International Studies Test Review 6

8/11/2019 International Studies Test Review 6

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Your Results for: "Chapter Quiz" Print this page

Site Title: International Management: Managing

Across Borders and Cultures, 8/e

Book Title: International Management: Managing

Across Borders and Cultures, 8/e

Book Author: Deresky

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Chapter 6 > Chapter Quiz

Date/Time

Submitted:

May 20, 2013 at 3:46 AM (UTC/GMT)

Summary of Results

40% Correctof 30 Scored items:

12 Correct: 40%

18 Incorrect: 60%

3 questions not scored. 30 scored questions.More information about scoring

1.A company's choice of business or businesses in which to operate and the ways in

which it differentiates itself from its competitors is its ________.

Your Answer: vision

Correct Answer: strategy

2.What is a reactive reason for going international?

Your Answer: economies of scale

Correct Answer: trade barriers

3.What is a proactive reason for going international?

Your Answer: globalization of competitors

Correct Answer: incentives

4.Which reason would a company be exploiting if it wants to go international in order

to increase volume and to make the fullest use of its capital intensive

manufacturing equipment?

Your Answer: regulations and restrictionsCorrect Answer: economies of scale

5.What is the first step of a strategic management process?

Your Answer: Plans are made based on a strategic choice.

Correct Answer: The company establishes its mission.

Results for "Chapter Quiz" http://wps.prenhall.com/w

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6.Which element of the strategic management process would be considered part of

the implementation process?

Your Answer: choosing the strategy

Correct Answer: setting up controls and evaluation systems

7.Which element defines the function the company performs in society or its raison

d'etre?

Your Answer: objectives

Correct Answer: mission

8.Which of the following is a national risk with regard to strategic environmental

scanning?

Your Answer: nationalism

9.Which level of environmental analysis provides a broad assessment of significant

worldwide trends?

Your Answer: national

Correct Answer: multinational

10.When conducting environmental scanning, which step should immediately follow the

decision to enter global markets?

Your Answer: Select countries for entry.

Correct Answer: Select geographic regions to evaluate.

11.After the environmental assessment, the second major step in weighinginternational strategic options is called the ________.

Your Answer: environmental assessment

Correct Answer: internal analysis

12.In which stage of strategic formulation is a SWOT analysis most likely to be

included?


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Your Answer: competitive analysis

13.Which approach to world markets refers to the establishment of worldwide

operations and the development of standardized products and marketing?

Your Answer: globalization

14.What is perceived as the greatest benefit to using e-business as a way of expanding

into global business?

Your Answer: rapid entrance into new geographic markets

Correct Answer: expanded sales channels

15.Which entry strategy involves a company designing and constructing a facility

abroad and then relinquishing control to local management for a fee?

Your Answer: franchising

Correct Answer: turnkey operation

16.Strategic planning is the process by which a firm's managers evaluate the future

prospects of the firm and decide on appropriate strategies to achieve long-term

objectives.

Your Answer: True

17.Growth opportunities are a proactive reason for going international where

companies in mature markets in developed countries look for new opportunities in

emerging markets.

Your Answer: False

Correct Answer: True

18.The first step in the strategic management process involves defining and clarifying a

firm's mission and objectives.

Your Answer: True


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19.A company's overall objectives flow from the mission and guide the formulation of

international corporate strategy.

Your Answer: True

20.Financial objectives, on the global level, must take into account differing tax

regulations in various countries and how to minimize overall losses from exchange

rate fluctuations.

Your Answer: False


21.An environmental assessment determines which areas of the firm's operations

represent strengths or weaknesses.

Your Answer: TrueCorrect Answer: False

22.A resource-based view of the firm considers the unique capabilities of the firm

relative to those opportunities or threats for the target location.

Your Answer: True

23.A globalization approach to world markets is one where local markets are linked

together within a region allowing more local responsiveness and specialization.

Your Answer: False

24.Due to startup costs, using e-business for global expansion is usually limited to

MNCs.

