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STR 581: Ch 7: Strategies Competing in
International Marketing
What are reasons that companies expand into foreign markets? - โ โ 1. to gain access to new customers
- to achieve lower costs
- to gain access to low cost production
Companies are often motivated to enter foreign markets to _____. - โ โ 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 - โ โ
- advantages for specific value chain activities
- strong economic conditions
- favorable political conditions
Spurring market growth in a domestic market can translate into an international competitive advantage owing to which of the following? - โ โ increasing innovation and quality improvements
What are elements of factor conditions for production? - โ โ 1. availability of raw materials
- cost of labor
Natural-resource companies move into foreign markets to ____. - โ โ 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. - โ โ false
Companies typically move into foreign markets to _____. - โ โ exploit their core competencies
Countries with which characteristics present advantages for becoming principal production sites? - โ โ 1. relaxed government regulations
- close proximity to suppliers
- lower labor costs
Creating a strategy for entering an international market can be more difficult than entering a domestic market because _____. - โ โ buyer preferences in foreign markets force companies to customize their products
Governments wishing to create a favorable business climate for foreign companies will typically ____. - โ โ seek advise from business leaders
What are examples of demand conditions? - โ โ 1. relative size of the market
- growth potential
- domestic buyers' needs and wants
Elements of a country's infrastructure that can contribute to factor conditions include _____. - โ โ
- communication
- banking systems
- transportation
Different country environments require companies to customize their approaches to which of the following? - โ โ 1. management
- organization
- 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 ____. - โ โ economic risk
A strong domestic currency can create an unfavorable exchange rate shift for domestic companies because _____. - โ โ domestic manufacturing becomes less competitive with foreign plants
Currency exchange rates can pose a risk for businesses because they ____. - โ โ 1. can change by more than 20% a year
- vary unpredictability
3.affect a company's profit
For domestic manufacturers, positive aspect of a weak domestic currency include _____. - โ โ 1. reduced domestic demand for foreign made goods
- 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. - โ โ customize products and services
A strong domestic currency tends to ____. - โ โ 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 ____. - โ โ currency exchange rate
True or false: cultural difference are a major source of the cross-country variations that affect buyer preferences. - โ โ true
One of the five primary strategic options a company can use to expand into a foreign market is to ____. - โ โ maintain a domestic production base while exporting goods
The strategic option of home-based production and export allows a company to do what? - โ โ 1. minimize its direct investment in foreign countries
- limit its involvement in foreign markets
A strong domestic currency can create an unfavorable exchange rate shift for domestic companies because ______. - โ โ domestic manufacturing becomes less competitive with foreign plants
In which of the following situations a company's export strategy may fail? - โ โ 1. When domestic manufacturing costs are higher than those of foreign competitors
- when shipping costs are exorbitant
- when foreign countries impose tariffs on imports
The biggest risk a company assumes with a licensing strategy is that ____. - โ โ 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? - โ โ 1. licensing foreign firms to produce and distribute the company's products abroad
- establishing a subsidiary in a foreign market
- relying on joint ventures with foreign companies
McDonald's, 7-Eleven, and Hilton Hotels have all entered the international market by using ____. - โ โ franchising strategies
Joint ventures are likely to fail when what occurs? - โ โ 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? - โ โ 1. avoid the risks of a Greenfield venture
- gain access to local distribution channels
- 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. - โ โ greenfield
A company that expands into a foreign market by pursuing the option of entering into a strategic alliance with a foreign partner can ___. - โ โ 1. achieve cost savings
- share technological know how
- share distribution facilities
An international strategy is a company's strategy for competing in two or more ______ simultaneously. - โ โ countries
A joint venture can hamper a country's goals for global market leadership by fostering ____. - โ โ too much dependence on a foreign market
A company that wishes to control all aspects of its operation when it expands into foreign markets should establish a _____. - โ โ Wholly owned subsidiary
Companies that employ a multi domestic strategy attempt to meet buyer needs by ____. - โ โ offering different products and services in different countries
Which two issues do companies commonly encounter when undergoing international expansion? - โ โ 1. the demand to customize products to suit local preferences
- 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? - โ โ their competitive advantage
Another way to define the concept of multi domestic strategy is as a _____. - โ โ think local, act local approach
Car manufacturers often employ a multi domestic approach and allow local manager to market the vehicles according to which of the following? - โ โ 1. cultural preferences
- competitive conditions
- buyer tastes
What are drawbacks of a multi domestic strategy? - โ โ 1. it won't help a company build a single international competitive advantage
- it can raise production and distribution costs
An international strategy is a company's strategy for competing in two or more ____ simultaneously. - โ โ countries
A think local, act local strategy gives local managers the decision making capability to do which of the following? - โ โ 1. focus competitive efforts
- address market needs
Which of the following can be inhibited by a multi domestic strategy? - โ โ 1. the transfer of company technological know how
A transnational strategy is a ____ approach. - โ โ think global, act local
A transnational strategy can enable a company to do which of the following? - โ โ leverage subsidiary skills and capabilities
Focusing on a limited number of locations can increase a company's competitive advantage when ____.
- โ โ 1. a large learning curve is associated with a particular task
- manufacturing costs are lover in a certain area
One strategy associated with limiting the number of locations is to open a customer service center in a specific country in order to ____. - โ โ cultivate close relationships with important clients
A company that distributes its activities across multiple locations can seek which advantages? - โ โ
- providing customers with timely service and technical support
- lowering distribution costs
- reducing the risks of fluctuating exchange rates
If significant economies of scale exist, a company that concentrated on a limited number of locations can do what? - โ โ achieve major cost savings
Companies that focus on certain locations can benefit from which of the following? - โ โ 1. better activities coordination
- superior resources
- well-trained personnel
Which factors make dispersing a company's activities competitively important? - โ โ 1. the threat of supply interruptions
- major customers in areas without low cost production
- trade barriers to importing manufactured goods
To leverage its capabilities and increase its competitive advantage, an international company can _____.
- โ โ 1. share a brand name or other valuable competitive asset with all its stores
- transfer technological know how to its international operations
A company's products may have little value in certain foreign market locations because _____. - โ โ
- buyer preference and lifestyles very from country to country
- local brands may remain very popular no matter how well a competing brand is regarded internationally
A company trying to gain advantages over domestic rivals by shifting production from a plant in one county to a plant in another to profit from exchange rate flections is using cross-border ____. - โ โ coordination
One strategy associated with limiting the number of locations is to open a customer service center in a specific country in order to _____. - โ โ cultivate close relationships with important clients
What are reasons a company would share a valuable competitive asset with its international locations? - โ โ 1. to increase its global market share
- to attract customers
True or false: Cross-market subsidization can be a powerful competitive weapon for companies operation in numerous markets. - โ โ true
A company may find cross-border resource sharing or transfers of capabilities fail to translate into a competitive advantage because _____. - โ โ a rival firm in a foreign country market has superior resources and technology
One of the ways companies can compete profitably in a developing country market is to ____. - โ โ tailor the packaging and product quantity to local preferences
Which of the following is a way by which a company can successfully compete in a developing country market as shown y Japan's Suzuki when it entered India? - โ โ change the local market to match the company's core operations
True or false: One way a domestic company can successfully compete against a global business giant is by exploiting shortcomings in the global company's local distribution networks. - โ โ true
A domestic company can defeat against expanding international companies through which methods? - โ โ 1. pursuing mergers and acquisitions
- employing a rapid-growth strategy
If it is impractical for a company to adapt to the situation in a developing-country market, the company should _____. - โ โ avoid the market
