GMS522- Chapter 1-Test Questions
and Answers.
Foreign direct investment (FDI) and strategic alliances - Answer institutional arrangements
used by firms to penetrate foreign markets.
FDI - Answer a long-term capital investment in a new or existing foreign business
Strategic alliances - Answer two or more companies collaborating over the short to medium
term in order to achieve some mutually beneficial corporate objective
Global Marketing - Answer the systematic planning, coordination and implementation of the
firm's marketing activities across national borders
Global Marketing - Answer involves the implementation of marketing activities across national
borders, i.e. outside the firm's home country.
do inter- country differences make global marketing more/less challenging? - Answer inter-
country differences clearly make global marketing considerably more challenging for firms that
have historically focussed on their domestic markets
liability of foreignness - Answer a firm faces when operating outside its home market adds an
additional layer of complexity and risk to its marketing decisions
Global Marketing - Answer implies that the firm is conducting marketing activities in a number
of countries outside of its home market.
Global Marketer - Answer It does not have a specific requirement of the number of countries
it must operate in
Global Marketer - Answer One should note that a company does not need to market its
products in every country in the world to be considered a global marketing company.
According to the research published by the Journal of International Business Studies, where
does the vast majority of large firms generate most of their sales? - Answer In the home
region of the Triad (the USA, Japan and Western Europe),
What is necessary for the firm to engage in? - Answer systematic planning and coordination of
its activities in these foreign markets.
, How can the systematic planning and coordination be manifested? - Answer For example, the
sale of a standardized product in all international markets, the use of a consistent brand name
and advertising message across all foreign markets, or a coherent pricing strategy that must be
followed by all of the firm's subsidiary managers, regardless of geographic location.
What are similarities between domestic and global marketing? - Answer Both share a focus on
the satisfaction of consumer needs and the exchange of something of value
What does the cross-border nature of global marketing transactions adds? - Answer an
additional layer of complexity to the process of exchange and the satisfaction of customer
needs.
liability of foreignness - Answer inherent disadvantages that multinational firms face when
operating in a new host country
What does the foreign entity, the multinational firm face? - Answer additional costs which are
not borne by other firms which are indigenous to the host country
Foreign firms - Answer Are put a competitive disadvantage
Who do host governments favor? - Answer Local firms in the tendering of contracts
Who coined the term "liability of foreignness" - Answer Zaheer in 1995
liability of foreignness - Answer all of the additional costs multinationals must bear in order to
compete with local firms in a new host country
Economies of Scale - Answer the reduction in per unit cost of production as the firm expands
its level of output
Economies of Scale - Answer Longer production runs and increased output translate into a
lower cost per unit.
Economies of Scope - Answer reduced cost per unit as the firm spreads its total costs
(production, marketing and R&D) over a larger number of brands, product lines or target
markets
and Answers.
Foreign direct investment (FDI) and strategic alliances - Answer institutional arrangements
used by firms to penetrate foreign markets.
FDI - Answer a long-term capital investment in a new or existing foreign business
Strategic alliances - Answer two or more companies collaborating over the short to medium
term in order to achieve some mutually beneficial corporate objective
Global Marketing - Answer the systematic planning, coordination and implementation of the
firm's marketing activities across national borders
Global Marketing - Answer involves the implementation of marketing activities across national
borders, i.e. outside the firm's home country.
do inter- country differences make global marketing more/less challenging? - Answer inter-
country differences clearly make global marketing considerably more challenging for firms that
have historically focussed on their domestic markets
liability of foreignness - Answer a firm faces when operating outside its home market adds an
additional layer of complexity and risk to its marketing decisions
Global Marketing - Answer implies that the firm is conducting marketing activities in a number
of countries outside of its home market.
Global Marketer - Answer It does not have a specific requirement of the number of countries
it must operate in
Global Marketer - Answer One should note that a company does not need to market its
products in every country in the world to be considered a global marketing company.
According to the research published by the Journal of International Business Studies, where
does the vast majority of large firms generate most of their sales? - Answer In the home
region of the Triad (the USA, Japan and Western Europe),
What is necessary for the firm to engage in? - Answer systematic planning and coordination of
its activities in these foreign markets.
, How can the systematic planning and coordination be manifested? - Answer For example, the
sale of a standardized product in all international markets, the use of a consistent brand name
and advertising message across all foreign markets, or a coherent pricing strategy that must be
followed by all of the firm's subsidiary managers, regardless of geographic location.
What are similarities between domestic and global marketing? - Answer Both share a focus on
the satisfaction of consumer needs and the exchange of something of value
What does the cross-border nature of global marketing transactions adds? - Answer an
additional layer of complexity to the process of exchange and the satisfaction of customer
needs.
liability of foreignness - Answer inherent disadvantages that multinational firms face when
operating in a new host country
What does the foreign entity, the multinational firm face? - Answer additional costs which are
not borne by other firms which are indigenous to the host country
Foreign firms - Answer Are put a competitive disadvantage
Who do host governments favor? - Answer Local firms in the tendering of contracts
Who coined the term "liability of foreignness" - Answer Zaheer in 1995
liability of foreignness - Answer all of the additional costs multinationals must bear in order to
compete with local firms in a new host country
Economies of Scale - Answer the reduction in per unit cost of production as the firm expands
its level of output
Economies of Scale - Answer Longer production runs and increased output translate into a
lower cost per unit.
Economies of Scope - Answer reduced cost per unit as the firm spreads its total costs
(production, marketing and R&D) over a larger number of brands, product lines or target
markets
