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| 1 | |
Value is the difference between the costs of production and the value consumers perceive in its products or services. |
| | A) | True |
| | B) | False |
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| 2 | |
Only primary activities – not support activities – contribute to a competitive advantage. |
| | A) | True |
| | B) | False |
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| 3 | |
Core competence refers to skills within any firm that its competition cannot easily match or imitate. |
| | A) | True |
| | B) | False |
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| 4 | |
Firms that pursue a global standardization strategy concentrate on increasing profitability and profit growth, essentially following a low cost strategy on a global scale. |
| | A) | True |
| | B) | False |
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| 5 | |
To ensure success, firms should enter strategic alliances with companies within its supply chain but not with competitors. |
| | A) | True |
| | B) | False |
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| 6 | |
The ___________ of the firm must all be consistent with each other if it is to attain a competitive advantage and superior profitability. |
| | A) | location economies, local pressures for responsiveness, and domestic content requirements |
| | B) | strategy, operations, and organization |
| | C) | headquarters location, organization architecture, and operations management |
| | D) | organization culture, foreign tax policy, and support of expatriates |
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| 7 | |
_________________________ arise from performing a value creation activity in the optimal location for that activity, wherever in the world that may be, as long as transportation costs and trade barriers permit. |
| | A) | Geocentric economies |
| | B) | Global economies of scale |
| | C) | Location economies |
| | D) | Global web site economies |
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| 8 | |
_____________________ refers to the systematic reduction in production costs over the life of a product based on learning effects and economies of scale. |
| | A) | Total Quality Control |
| | B) | A sustainable competitive advantage |
| | C) | The experience curve |
| | D) | Location economy |
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| 9 | |
Which of the following is NOT one of the important considerations for leveraging subsidiary skills? |
| | A) | Ensuring that key subsidiaries have critical mass of managers who speak the language of the home country |
| | B) | Having the humility to recognize that competencies can arise from locations other than the central headquarters |
| | C) | Creating an effective incentive system |
| | D) | Management indentifying skills developed at the subsidiary level |
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| 10 | |
Products serve ______________________ when the tastes and preferences of consumers in different nations are similar if not identical. |
| | A) | local responsiveness |
| | B) | transnational needs |
| | C) | core competence demands |
| | D) | universal needs |
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| 11 | |
Pressures for local responsiveness arise from all of the following EXCEPT: |
| | A) | ways to cut production costs. |
| | B) | differences in customer tastes and preferences. |
| | C) | distribution channels. |
| | D) | host-government demands. |
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| 12 | |
__________________ imply that it may not be possible for a firm to realize the full benefits from economies of scale, learning effects, and location economies. |
| | A) | Nontariff trade barriers |
| | B) | Fluctuating foreign exchange rates |
| | C) | Global standardization strategies |
| | D) | Pressures for local responsiveness |
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| 13 | |
A localization strategy seeks to increase profitability by: |
| | A) | marketing local goods instead of imported ones. |
| | B) | brokering through strategic alliances with local partners. |
| | C) | customizing the firm’s products to match local tastes. |
| | D) | offering discounts and promotions to match local needs. |
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| 14 | |
Firms pursuing a transnational strategy are trying to: |
| | A) | move away from “brick and mortar” operations. |
| | B) | facilitate transborder trade with global partners. |
| | C) | maneuver competitors through host government support. |
| | D) | achieve low costs through location economies. |
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| 15 | |
To maximize the learning benefits of an alliance, the firm must: |
| | A) | apply knowledge transferences carefully. |
| | B) | seek third party protections against industrial espionage. |
| | C) | make use of new knowledge within its own organization. |
| | D) | shield inside knowledge as proprietary unless necessary. |
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