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| 1 | |
The return that a firm makes on its invested capital is its profitability. |
| | A) | True |
| | B) | False |
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| 2 | |
A firm's support activities may be a critical factor in a firm's competitive advantage. |
| | A) | True |
| | B) | False |
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| 3 | |
The skills within a firm that competitors cannot easily match or imitate are the firm's core competencies. |
| | A) | True |
| | B) | False |
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| 4 | |
Attaining economies of scale increases a firm's unit costs and increases its profitability. |
| | A) | True |
| | B) | False |
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| 5 | |
The advantage of a strong international strategy is that even if competitors do emerge, it is unlikely that they will have sufficient resources to outflank the firm. |
| | A) | True |
| | B) | False |
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| 6 | |
A firm's ____________ is defined as the actions that managers take to attain the goals of the firm. |
| | A) | action plan |
| | B) | mission |
| | C) | objective |
| | D) | strategy |
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| 7 | |
To increase profitability a firm |
| | A) | must have higher sales |
| | B) | must lower costs |
| | C) | must create more value |
| | D) | must raise prices |
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| 8 | |
Which of the following is not true about value creation? |
| | A) | A company can create value by lowering costs. |
| | B) | A company can create value by making the product more attractive. |
| | C) | A company can create value by developing a strategic plan. |
| | D) | A company can create value when customers are willing and able to pay a higher price for its offerings. |
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| 9 | |
According to Michael Porter, the two basic strategies for creating value and attaining a competitive advantage in an industry are |
| | A) | differentiation and low cost |
| | B) | differentiation and production |
| | C) | low cost and focus |
| | D) | focus and production |
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| 10 | |
The strategy, operations and organization of the firm must all be consistent with each other if the firm is to attain a competitive advantage and garner superior profitability. "Operations" here means: |
| | A) | manufacturing |
| | B) | logistics |
| | C) | production |
| | D) | value creation activities |
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| 11 | |
Which of the following is not a primary activity? |
| | A) | production |
| | B) | customer service |
| | C) | logistics |
| | D) | marketing and sales |
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| 12 | |
The _______ includes the organizational structure, control systems, and culture of the firm. |
| | A) | information systems function |
| | B) | company infrastructure |
| | C) | human resources function |
| | D) | logistics function |
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| 13 | |
Which of the following is NOT one of the reasons firms that operate internationally are able to increase profitability and the rate of profit growth? |
| | A) | They can expand the market for domestic product offerings. |
| | B) | They face less competition by entering or dominating foreign markets. |
| | C) | They can leverage skills developed in foreign operations. |
| | D) | They can realize greater economies of scale by serving an expanded global market. |
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| 14 | |
Location economies are: |
| | A) | The economies in the nations in which a company conducts its international business. |
| | B) | The economies achieved by keeping as many administrative tasks as possible at the headquarters location of a firm. |
| | C) | The economies achieved by performing value creation activities in the optimal location regardless of transportation costs or trade barriers. |
| | D) | The economics achieved by performing value creation activities in the optimal location, transportation costs and trade barriers permitting. |
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| 15 | |
The systematic reduction in production costs that have been observed to occur over the life of a product is called |
| | A) | location economies |
| | B) | the value creation curve |
| | C) | the experience curve |
| | D) | learning effects |
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| 16 | |
To successfully leverage skills developed at the subsidiary level, firms should do all of the following except |
| | A) | have the humility to recognize that value skills that lead to lead to competencies can arise anywhere within the firm's global network. |
| | B) | develop skills at the headquarters and transfer them to the subsidiary level. |
| | C) | act as facilitators to transfer valuable skills within the firm. |
| | D) | have a process for identifying when valuable new skills have been created in a subsidiary. |
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| 17 | |
Firms that expand globally can increase their _____________ by entering new markets, lowering costs, adding value to their product offering, and exploiting the experience curve. |
| | A) | competitive advantage |
| | B) | strategic advantage |
| | C) | profitability |
| | D) | global structure |
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| 18 | |
_______ exist(s) when the tastes and preferences of consumers in different nations are similar, if not identical. |
| | A) | homogenous needs |
| | B) | global consumers |
| | C) | globalization |
| | D) | universal needs |
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| 19 | |
_________________ arise from national differences in consumer tastes, infrastructure, accepted business practices and host country demands. |
| | A) | Cultural differences in products |
| | B) | Location economies |
| | C) | Pressures for local responsiveness |
| | D) | Learning effects |
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| 20 | |
Where major competitors are based in low-cost locations, where there is persistent excess capacity, and where consumers are powerful and face low switching costs |
| | A) | there is intense pressure for cost reductions |
| | B) | there is minimal pressure for cost reductions |
| | C) | there is moderate pressure for cost reductions |
| | D) | pressure for cost reductions is non-existent |
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| 21 | |
A firm must balance the pressures for cost reduction pressures for local responsiveness. The result is generally a choice among: |
| | A) | global standardization, localization, transnational or international |
| | B) | global harmonization, thinking globally and acting locally |
| | C) | domestic, multi-domestic and global |
| | D) | globalization, nationalization and privatization |
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| 22 | |
When a firm focuses on cost reductions through a variety of efforts including economies of scale, with little customization of products, the firm uses which kind of strategy? |
| | A) | international |
| | B) | global standardization |
| | C) | localization |
| | D) | transnational |
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| 23 | |
When a firm focuses on meeting the customers' tastes and preferences, even if it means losing out on some economies of scale and some duplication of efforts, the firm uses which kind of strategy? |
| | A) | international |
| | B) | global standardization |
| | C) | localization |
| | D) | transnational |
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| 24 | |
When a firm tries to simultaneously achieve low costs and differentiate its product offering across geographic markets, the firm is uses which kind of strategy? |
| | A) | international |
| | B) | global standardization |
| | C) | localization |
| | D) | transnational |
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| 25 | |
A firm that is selling a product that serves universal needs, but that does not face significant competition is probably following a(n) _______ strategy. |
| | A) | international |
| | B) | localization |
| | C) | global standardization |
| | D) | transnational |
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