A) redesign of Toyota's Prius B) introduction of Apple's iPad C) AT&T's purchase of T-Mobile D) merger of United and Continental 11) Improving explanatory power of the IO paradigm can be done by considering the potential for ________ to lead to a company's sustained competitive advantage. A) bright, motivated managers B) political trends and events C) cultural institutions D) new markets 16) Value-Mart has achieved the status of overall low-cost producer in its industry, which means that Value-Mart ________. A) can strongly defend its market position in the event of a price war B) will earn the largest profits of any company in the industry C) makes the most appealing product in its industry D) can block the entry of new firms into the industry 20) A differentiation strategy works well when ________. A) a company designs a universal product for a broad market B) buyers believe minor product differences are irrelevant to price C) buyers are highly sensitive to price shifts and quality control D) a company can continually develop products that have unique features

23) A company's value chain is best described as the ________. A) variable sequence of converting product ideas into value for shareholders

B) mixture of activities taken to define product value standards and price points C) discrete series of steps taken to move a product from conception to end-users D) blueprint that must be followed to leverage the core capabilities of a global firm 29) Johnson Enterprises manufactures computer chips used in cell phones. The MNE has long production runs that lower the per unit cost of each chip. The firm also purchases materials in bulk from its suppliers with whom Johnson has long-term contracts. Johnson is most likely benefiting from ________. A) economies of scale B) the cluster effect C) digitization D) location economies 34) No matter the country or culture, money has three fundamental features that motivate consumers around the world to maximize purchasing power by buying the highest possible quality product for the lowest possible price. These three features include all of the following EXCEPT which one? A) scarcity B) difficulty of acquisition C) difficulty of allocation D) difficulty of saving 39) Advantages of following a strategy of local responsiveness include the ________. A) improved ability to transfer skills to employees in different locations B) opportunity to adopt a global advertising program C) ease in standardizing manufacturing methods across countries D) flexibility to apply location-specific skills to local opportunities 42) In the global environment, firms use an international strategy, a multidomestic strategy, a global strategy, or a ________ strategy. A) regional B) standardization C) transnational D) locational 46) Which of the following is NOT a disadvantage of the international strategy? A) Headquarters can misread foreign-market opportunities and threats. B) The transfer of core competencies to foreign markets is complicated by the need to adapt to local needs. C) Local subsidiaries are not given the opportunity to adapt value activities and share what they have learned with headquarters. D) The company can be blindsided by an unexpectedly innovative rival in a foreign market. 52) A disadvantage of the ________ strategy is that firms that adopt this strategy can decentralize too much autonomy to national subsidiaries. A) multidomestic

B) continental C) international D) transnational Chapter 12 1) Comparing countries in international business is LEAST useful for determining the ________. A) best location for sales and production B) sequence of entering different countries C) amount of resources to allocate in each country D) selection of which managers to send to which countries 6) Which of the following most accurately compares the techniques of scanning versus detailed analysis of countries? A) Scanning is used for planning and detailed analysis is used for control. B) Detailed analysis is used to consider countries overlooked in the scanning process. C) Scanning considers a large number of countries so that only the most promising ones undergo a detailed analysis. D) Scanning compares one country to another, whereas detailed analysis compares regions within a single country. 10) Dawson Manufacturing produces and sells DVD players and is planning to expand sales internationally. Dawson has narrowed down the list of potential countries to India and Guatemala. A Dawson manager has the task of obtaining data regarding the number of DVD players sold annually in India and Guatemala. If unable to locate this information, she might most likely estimate the sales potential of these two countries by ________. A) determining average wages B) calculating future inflation rates C) reviewing the countries' dependence on steel imports D) examining the sales history of flat-screen televisions 14) The ability to compare production costs among countries in an effort to determine where to locate production is significantly hampered by all of the following EXCEPT ________. A) the number of ways the same product can be made B) restrictions on the international flow of data C) the ways that laws may be enforced D) future costs from exchange rate changes 21) The concept of liquidity preference in international operations refers to ________. A) a company's willingness to accept a lower rate of return on investments in countries where it can more easily sell them and convert the proceeds at a favorable rate B) a company's willingness to accept lower rates of return in poor countries that really need the investments C) management's need to maintain sufficient funds, preferably in local currency, in each country of operation to ensure meeting daily cash needs

D) investors' preference for foreign stocks over foreign bonds because of the larger market for them

25) Which of the following best explains why U.S. firms typically place earlier and greater emphasis on expansion into Canada and the U.K.? A) most significant sales opportunities B) similarities in culture and legal systems C) availability of necessary natural resources D) government incentives for allied nations 29) An example of a first-mover advantage in international operations is ________. A) gaining economies of scale at a lower output level than competitors B) increasing sales response functions and customer service C) using a small country for market tests prior to entering a large country D) lining up the best suppliers and distributors before competitors enter the market 33) Which of the following LEAST explains why inaccuracies appear in published information about countries? A) inclusion of both legal and illegal economic activities B) inclusion of both market and non-market economic activities C) poor methodology used in data collection D) use of different translation software 37) Grids are a useful method of comparing countries for international business expansion because they ________. A) generally show how countries will perform in the future B) show risk on one axis and opportunity on another C) set minimum scores for proceeding further D) highlight first-mover advantages 42) In a diversification strategy for international expansion, a company would move ________. A) rapidly into many foreign countries, and then gradually increase its presence in those countries B) rapidly into a few foreign countries with many of its products and most of its resources C) into one foreign country and fully expand its product lines in that country before moving to another country D) move quickly into a regional foreign market but build up its resources in only a few of the countries in the region 45) Which of the following is NOT true about the harvesting or divestment of foreign operations? A) One of the motives is to use resources where the performance prospects are better. B) Companies can harvest or divest by selling existing facilities. C) Closing a facility can be difficult because of governmental performance contracts. D) Companies have tended to divest too soon, rather than working to improve performance.

