BUS 303 Exam Questions with 100% Correct Answers

BUS 303 Exam Questions with 100% Correct Answers A framework that argues the opportunity for systematic enhancement of a company's core capabilities/competencies should be a key consideration in selecting foreign markets - The RAT-CAT Cycle A major driver of the fragmentation of company global value chains via foreign direct investment (FDI) - Globalization -24/7 operations from communication & transport technology Activities included in the definition of FDI - - Investment in physical assets to participate in active management and control of firm (i.e. to produce, market, conduct research, etc); usually defined as ownership of more than 10 percent to distinguish it from portfolio investment. An organizational solution that can give a company a competitive advantage when selling products or services to business customers that have operations in many countries around the world - **Global Account Management?** As companies internationalize in their early stages, does a regional geographic international structure come before or after the creation of an international division - International division is the common early stage of internalization Ashby's Law - -The sustainability of an organizational system (company) requires that the variety & complexity of its internal systems match that of its external environment -Complex international environments necessitate organizational flexibility and variety -Isomorphism: Theory that organizations adapt to resemble the dominant characteristics of their environment or major competitors (convergence) »"iso" (equal) + "morphic" (shape) Average percentage of foreign sales by US companies that are listed in the S&P500 Index of the largest - S&P500 46% Barriers to international trade that have increased recently in relative importance - Tariffs Barriers to market penetration that Japanese cosmetics companies encountered in the US - - "When they go overseas, this recognition is not automatic. You have to adjust your strategy." - Japan known for electronic and automotive industry, not makeup - Consumers aren't familiar with the brands - high distribution and operating costs (tend to sell via department stores, where training sales staff and acquiring counter space are costly endeavors) - Japanese and American women have sharply different makeup and skincare strategies (japanese care more about skin care) Changes Hilfiger made to its operations in Europe - -Entered into small boutiques -opened show rooms that are close to retailers and smaller stores that carry their product -Centralized distribution -changed store layout -changed style of clothes (got rid of clothes they sold in the US) Changes that led Burberry to modify its international licensing agreements around the world - - Burberry ended most of its global licensing agreements. These licensing agreements had caused Burberry's brand image in certain countries to not be in line with its overall company image. - The deals gave licensee's the power to sell products under the Burberry name and they often sold products that were not in line with Burberry's luxury brand image. - This take back of licensee agreements is driven because of the increase in consumers buying luxury goods online and with trips abroad, so it makes it more important for brands to control their image globally Characteristics of IBM's "postmultinational" organizational structure - Their center of gravity (sales, strategy, major operations) shifted outside the US -Global centers of expertise examples: purchasing & procurement unit is in China, HR tasks in the Philippines, back office financials in Brazil Common differences in interest between corporate headquarters and local subsidiaries of a multinational corporation - Implementing new products and procedures can be difficult for a multinational corporation because implementation may be the primary interest of corporate headquarters but local subsidiaries are concerned about appearing profitable. Implementation can be costly and deter local subsidiaries because they are concerned about the effects on their profit. Common way for multinational companies to shift profit to countries with low taxes - Corporate tax differentials Competitive advantages of multinational companies in competition with local firms - they possess: -Economies of scale -Ability to arbitrage national differences (e.g. regulatory) -Global resource base (techno, skills) -International experiential knowledge -Upgrading capabilities learning, "innovation blowback"