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Which of the following is a drawback of pursuing a transnational strategy?


A) It creates bottlenecks for global learning.
B) It exposes a firm to diseconomies of scale and location.
C) It requires a global matrix structure, which is difficult to implement.
D) It involves locating all key business activities in the home country headquarters.

E) A) and B)
F) A) and C)

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Which of the following countries has a high geographic distance but a low cultural distance from the United States?


A) Canada
B) Mexico
C) Australia
D) France

E) B) and C)
F) A) and D)

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Planet Resource Inc. is a global internet company that offers country-specific variations of its sites, keeping in mind the linguistic and religious differences between the countries it serves. Planet Resource is most likely doing this to


A) reduce its geographical distance from the other countries.
B) increase its administrative distance from the other countries.
C) increase its economic distance from the other countries.
D) reduce its cultural distance from the other countries.

E) A) and C)
F) A) and B)

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The risk of intellectual property appropriation increases when companies follow a multidomestic strategy. Elaborate on this statement.

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The risk of intellectual property approp...

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Vassar Systems Inc. wants to globally expand its market. It intends to ensure that its mode of foreign entry allows it to have strong control over its operations and protect its intellectual property, though that may mean investing a significant amount of capital and other resources. In this scenario, which of the following foreign entry modes would best suit Vassar Systems?


A) exporting
B) franchise agreement
C) acquisition
D) licensing

E) B) and C)
F) A) and D)

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Makes Scents Inc., a company that manufactures and sells premium perfumes, is pursuing an international strategy. PriceSmasher Inc., a supermarket chain, follows a multidomestic strategy. Which of the following statements is most likely true of this scenario?


A) Makes Scents Inc. will sell the same products in both domestic and foreign markets, whereas PriceSmasher Inc. will customize its product offerings to suit local requirements.
B) Makes Scents Inc. will pursue a differentiation strategy at the business level, whereas PriceSmasher Inc. will pursue a cost-leadership strategy at the business level.
C) Makes Scents Inc. will be better protected from exchange rate fluctuations when compared to PriceSmasher Inc.
D) Makes Scents Inc. will not be able to use its home-based core competencies in foreign markets as much as PriceSmasher Inc. will.

E) A) and B)
F) C) and D)

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During the period of Globalization 1.0, the mode of entry into foreign markets primarily involved


A) exporting goods.
B) making foreign direct investments.
C) making foreign institutional investments.
D) licensing production and distribution.

E) A) and B)
F) A) and C)

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Communities of learning are metropolitan areas that have large numbers of high school graduates who are ready for a university education.

A) True
B) False

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Which of the following is the most likely advantage of using foreign acquisitions or greenfield plants as a foreign entry mode?


A) They are easy to initiate and terminate.
B) They require low amounts of investments in terms of capital.
C) They reduce a firm's exposure to loss of reputation.
D) They are based on contracts rather than ownership.

E) None of the above
F) C) and D)

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When should a multinational company pursue an international strategy?

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An international strategy is essentially...

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What are the two opposing forces that multinational companies have to face when competing around the globe?

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Multinational companies face two opposin...

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Frederica, the chief financial officer at a moped manufacturer in Canada, wants to build new plants in Canada rather than overseas. Which of these points should she make as she argues her case to the board of directors?


A) "As the rest of the world globalizes, we will lead the way in strengthening our home nation."
B) "Keeping our factories in Canada means facing up to the liability of foreignness."
C) "Canada's wages and benefits are so low compared with the rest of the world that it makes the most sense to build factories here."
D) "It will be much more difficult to protect our intellectual property if we build factories overseas."

E) A) and D)
F) C) and D)

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Which of the following entry modes was used extensively in Globalization 1.0 stage?


A) strategic alliances
B) acquisitions
C) greenfield operations
D) exports

E) All of the above
F) C) and D)

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Amber is a strategist for a furniture manufacturer that has a large presence in the United States and Canada. By checking economic and political reports, she knows that trade and investment barriers are falling among wealthy nations. She also knows that the price of oil has dropped 50 percent in the previous two years. Based on this information, what action should Amber and her company take?


A) Amber and her employer should wait out this period of uncertainty and take action when market forces are more stable.
B) They should anticipate market corrections because investment barriers and the price of oil inevitably rise.
C) Amber and her employer need to prepare for the cost of doing business to increase.
D) They should seriously consider globalization because of the falling trade and investment barriers.

E) C) and D)
F) A) and B)

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Atangadi is a strategist who wants to decide on the appropriate strategy to help his firm "go global." Which of the following should he consider while choosing his strategy?


A) He must be aware of the fact that despite globalization and the emergence of the internet, firm geographic location has actually maintained its importance.
B) He should rely on his firm's business-level strategy as a clue to possible strategies pursued globally.
C) He should remember that he has only one framework at his disposal to make global strategy decisions.
D) He must remember that higher levels of control and a lower likelihood of any loss in reputation go along with less investment-intensive foreign entry modes.

E) None of the above
F) A) and C)

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Screaming Eagle, a luxury motorcycle company, sells the same motorcycles and offers the same superior services in both its home country and foreign markets. The market it operates in faces low pressures for both local responsiveness and cost reductions. Which of the following strategies within the integration-responsiveness framework does Screaming Eagle most likely pursue?


A) a multidomestic strategy
B) a transnational strategy
C) a global-standardization strategy
D) an international strategy

E) B) and D)
F) A) and D)

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What products and industries does geographic distance affect the most?

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Geographic distance most affects industr...

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Sven is a senior vice president at a textile manufacturer that wants to move from being 20 percent globalized to 70 percent globalized in the next 10 years. What are some possible drawbacks that Sven's company must anticipate?


A) None. All political and economic factors point to the rise of globalization.
B) Rising wages may cancel out cost savings of access to low-cost input factors.
C) Governments may lower barriers to international trade.
D) Improved communication technology may lead to longer production cycles.

E) A) and D)
F) None of the above

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Because keeping cost low is critical to IKEA's value innovation, it switched from a(n)


A) transnational strategy to a multidomestic strategy.
B) transnational strategy to a global-standardization strategy.
C) international strategy to a multidomestic strategy.
D) international strategy to a global-standardization strategy.

E) A) and D)
F) A) and C)

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What are the implications of continued economic development across the globe for multinational enterprises (MNEs)? Explain using China as an example.

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Continued economic development across th...

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