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BUS 187 - GLOBAL DIMENSIONS OF BUSINESS

EXAM 2 – Study Guide

Key Concepts (Multiple Choice and True/False) Note: We will have about 25-35 multiple choice and true/false questions in the Exam based on these topics

1. What is elastic and inelastic demand? 2. Advantages and Disadvantages of Exporting? 3. Identify why and how advertising and promotional strategies might vary among countries? 4. The choice of distribution strategy – long vs. short channel and its impact on pricing 5. Identify the different strategies for competing globally and their pros and cons. 6. What is an experience curve? Think of examples. 7. What is Diminishing returns to specialization 8. What are Fragmented retail systems and its impact on firms 9. What is a turnkey project. What are its pros and cons? 10. Communist Philosophy 11. Pull and Push Strategies 12. Relation of property rights and economic growth. 13. What is licensing. What are its pros and cons? 14. What is franchising. What are its pros and cons? 15. What does the term strategy mean. 16. Explain why and how a firm’s pricing strategy might vary among countries. 17. Evaluate the pros and cons of entering into strategic alliances. 18. What are Cross-Licensing Agreements 19. Explain the three basic decisions that firms contemplating foreign expansion must make: which markets

to enter; when to enter those markets; and on what scale. 20. Describe how the globalization of the world economy is affecting new-product development within the

international business firm. 21. What Are The Barriers to International Communication? 22. Different Pricing Strategies that International Business Managers can use. 23. How Do Regulations Influence Pricing? 24. Responsibilities of World Bank, International Monetary Fund and World Trade Organization 25. Explain a) theocratic law system, b) civil law system, c) contract law system and d) common law system 26. Globalization - Definition pros and criticisms 27. International Business 28. Multinational Enterprise 29. Importance of Antitrust laws in the United States 30. Explain the implications of the global monetary system for currency management and business strategy. 31. Ricardo's theory of comparative advantage 32. Understand how the political systems of countries differ 33. Ethnocentrism – what does it mean. How can it impact when doing business in a country. 34. The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 35. What is the Foreign Corrupt Practices Act 36. Understand the ethical issues faced by international businesses

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37. Explain the implications for management practice of national differences in political economy 38. Recognize how the economic systems of countries differ 39. Explain Deregulation and Privatization 40. What is FDI; various modes of FDI; Advantages and Disadvantages of various modes of FDI. 41. International Trade Theories – Comparative Advantage, Product Life Cycle 42. Hofstede’s dimensions of culture

43. PLEASE REVIEW ALL THE SEVEN QUIZZES. 44. PLEASE REVIEW EXAM 1

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Essay Question Study Guide Note: We will have about 3-5 essay questions in the Exam. It is best to use examples to explain your point

with the essay questions. Essay questions can be 8-10 sentences. You can always use bullets to explain your points

1. How do levels of economic development affect consumer behavior? What are the implications for marketing strategy?

Hint: Chapter 18 - Explain why it might make sense to vary the attributes of a product from country to country.

2. Explain briefly the regulatory influences on pricing.

Hint:- Chapter 18 - Explain why and how a firms pricing strategy might vary among countries.

3. Explain the relationship between first-mover disadvantages and pioneering costs.

Hint:- Chapter 15- Explain the three basic decisions that firms contemplating foreign expansion must make: which markets to enter; when to enter those markets; and on what scale.

4. Discuss strategic alliances. How successful are they? Why do firms form strategic alliances?

Hint:- Chapter 15- Evaluate the pros and cons of entering into strategic alliances.

5. Compare and contrast licensing agreements and franchising agreements.

Hint: - Chapter 15- Compare and contrast the different modes that firms use to enter foreign markets.

6. What are the three dimensions of organizational structure?

Hint:- Chapter 14- Describe the different organizational choices that can be made in an international business.

7. Explain the five reasons why a firm should decentralize its decision-making.

Hint: Chapter 14- Describe the different organizational choices that can be made in an international business.

8. Consider the firm in terms of a value chain. What is the difference between different types of activities? Provide examples of each.

Hint: Chapter 13 - 13-01 Explain the concept of strategy.

9. Describe the benefits of global expansion for firms.

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Hint: Chapter 13- Recognize how firms can profit by expanding globally.

10. Explain the concept of location economies.

Hint: Chapter 13 - Recognize how firms can profit by expanding globally.

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

Hint: Chapter 13- Understand how pressures for cost reductions and pressures for local responsiveness influence strategic choice.

12. What are the four basic strategies that firms use to compete in international markets?

Hint: Chapter 13- Identify the different strategies for competing globally and their pros and cons.

13. What type of firms favor the worldwide area structure and why? What are the disadvantages of this type of structure?

Chapter 14

FOLLOWING QUESTIONS WILL BE HELPUL WITH THE CONSULTING REPORT BUT WILL NOT BE INCLUDED IN EXAM 2.

14. Why is the role of education in a culture important to international companies?

Hint: Chapter 04- Identify the forces that lead to differences in social culture

15. Consider the importance of unspoken language. Why is it important to be familiar with the unspoken language of another culture?

Hint: Chapter 04 - Identify the forces that lead to differences in social culture

16. Discuss the benefits and costs of FDI from the perspective of a host country and from the perspective of the home country.

Hint: Chapter 08 - Describe the benefits and costs of FDI to home and host countries.

17. What is the connection between religion and ethical systems? Do they have any implications for business?

Hint: Chapter 04- Identify the forces that lead to differences in social culture.