Exam 7: Strategies for Competing in International Markets

A) one where the company creates a subsidiary business by setting up all aspects of the operation upon entering the market from the ground up.
B) one where foreign facilities and marketing strategies are shared with local businesses.
C) one where the company learns through training by the foreign entity on how to compete.
D) one that supports exports into a foreign market by marketing indirectly thru local rivals.
E) one that offers lower risk and a faster path to returns.

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A) when high transportation costs make it expensive to operate from central locations.
B) whenever buyer-related activities are best performed in locations close to buyers.
C) if diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations.
D) when it is desirable to hedge against (1) the risks of fluctuating exchange rates, (2) supply interruptions or (3) adverse political developments.
E) All of these.

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A) is competitively disadvantaged when the euro declines in value against the U.S. dollar.
B) is largely unaffected by fluctuating exchange rates between the euro and the U.S. dollar; it would, however, be affected if its plants were in the U.S.
C) becomes more competitive in the U.S. market when the euro declines in value against the U.S. dollar.
D) becomes more competitive in European markets when the euro declines in value against the U.S. dollar.
E) has no interest in whether the euro grows stronger or weaker versus the U.S. dollar unless its chief competitors are other companies located in countries whose currency is also the euro.

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A) a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage.
B) best accomplished with a multidomestic strategy as opposed to a global strategy.
C) feasible only with a global strategy; it can't be done with a multidomestic strategy.
D) unlikely to result in a competitive advantage.
E) nearly always the easiest and most sure-fire way to build competitive advantage in trying to compete successfully in foreign markets.

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A) Gaining wider access to attractive country markets
B) Gaining better access to scale economies in production and/or marketing
C) Filling competitively important gaps in their technical expertise and/or knowledge of local markets
D) Greater ability to employ a global strategy (as opposed to a multicountry strategy)
E) Sharing distribution facilities and dealer networks, thus mutually strengthening their access to buyers

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A) Try to change the local market to better match the way the company does business elsewhere
B) Be prepared to modify aspects of the company's business model to accommodate local circumstances
C) Prepare to compete on the basis of low price
D) Stay away from those emerging markets where it is impractical to modify the company's business model to accommodate local circumstances
E) All of these

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A) To gain access to new customers
B) To strengthen its capability to employ vertical integration strategies, especially those that involve partial integration (building positions in selected stages of the industry's value chain)
C) To achieve lower costs and enhance the firm's competitiveness
D) To capitalize on company competencies and capabilities
E) To spread business risk across a wider geographic market base

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B

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Answered by ExamLex AI

A multidomestic strategy and a global strategy are two different approaches to international business operations. Multidomestic Strategy: - In a multidomestic strategy, a company customizes its products and marketing strategies to meet the specific needs and preferences of each local market. This means that the company operates as a collection of independent subsidiaries, each with its own decision-making authority and product adaptation. - Pros: This approach allows the company to be highly responsive to local market conditions and consumer preferences. It can also help the company to build strong relationships with local customers and stakeholders. - Cons: However, this approach can lead to higher production and marketing costs due to the need for customization and adaptation in each market. It can also result in a lack of consistency in branding and product offerings across different markets. Global Strategy: - In a global strategy, a company aims for standardization and consistency in its products, marketing, and operations across different markets. This means that the company operates with a centralized decision-making authority and a focus on economies of scale. - Pros: This approach can lead to cost savings through economies of scale in production and marketing. It also allows for a consistent brand image and product offering, which can help to build a strong global presence. - Cons: However, a global strategy may overlook the specific needs and preferences of local markets, leading to potential challenges in meeting customer demands and competing with local competitors. In conclusion, the choice between a multidomestic strategy and a global strategy depends on various factors such as the nature of the industry, the company's resources and capabilities, and the characteristics of the target markets. While a multidomestic strategy offers responsiveness and local market adaptation, a global strategy provides cost efficiencies and global brand consistency. Companies often need to find a balance between these two approaches to achieve success in international markets.

A) a "think global, act global" approach entails extensive strategy coordination across countries and a "think global, act local" approach entails little or no strategy coordination across countries.
B) the former aims at implementing the same business model worldwide whereas the latter aims at implementing customized business models to better match local market circumstances.
C) the "think global, act local" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions.
D) a "think global, act global" approach involves selling a mostly standardized product worldwide whereas a "think global, act local" approach entails selling products that are highly differentiated from country to country.
E) a "think global, act global" approach involves selling under a single brand name worldwide whereas a "think global, act local" approach entails utilizing multiple brands (typically one for each different country or group of neighboring countries) .

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A) Maintaining a national (one-country) production base and exporting goods to foreign markets
B) Global strategies keyed either to low-cost or differentiation
C) Franchising and licensing strategies
D) A multicountry strategy (where a company pursues a custom-tailored country-by-country approach in accordance with local competitive conditions and buyer tastes and preferences)
E) All of these

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A) it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country.
B) each of a company's country strategies is almost totally different from and unrelated to its strategies in other countries.
C) the plants located in different countries can be operated independent of one another, thus promoting greater achievement of scale economies.
D) it avoids host country ownership requirements and import quotas.
E) it eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.

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A) buyer-related activities (such as sales, advertising, after-sale service and technical assistance) need to take place close to buyers.
B) buyers demand short delivery times and/or high transportation costs make it uneconomical to operate from one or just a few locations.
C) it helps hedge against the risks of exchange rate fluctuations, supply disruptions, and adverse political developments.
D) there are diseconomies of scale in trying to operate from a single location.
E) All of these.

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A) being especially well suited to achieve scale economies.
B) being able to charge lower prices than rivals.
C) enabling a company to achieve first-mover advantages quickly and easily.
D) being able to leverage the company's technical know-how or patents without committing significant additional resources to markets that are unfamiliar, politically volatile, economically uncertain, or otherwise risky.
E) being able to achieve higher product quality and better product performance than with an export strategy.

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D

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A) To contribute needed understanding of local market conditions, local buying habits, local ways of doing business.
B) To run the local operations for the company.
C) To understand how "the system" works to detour the hazards of collaborative alliances with local companies.
D) To serve as conduits for the flow of information between the corporate office and local operations.
E) All of these.

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A) the leading companies compete for having the biggest share of the world market, but only occasionally compete head-to-head in different countries.
B) the markets in various countries are part of the world market and competitive conditions across country markets are strongly linked.
C) a company's overall market strength is the sum of its market shares in each country market where it has a presence.
D) the industry leaders are foreign companies; domestic companies are relegated to runner-up status.
E) a firm's overall competitive advantage is determined by the size of the competitive advantage it has in each of its profit sanctuaries.

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A) Overcoming language and cultural barriers
B) The amount of time required to build trust, effective communication, and coordination between allies
C) Developing mutually agreeable ways of dealing with key issues or differences
D) Making it harder to pursue a multidomestic strategy as compared to a global strategy
E) Suspicions about whether allies are being forthright in exchanging information and expertise

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