MNC Strategy Exam 1 Study Guide With
Correct Solutions 2024
MNE .- .correct .answer.Must .have ."substantial .direct .investment" .in .foreign .countries. .
Must .have ."active .management" .of .overseas .operations
Influence .| .Statistics .according .to .the .UN: .- .correct .answer.Over .130 .million .firms.
Foreign .affiliates .of .MNEs .generated .approx. .$8trillion .in .value.
Traditional .Motivations .- .correct .answer.Secure .key .supplies .(tangible .products,
.services)
Market-seeking .behavior .(unique .skill, .core .competence)
Access .low-cost .factors .of .production
Secure .key .supplies .- .correct .answer.Aluminum .companies .seeking .Bauxite.
Prior .to .the .1980s: .- .correct .answer.The .product .life .cycle(PLC) .theory .could .explain
.much .of .a .company's .motivation .to .internationalize.
After .the .1980s .the .PLC .does .not .explain .much .about .the .reasoning .for
.internationalization .today.
Emerging .Motivations .- .correct .answer.Increasing .scale .economies, .R&D .investments,
.and .a .shortened .PLC.
The .MNE's .global .scanning .and .learning .capabilities-alternatives .regarding .labor,
.technology, .etc.
Increased .competitive .positioning .allowing .cross-subsidization .of .markets
Cross-subsidization .of .markets .- .correct .answer.Using .profits .of .a .subsidiary .in .one
.market .to .subsidize .an .unprofitable .subsidiary .in .another.
Prerequisites .for .Becoming .an .MNE: .- .correct .answer.Must .have .motivation .to .invest
.overseas.
Must .have .strategic .competencies/ownership-specific .advantages. .(finances)
Must .have .internal .organizational .capabilities. .(ability .to .coordinate, .distribution)
, Process .of .Internationalization .- .correct .answer.The .Learning .Process .of .foreign .market
.entry:
0. .Company .did .research, .ready .to .commit.
i.Firm .makes .initial .commitment .of .resources.
ii. .Gains .knowledge .of .local .market, .customers, .etc.
iii. .Improved .ability .to .evaluate .current .operations .and .opportunities.
iv. .Able .to .make .additional .investments .thus .increasing .effectiveness.
Four .evolutionary .stages .(mentalities) .of .internationalization: .- .correct .answer.1.
.International .Mentality
2. .Multinational .Mentality
3. .Global .Mentality
4. .Transnational .Mentality
International .Mentality .- .correct .answer.Overseas .operations .seen .as ."outposts."
Heavily .influenced .by .the .PLC.
Multinational .Mentality .- .correct .answer.Overseas .operations .increase .in .importance .as
.sales/profits .increase.
Products/technology .modified .to .suit .specific .foreign .mkt.
Global .Mentality .- .correct .answer.Reduce .inefficiency .in .multinational .mentality .by
.producing .for .a ."world .market".
Assumes .national .tastes .are .somewhat .similar.
Requires .increase .levels .of .coordination.
Transnational .Mentality .- .correct .answer.Emerged .due .to .the .need .to .be .locally
.responsive .while .developing .global .products.
Forces .for .Global .Integration .and .Coordination .| .Statement .- .correct .answer.Globalization
.is .the .continuation .of .a .trend .that .began .over .100 .years .ago.
Forces .Leading .to .Change .- .correct .answer.Economies .of .Scale
Economies .of .Scope
Factor .Costs
Liberalization .of .World .Trade .Agreements
Economies .of .Scale .(volume) .- .correct .answer.Achieved .through .high-volume
.production.
Use .of .large-batch .or .continuous-process .technologies.
Production .levels .exceed .domestic .sales.
Economies .of .Scope .(variety) .- .correct .answer.Possible .due .to .improved
.communications .and .transportation .networks.
Rise .in .use .of .large .trading .companies .(e.g.,Panasonic).
Correct Solutions 2024
MNE .- .correct .answer.Must .have ."substantial .direct .investment" .in .foreign .countries. .
Must .have ."active .management" .of .overseas .operations
Influence .| .Statistics .according .to .the .UN: .- .correct .answer.Over .130 .million .firms.
Foreign .affiliates .of .MNEs .generated .approx. .$8trillion .in .value.
Traditional .Motivations .- .correct .answer.Secure .key .supplies .(tangible .products,
.services)
Market-seeking .behavior .(unique .skill, .core .competence)
Access .low-cost .factors .of .production
Secure .key .supplies .- .correct .answer.Aluminum .companies .seeking .Bauxite.
Prior .to .the .1980s: .- .correct .answer.The .product .life .cycle(PLC) .theory .could .explain
.much .of .a .company's .motivation .to .internationalize.
After .the .1980s .the .PLC .does .not .explain .much .about .the .reasoning .for
.internationalization .today.
Emerging .Motivations .- .correct .answer.Increasing .scale .economies, .R&D .investments,
.and .a .shortened .PLC.
The .MNE's .global .scanning .and .learning .capabilities-alternatives .regarding .labor,
.technology, .etc.
Increased .competitive .positioning .allowing .cross-subsidization .of .markets
Cross-subsidization .of .markets .- .correct .answer.Using .profits .of .a .subsidiary .in .one
.market .to .subsidize .an .unprofitable .subsidiary .in .another.
Prerequisites .for .Becoming .an .MNE: .- .correct .answer.Must .have .motivation .to .invest
.overseas.
Must .have .strategic .competencies/ownership-specific .advantages. .(finances)
Must .have .internal .organizational .capabilities. .(ability .to .coordinate, .distribution)
, Process .of .Internationalization .- .correct .answer.The .Learning .Process .of .foreign .market
.entry:
0. .Company .did .research, .ready .to .commit.
i.Firm .makes .initial .commitment .of .resources.
ii. .Gains .knowledge .of .local .market, .customers, .etc.
iii. .Improved .ability .to .evaluate .current .operations .and .opportunities.
iv. .Able .to .make .additional .investments .thus .increasing .effectiveness.
Four .evolutionary .stages .(mentalities) .of .internationalization: .- .correct .answer.1.
.International .Mentality
2. .Multinational .Mentality
3. .Global .Mentality
4. .Transnational .Mentality
International .Mentality .- .correct .answer.Overseas .operations .seen .as ."outposts."
Heavily .influenced .by .the .PLC.
Multinational .Mentality .- .correct .answer.Overseas .operations .increase .in .importance .as
.sales/profits .increase.
Products/technology .modified .to .suit .specific .foreign .mkt.
Global .Mentality .- .correct .answer.Reduce .inefficiency .in .multinational .mentality .by
.producing .for .a ."world .market".
Assumes .national .tastes .are .somewhat .similar.
Requires .increase .levels .of .coordination.
Transnational .Mentality .- .correct .answer.Emerged .due .to .the .need .to .be .locally
.responsive .while .developing .global .products.
Forces .for .Global .Integration .and .Coordination .| .Statement .- .correct .answer.Globalization
.is .the .continuation .of .a .trend .that .began .over .100 .years .ago.
Forces .Leading .to .Change .- .correct .answer.Economies .of .Scale
Economies .of .Scope
Factor .Costs
Liberalization .of .World .Trade .Agreements
Economies .of .Scale .(volume) .- .correct .answer.Achieved .through .high-volume
.production.
Use .of .large-batch .or .continuous-process .technologies.
Production .levels .exceed .domestic .sales.
Economies .of .Scope .(variety) .- .correct .answer.Possible .due .to .improved
.communications .and .transportation .networks.
Rise .in .use .of .large .trading .companies .(e.g.,Panasonic).