50) Assume Company A receives a proposal from Company B to be a joint venture partner abroad. Company A is most likely to make its decision based on ________. A) an opportunity-risk matrix B) a go-no-go basis C) a global matrix comparison D) an oligopolistic reaction Chapter 13 1) Which of the following transactions refers to the sale of goods or services produced by a company based in one country to customers that reside in a different country? A) importing B) countertrading C) exporting D) freight forwarding 7) This spring break you are planning to leave the U.S. and visit London, where you will stay in a hotel for 10 days. The London hotel will be performing a ________. A) indirect merchandise export B) merchandise export C) service export D) service import 11) Which of the following is usually NOT a factor that triggers companies to look to exports to boost total sales? A) maturity of the domestic market B) potential to leverage core competencies in foreign markets C) social needs in developing countries D) response to the market entry of a foreign rival 16) Which of the following statements about small and medium-sized enterprises (SMEs) is true? A) SMEs are steadily reducing their export intensity ratios. B) SMEs make up the majority of all U.S. exporters. C) SMEs are the source of more than half of the monetary value of U.S. exports. D) SMEs that export goods have fewer than 20 employees. 20) An Australian company makes athletic wear for women, men, and adults. After several years of successfully exporting its products to the U.K. and the U.S., the company began exporting to Japan. This is an example of ________. A) a born-global company B) a location advantage C) third-party exporting D) incremental internationalization

25) All of the following are common problems associated with exporting and importing EXCEPT ________. A) managing financial risks B) finding reliable intermediaries C) matching foreign rivals' prices D) establishing distribution networks 31) A driving factor for the growth in imports is the impact of ________. A) government programs B) labor specialization C) consumer preferences D) social trends 43) Exporters who opt for direct exporting are most likely to _______. A) sustain long-term profitability B) sell products to domestic retailers C) depend on international marketers D) sell products to a foreign distributor 48) A freight forwarder performs which of the following functions? A) arranging the fastest and cheapest transportation of products to and from foreign suppliers B) taking title to the goods it exports and imports from country to country C) acting as a sales representative in a foreign market D) valuing products that qualify for favorable tariffs 54) Ultimately, countertrade is an inefficient way of doing business because it ________. A) encourages buyers and sellers to use customs brokers to handle exchanges B) requires buyers and sellers to negotiate a fair value on the exchange C) reduces the risk that the goods sent as payment are of poor quality D) eliminates the potential for price and financial distortion 59) Fair Day Paper Products is a family-owned start up that imports bamboo paper from China to make custom greeting cards. The firm has experienced many problems in receiving the supplies from China; recurring problems include lost shipments, delays, and damaged products. Fair Day would most likely benefit by enlisting the help provided by which of the following? A) countertraders B) customs brokers C) import agents D) third party logistics
Chapter 14

1) Coca-Cola collaborates extensively abroad, but it refuses collaboration that might imperil control of its core competency. As a result, which of the following is NOT one of its

international collaborative forms? A) sharing ownership in the production of its secret formula concentrate B) using franchisers to bottle, sell, and deliver Coke beverages C) licensing Coke's trademark for use on products in which it lacks skills D) forming joint ventures with companies that provide supplies for Coke products 6) A U.S. firm owns 100% of its production facility in Brazil, thus is most likely using a ________ strategy. A) comprehensive ownership B) vertical integration C) appropriability D) internalization 11) A company that makes a foreign investment largely to acquire knowledge is most likely to use ________ as a means of expansion. A) a greenfield investment B) internalization C) an acquisition D) a licensing agreement 17) Risk is an important factor for companies engaged in international business. One way a collaborative arrangement helps minimize risk when operating abroad is by ________. A) reducing the possibility of technological appropriation B) freeing up resources so a company can diversify into more countries C) preventing the entry of new competitors D) eliminating losses from exchange rate depreciation abroad 21) All of the following are arguments for governments to limit foreign control of key industries EXCEPT which one? A) Host countries don't need foreign resources such as technology and export markets for these industries. B) History shows that home governments have used powerful foreign companies to influence policies in the countries where they operate. C) Important decisions can be made abroad that are contrary to the country's best interest. D) Foreign companies can find means of profiting in these industries without having to control them. 24) Chrysler granted South East Motor (a company in China) rights to produce its Grand Voyager minivan for sale in China in exchange for a fee. This is an example of a(n) ________. A) licensing agreement B) bargaining school arrangement C) technology appropriation

D) turnkey operation 30) When a company wants to be compensated in a foreign subsidiary beyond its contribution in capital and managerial resources, it often ________. A) licenses intangible property to its subsidiary B) negotiates a special agreement with the host government C) establishes a management contract D) sets up an equity alliance 42) Why do turnkey operators often require a feasibility study as part of the contract? A) By adding to the cost, they earn more money. B) This lessens the risk of contract cancellation when political leadership changes. C) This lowers their risk of foreign exchange losses. D) This helps to define what constitutes "satisfactory completion" of the project. 47) Which of the following is LEAST likely to trigger the breakup of a joint venture? A) The partners place a different degree of importance on the joint venture. B) The partners develop different capabilities to contribute to the joint venture. C) The partners come from different industries. D) Objectives evolve differently over time.

54) Without a proven track record in collaborative arrangements, a company will most likely need to ________. A) have its home country government approve licensing contracts B) delegate fewer responsibilities to partners at the company C) negotiate harder with and make more concessions to a partner D) depend more on trust as a control mechanism

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