Your Answer: False

25.Licensing is an entry strategy a company may use to test out an overseas market.

Your Answer: True

Correct Answer: False


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26.Contract manufacturing is usually undertaken when there is a cheaper source of

manufacturing overseas and involves contracting for the production of finished

goods or component parts.

Your Answer: True

27.Joint ventures involve an agreement by two or more companies to produce a

product or service together.

Your Answer: False


28.Distance from supplier countries is a critical environmental factor when a company

is exporting.

Your Answer: True

29.An international franchising agreement grants the rights to a firm in the host

country to either produce or sell a product, or both.

Your Answer: True

Correct Answer: False

30.Based on the research conducted by using more than 10,000 foreign entry activities

into China, researchers Pan and Tse concluded that managers tend to follow a

hierarchy of decision sequence in choosing an entry mode.

Your Answer: True

31.Explain the reactive and proactive reasons why a firm may look to expand

internationally.

Your Answer:

bl

Reactive reasons: Globalization of competitors- if left unchallenged, competitors

may get entrenched in foreign markets.

Trade barriers- some countries' restrictive barriers make exports to foreign markets

too expensive.

Regulations and restrictions- some companies will seek out less restrictive foreign

operating environments than their home countries.

Customer demands- response to customer demands or a solution to logistic

problems.

Proactive reasons:


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Economies of scale- achieving world-scale volume.

Growth opportunities- looking for growth opportunities in emerging markets

Resource access and cost savings- availability of raw materials, labor costs, etc.

Incentives- governments sometimes provide tax exemptions, tax holidays, loans

etc.

32. Describe the various steps involved in the strategic management process. List thesteps involved in the strategic planning process and the strategic implementationprocess.

Your Answer:

bl

Steps in the strategic management process: It consists of two phases- the planning

phase and the implementation phase.

Planning phase involves the following steps:

(1) Define/clarify mission and objectives.

(2) Assess environment for threats, opportunities.

(3) Assess internal strengths and weaknesses.

(4) Consider alternative strategies using competitive analysis.(5) Choose Strategy

Implementation phase involves the following steps:

(1) Implement strategy through complementary structure, systems, and

operational processes.

(2) Set up controls and evaluation systems to ensure success, feedback to

planning.

33.Analyze different strategies and recommend the advantages and disadvantages of

each strategy for a company that decides to explore international markets.

Your Answer:bl

Entry Strategy Alternatives:

(1) Exporting:

Advantages: low risk; no long-term assets; easy market access.

Disadvantages: depends on distributor.

(2) Licensing:

Advantages: no asset ownership risk; fast market access; avoids regs and tariffs.

Disadvantages: quality of licensee, appropriability of technology.

(3) Franchising:

Advantage: little investment riskDisadvantage: quality control

(4) Contract manufacturing/offshoring:

Advantages: limited cost and risk; short-term commitment.

Disadvantages: reliability and quality of local contractor; operational control, human

rights.

(5) Service sector outsourcing:

Advantages: lower employment costs.

Disadvantages: quality control

(6) Turnkey operations:


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Advantages: access to high skills and markets; revenue from skills and technology.

Disadvantages: domestic client acceptance; reliable infrastructure.

(7) Management contracts:

Advantage: low risk access.

Disadvantage: opportunity to gain long-term position.

(8) International joint ventures:

Advantages: insider access to market; share costs and risks; leverage partner's skill

base, etc.

Disadvantages: Strategic fit and complementarity of partner; ability to protect

technology; ability to share control; cultural adaptability of partners.

(9) Wholly owned subsidiaries:

Advantages: realize all revenues and control; global economies of scale; strategic

coordination; protect technology.

Disadvantages: Ability to get local acceptance; repatriation of profits.

(10) E-business:

Advantages: Rapid entry into new markets; relatively low risk.

Disadvantages: differences in business models, culture language and laws?)

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International Studies Test Review 6