GMS 522 Chapter 1 Test with Questions and
100% Correct Answers
Globalization of markets - ✔✔The convergence of buyer preferences in
markets around the world.
Globalization of production - ✔✔The dispersal of production activities to
locations around the world that are low cost or high quality producers.
Drivers of globalization (4) - ✔✔1. Market factors
2. Cost factors
3. Environmental factors
4. Competitive factors
Market factors of globalization (4) - ✔✔1. Global consumers that need the
same product in multiple countries.
2. Globalization of distribution channels
3. Transferrability of marketing ideas to multiple countries (e.g. brand names and
advertising appeals)
4. Cross-border retail alliances
Cost factors of globalization (4) - ✔✔1. Avoiding cost inefficiencies and
duplicated efforts
2. Economies of scale from longer production runs
3. Economies of scope - spread costs over several product lines
, 4. Outsourcing
Environmental factors of globalization (4) - ✔✔1. Reduced global barriers,
rapid technological evolution
2. Successive rounds of multilateral trade negociations under GATT/WTO
3. Internet and other communication technologies
4. Changes in government policies (e.g. China's Go Out policy of the late 1990s)
Competitive factors of globalization (3) - ✔✔1. Firms may need to enter new
markets in order to match the moves of competitors.
2. Firms may need to enter new markets to follow major customers.
3. Firms may expand abroad to reduce the impact of competition from foreign
firms in their domestic market.
Dreher's KOF Index (3) - ✔✔Measures globalization based on three
dimensions:
1. Economic integration: trade and investment flows
2. Political integration: diffusion of gov't policies (no. of embassies, no. of peace
keeping missions, etc.)
3. Social integration: flow of ideas and movement of people.
Examples of backlash against globalization (6) - ✔✔1. Street demonstrations in
Seattle attempt to shut down WTO meeting.
2. Protests at the World Economic forum meeting in Davos, Switzerland in 2000.
100% Correct Answers
Globalization of markets - ✔✔The convergence of buyer preferences in
markets around the world.
Globalization of production - ✔✔The dispersal of production activities to
locations around the world that are low cost or high quality producers.
Drivers of globalization (4) - ✔✔1. Market factors
2. Cost factors
3. Environmental factors
4. Competitive factors
Market factors of globalization (4) - ✔✔1. Global consumers that need the
same product in multiple countries.
2. Globalization of distribution channels
3. Transferrability of marketing ideas to multiple countries (e.g. brand names and
advertising appeals)
4. Cross-border retail alliances
Cost factors of globalization (4) - ✔✔1. Avoiding cost inefficiencies and
duplicated efforts
2. Economies of scale from longer production runs
3. Economies of scope - spread costs over several product lines
, 4. Outsourcing
Environmental factors of globalization (4) - ✔✔1. Reduced global barriers,
rapid technological evolution
2. Successive rounds of multilateral trade negociations under GATT/WTO
3. Internet and other communication technologies
4. Changes in government policies (e.g. China's Go Out policy of the late 1990s)
Competitive factors of globalization (3) - ✔✔1. Firms may need to enter new
markets in order to match the moves of competitors.
2. Firms may need to enter new markets to follow major customers.
3. Firms may expand abroad to reduce the impact of competition from foreign
firms in their domestic market.
Dreher's KOF Index (3) - ✔✔Measures globalization based on three
dimensions:
1. Economic integration: trade and investment flows
2. Political integration: diffusion of gov't policies (no. of embassies, no. of peace
keeping missions, etc.)
3. Social integration: flow of ideas and movement of people.
Examples of backlash against globalization (6) - ✔✔1. Street demonstrations in
Seattle attempt to shut down WTO meeting.
2. Protests at the World Economic forum meeting in Davos, Switzerland in 2000.
