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MNGT 4800 Test 3 (Auburn), Strategic management exam 3
Questions with 100% Correct Answers
Globalization - ANSWER Process of closer integration and
exchange between different countries and peoples worldwide,
made possible by falling trade and investment barriers,
advances in telecommunications, and reductions in
transportation costs.
Integration-responsiveness framework - ANSWER Strategy
framework that juxtaposes the pressure an MNE faces for cost
reductions and local responsiveness to derive four different
strategies to gain and sustain competitive advantage when
competing globally: international strategy, localization strategy,
global-standardization strategy, and transnational strategy.
Local responsiveness - ANSWER The need to tailor product and
service offerings to fit local consumer preferences and host-
country requirements; generally entails higher cost.
International strategy - ANSWER Strategy that involves
leveraging home-based core competencies by selling the same
products or services in both domestic and foreign markets;
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advantageous when the MNE faces low pressures for both local
responsiveness and cost reductions.(harley-davidson, rolex,
starbucks)
Localization strategy - ANSWER Strategy pursued by MNEs that
attempts to maximize local responsiveness, with the intent that
local consumers will perceive them to be domestic companies;
strategy arises out of the combination of high pressure for local
responsiveness and low pressure for cost reductions; also called
a multi-domestic strategy.(bridgestone)
Global-standardization strategy - ANSWER Strategy attempting
to reap significant economies of scale and location economies
by pursuing a global division of labor based on wherever best-
of-class capabilities reside at the lowest cost.(infosys, lenovo,
siemens)
Global strategy - ANSWER A firm's strategy to gain and sustain a
competitive advantage when competing agains other foreign
and domestic companies around the world.
Transnational strategy - ANSWER Strategy that attempts to
combine the benefits of a localization strategy (high local-
responsiveness) with those of a global-standardization strategy
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(lowest cost position attainable); sometimes called
glocalization.(ABB, Bertelsmann P&G)
Foreign direct investment (FDI) - ANSWER A firm's investments
in value-chain activities abroad.
Globalization hypothesis - ANSWER Assumption that consumer
needs and preferences throughout the world are converging
and thus becoming increasingly homogenous.
Liability of foreignness - ANSWER Additional costs of doing
business in an unfamiliar cultural and economic environment,
and of coordinating across geographic distances.
Multinational enterprise (MNE) - ANSWER A company that
deploys resources and capabilities in the procurement,
production, and distribution of goods and services in at least
two countries
Strategy implementation - ANSWER 1. only way to realize the
values of competitive strategies
2.key to gaining and sustaining competitive advantage.
MNGT 4800 Test 3 (Auburn), Strategic management exam 3
Questions with 100% Correct Answers
Globalization - ANSWER Process of closer integration and
exchange between different countries and peoples worldwide,
made possible by falling trade and investment barriers,
advances in telecommunications, and reductions in
transportation costs.
Integration-responsiveness framework - ANSWER Strategy
framework that juxtaposes the pressure an MNE faces for cost
reductions and local responsiveness to derive four different
strategies to gain and sustain competitive advantage when
competing globally: international strategy, localization strategy,
global-standardization strategy, and transnational strategy.
Local responsiveness - ANSWER The need to tailor product and
service offerings to fit local consumer preferences and host-
country requirements; generally entails higher cost.
International strategy - ANSWER Strategy that involves
leveraging home-based core competencies by selling the same
products or services in both domestic and foreign markets;
,2|Page
advantageous when the MNE faces low pressures for both local
responsiveness and cost reductions.(harley-davidson, rolex,
starbucks)
Localization strategy - ANSWER Strategy pursued by MNEs that
attempts to maximize local responsiveness, with the intent that
local consumers will perceive them to be domestic companies;
strategy arises out of the combination of high pressure for local
responsiveness and low pressure for cost reductions; also called
a multi-domestic strategy.(bridgestone)
Global-standardization strategy - ANSWER Strategy attempting
to reap significant economies of scale and location economies
by pursuing a global division of labor based on wherever best-
of-class capabilities reside at the lowest cost.(infosys, lenovo,
siemens)
Global strategy - ANSWER A firm's strategy to gain and sustain a
competitive advantage when competing agains other foreign
and domestic companies around the world.
Transnational strategy - ANSWER Strategy that attempts to
combine the benefits of a localization strategy (high local-
responsiveness) with those of a global-standardization strategy
, 3|Page
(lowest cost position attainable); sometimes called
glocalization.(ABB, Bertelsmann P&G)
Foreign direct investment (FDI) - ANSWER A firm's investments
in value-chain activities abroad.
Globalization hypothesis - ANSWER Assumption that consumer
needs and preferences throughout the world are converging
and thus becoming increasingly homogenous.
Liability of foreignness - ANSWER Additional costs of doing
business in an unfamiliar cultural and economic environment,
and of coordinating across geographic distances.
Multinational enterprise (MNE) - ANSWER A company that
deploys resources and capabilities in the procurement,
production, and distribution of goods and services in at least
two countries
Strategy implementation - ANSWER 1. only way to realize the
values of competitive strategies
2.key to gaining and sustaining competitive advantage.
