STR 581: Ch 7: Strategies Competing in International Marketing Questions And Answers Rated A+ New Update Assured Satisfaction

What are reasons that companies expand into foreign markets? - Answer-1. to gain access to new customers 2. to achieve lower costs 3. to gain access to low cost production Companies are often motivated to enter foreign markets to _____. - Answer-take advantage of new resources and capabilities A company may find it easier to operate in one country than in others because of the country's - Answer- 1. advantages for specific value chain activities 2. strong economic conditions 3. favorable political conditions Spurring market growth in a domestic market can translate into an international competitive advantage owing to which of the following? - Answer-increasing innovation and quality improvements What are elements of factor conditions for production? - Answer-1. availability of raw materials 2. cost of labor Natural-resource companies move into foreign markets to ____. - Answer-access supplies of raw material more cost effectively True or false: Strategic alliances are more frequently used by firms from North America than from Asia or Latin America. - Answer-false Companies typically move into foreign markets to _____. - Answer-exploit their core competenciesCountries with which characteristics present advantages for becoming principal production sites? - Answer-1. relaxed government regulations 2. close proximity to suppliers 3. lower labor costs Creating a strategy for entering an international market can be more difficult than entering a domestic market because _____. - Answer-buyer preferences in foreign markets force companies to customize their products Governments wishing to create a favorable business climate for foreign companies will typically ____. - Answer-seek advise from business leaders What are examples of demand conditions? - Answer-1. relative size of the market 2. growth potential 3. domestic buyers' needs and wants Elements of a country's infrastructure that can contribute to factor conditions include _____. - Answer-1. communication 2. banking systems 3. transportation Different country environments require companies to customize their approaches to which of the following? - Answer-1. management 2. organization 3. strategy Which of the following are ways by which governments can discourage the import of specific items? - Answer-1. setting up import quotas 2. imposing a ban on importation 3. enacting burdensome procedures and requirements regarding customs inspection for foreign goodsBuilding production facilities in which countries presents a competitive advantage because of low-wage labor? - Answer-1. india 2. China in terms of a country's business climate, the instability or weakness of a national government is a type of ____. - Answer-political risk Which of the following are policies that governments adopt to stimulate business investment? - Answer- 1. providing government sponsored job training 2. offering low cost business loans A country's desirability as a low cost manufacturing location can vary frequently depending on shifts in the country's _____. - Answer-currency exchange rate A weak domestic currency can result in a favorable exchange rate shift for domestic companies by ____. - Answer-reducing the cost advantage for foreign companies To discourage foreign companies from locating manufacturing facilities in a country, the country's government can do which of the following? - Answer-1. require partial ownership of the facilities by local companies or investors 2. make a new facility's compliance with local environmental regulations very costly 3. provide government financial assistance to domestic companies In terms of a country's business climate, a country's inflation rate and level of deficit spending are types of ____. - Answer-economic risk A strong domestic currency can create an unfavorable exchange rate shift for domestic companies because _____. - Answer-domestic manufacturing becomes less competitive with foreign plants Currency exchange rates can pose a risk for businesses because they ____. - Answer-1. can change by more than 20% a year 2. vary t a company's profit For domestic manufacturers, positive aspect of a weak domestic currency include _____. - Answer-1. reduced domestic demand for foreign made goods 2. lower prices for domestic products To compete in an international market, a basic decision companies must make is whether to _____ to accommodate cross-country difference in buyer tastes and preferences. - Answer-customize products and services A strong domestic currency tends to ____. - Answer-weaken the cost competitiveness of domestic companies A country's desirability as a low-cost manufacturing location can vary frequently depending on shifts in the country's ____. - Answer-currency exchange rate True or false: cultural difference are a major source of the cross-country variations that affect buyer preferences. - Answer-true One of the five primary strategic options a company can use to expand into a foreign market is to ____. - Answer-maintain a domestic production base while exporting goods The strategic option of home-based production and export allows a company to do what? - Answer-1. minimize its direct investment in foreign countries 2. limit its involvement in foreign markets A strong domestic currency can create an unfavorable exchange rate shift for domestic companies because ______. - Answer-domestic manufacturing becomes less competitive with foreign plants In which of the following situations a company's export strategy may fail? - Answer-1. When domestic manufacturing costs are higher than those of foreign competitors 2. when shipping costs are exorbitant3. when foreign countries impose tariffs on imports The biggest risk a company assumes with a licensing strategy is that ____. - Answer-it will lose control over the use of its technological know how What are among the five primary strategic options for a company wishing to enter international markets? - Answer-1. licensing foreign firms to produce and distribute the company's products abroad 2. establishing a subsidiary in a foreign market 3. relying on joint ventures with foreign companies McDonald's, 7-Eleven, and Hilton Hotels have all entered the international market by using ____. - Answer-franchising strategies Producing goods in domestic plants and exporting them is considered ___. - Answer-A conservative way to enter a foreign market A company that wishes to control all aspect of its operation when it expands into foreign markets should establish a ____. - Answer-wholly owned subsidiary a strong domestic currency tends to ____. - Answer-weaken the cost of competitiveness of domestic companies A company seeking to establish a subsidiary in a foreign country may choose to establish a Greenfield venture it an internal startup ____. - Answer-1. can successfully compete with local rivals 2. costs less than an acquisition 3. can gain good distribution access Exporting goods may be a successful strategic option if the company ___. - Answer-can maintain its cost competitiveness at home The strategic option of acquiring a foreign partner gives a company expanding into a foreign market the advantage of ___. - Answer-1. familiarity with local government regulations2. intimate knowledge of local buying habits and consumer preferences 3. already-established relationships with distributors A domestic company wishing to enter the international market may choose to license its products or services to a foreign company for which reason? - Answer-The company has no resources to enter a foreign market directly The primary problem that franchisors face over foreign-market expansion is the lack of ____ control. - Answer-quality Joint ventures are likely to fail when what occurs? - Answer-a local partner's expertise is less valuable than expected Acquiring a foreign company as a means of entering a foreign market can allow a business to do which of the following? - Answer-1. avoid the risks of a Greenfield venture 2. gain access to local distribution channels 3. build supplier relationships An internal startup or a(n) ____ venture is a subsidiary business that is established by setting up the entire operation from the ground up. - Answer-greenfield A company that expands into a foreign market by pursuing the option of entering into a strategic alliance with a foreign partner can ___. - Answer-1. achieve cost savings 2. share technological know how 3. share distribution facilities An international strategy is a company's strategy for competing in two or more ______ simultaneously. - Answer-countries A joint venture can hamper a country's goals for global market leadership by fostering ____. - Answertoo much dependence on a foreign marketA company that wishes to control all aspects of its operation when it expands into foreign markets should establish a _____. - Answer-Wholly owned subsidiary Companies that employ a multi domestic strategy attempt to meet buyer needs by ____. - Answeroffering different products and services in different countries Which two issues do companies commonly encounter when undergoing international expansion? - Answer-1. the demand to customize products to suit local preferences 2. the cost effectiveness of providing a standardized product globally What do companies commonly risk losing when they develop joint ventures with companies in a foreign country? - Answer-their competitive advantage