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Exam 7: International Strategy: Creating Value in Global Markets

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Question 41

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Arbitrage opportunities are simple trading opportunities and therefore account for little of the success Walmart experiences.

A) True
B) False

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Question 42

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According to studies by Rugman and Verbeke, most of the 500 largest companies in the world are global.

A) True
B) False

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Question 43

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Reverse innovation occurs when a company develops a product that meets the needs of a developed country and then adapts it to the needs of the developing country.

According to Michael Porter, firms that have experienced intense domestic competition are

The __________ entail the creation of a third-party legal entity, whereas the __________ do not.

A key tenet of a transnational strategy is improved adaptation to all competitive situations as well as flexibility by capitalizing on communication and knowledge flows throughout the organization.

Industries in which proportionally more value is added in upstream activities are more likely to benefit from a global strategy than those in which more value is added downstream (closer to the customer).

What agreement entails the creation of a third-party legal entity?

The laws and the enforcement of laws associated with the protection of intellectual property rights represent a significant currency and management risk to multinational firms.

Theodore Levitt, a marketing strategist, argued that people around the world are willing to sacrifice preferences in product features, functions, and design for lower prices and lower quality.

With regard to factor conditions, the pool of resources that a firm (or nation) has is much more important than the speed and efficiency with which these resources are deployed.

A U.S. firm expands into China and Canada at exactly the same sales volume. The physical distance is the only factor that affects the true distance between the countries.

The need to attain economies of scale encourages multinational firms to operate under a multidomestic strategy.

When considering the export decision, firms should not partner with local distributors because many foreign markets are nationally regulated.

According to the textbook, _______________ economic integration has progressed as a faster pace than _________ economic integration.

Customer needs and interests are becoming increasingly divergent worldwide, according to Theodore Levitt.

International expansion can extend the life cycle of a product that is in its maturity stage in the company home country.

When the GE wind energy business tapped into world-wide talent, it was able to expand using a(n) _________________ strategy.

In the quest to achieve competitive advantage in global markets, competitive pressures require that firms do what they can to _______ unit costs so that consumers will not perceive their product and service offerings as too expensive.

As in the case of Siebel Systems (now part of Oracle) , elements of a global strategy may facilitate the competitive advantage of differentiation by