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STR 581: Chapter 7 - Strategies for Competing in International Marketing, Exams of Business Strategy

A comprehensive overview of strategies for competing in international markets. It explores various reasons why companies expand into foreign markets, including gaining access to new customers, achieving lower costs, and accessing low-cost production. The document also delves into the factors that influence a country's attractiveness as a production site, such as factor conditions, demand conditions, and government policies. It examines the different strategic options for entering international markets, including exporting, licensing, franchising, joint ventures, and wholly owned subsidiaries. The document also discusses the challenges and risks associated with international expansion, such as cultural differences, currency exchange rate fluctuations, and political risks.

Typology: Exams

2024/2025

Available from 01/21/2025

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STR 581: Ch 7: Strategies Competing in
International Marketing
What are reasons that companies expand into foreign markets? - โœ” โœ” 1. to gain access to new
customers
2. to achieve lower costs
3. to gain access to low cost production
Companies are often motivated to enter foreign markets to _____. - โœ” โœ” 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 - โœ” โœ”
1. advantages for specific value chain activities
2. strong economic conditions
3. favorable political conditions
Spurring market growth in a domestic market can translate into an international competitive advantage
owing to which of the following? - โœ” โœ” increasing innovation and quality improvements
What are elements of factor conditions for production? - โœ” โœ” 1. availability of raw materials
2. cost of labor
Natural-resource companies move into foreign markets to ____. - โœ” โœ” 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. - โœ” โœ” false
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STR 581: Ch 7: Strategies Competing in

International Marketing

What are reasons that companies expand into foreign markets? - โœ” โœ” 1. to gain access to new customers

  1. to achieve lower costs
  2. to gain access to low cost production

Companies are often motivated to enter foreign markets to _____. - โœ” โœ” 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 - โœ” โœ”

  1. advantages for specific value chain activities
  2. strong economic conditions
  3. favorable political conditions

Spurring market growth in a domestic market can translate into an international competitive advantage owing to which of the following? - โœ” โœ” increasing innovation and quality improvements

What are elements of factor conditions for production? - โœ” โœ” 1. availability of raw materials

  1. cost of labor

Natural-resource companies move into foreign markets to ____. - โœ” โœ” 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. - โœ” โœ” false

Companies typically move into foreign markets to _____. - โœ” โœ” exploit their core competencies

Countries with which characteristics present advantages for becoming principal production sites? - โœ” โœ” 1. relaxed government regulations

  1. close proximity to suppliers
  2. lower labor costs

Creating a strategy for entering an international market can be more difficult than entering a domestic market because _____. - โœ” โœ” buyer preferences in foreign markets force companies to customize their products

Governments wishing to create a favorable business climate for foreign companies will typically ____. - โœ” โœ” seek advise from business leaders

What are examples of demand conditions? - โœ” โœ” 1. relative size of the market

  1. growth potential
  2. domestic buyers' needs and wants

Elements of a country's infrastructure that can contribute to factor conditions include _____. - โœ” โœ”

  1. communication
  2. banking systems
  3. transportation

Different country environments require companies to customize their approaches to which of the following? - โœ” โœ” 1. management

  1. organization
  1. 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 ____. - โœ” โœ” economic risk

A strong domestic currency can create an unfavorable exchange rate shift for domestic companies because _____. - โœ” โœ” domestic manufacturing becomes less competitive with foreign plants

Currency exchange rates can pose a risk for businesses because they ____. - โœ” โœ” 1. can change by more than 20% a year

  1. vary unpredictability

3.affect a company's profit

For domestic manufacturers, positive aspect of a weak domestic currency include _____. - โœ” โœ” 1. reduced domestic demand for foreign made goods

  1. 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. - โœ” โœ” customize products and services

A strong domestic currency tends to ____. - โœ” โœ” 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 ____. - โœ” โœ” currency exchange rate

True or false: cultural difference are a major source of the cross-country variations that affect buyer preferences. - โœ” โœ” true

One of the five primary strategic options a company can use to expand into a foreign market is to ____. - โœ” โœ” maintain a domestic production base while exporting goods

The strategic option of home-based production and export allows a company to do what? - โœ” โœ” 1. minimize its direct investment in foreign countries

  1. limit its involvement in foreign markets

A strong domestic currency can create an unfavorable exchange rate shift for domestic companies because ______. - โœ” โœ” domestic manufacturing becomes less competitive with foreign plants

In which of the following situations a company's export strategy may fail? - โœ” โœ” 1. When domestic manufacturing costs are higher than those of foreign competitors

  1. when shipping costs are exorbitant
  2. when foreign countries impose tariffs on imports

The biggest risk a company assumes with a licensing strategy is that ____. - โœ” โœ” 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? - โœ” โœ” 1. licensing foreign firms to produce and distribute the company's products abroad

  1. establishing a subsidiary in a foreign market
  2. relying on joint ventures with foreign companies

McDonald's, 7-Eleven, and Hilton Hotels have all entered the international market by using ____. - โœ” โœ” franchising strategies

Joint ventures are likely to fail when what occurs? - โœ” โœ” 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? - โœ” โœ” 1. avoid the risks of a Greenfield venture

  1. gain access to local distribution channels
  2. 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. - โœ” โœ” greenfield

A company that expands into a foreign market by pursuing the option of entering into a strategic alliance with a foreign partner can ___. - โœ” โœ” 1. achieve cost savings

  1. share technological know how
  2. share distribution facilities

An international strategy is a company's strategy for competing in two or more ______ simultaneously. - โœ” โœ” countries

A joint venture can hamper a country's goals for global market leadership by fostering ____. - โœ” โœ” 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 _____. - โœ” โœ” Wholly owned subsidiary

Companies that employ a multi domestic strategy attempt to meet buyer needs by ____. - โœ” โœ” offering different products and services in different countries

Which two issues do companies commonly encounter when undergoing international expansion? - โœ” โœ” 1. the demand to customize products to suit local preferences

  1. 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? - โœ” โœ” their competitive advantage

Another way to define the concept of multi domestic strategy is as a _____. - โœ” โœ” 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? - โœ” โœ” 1. cultural preferences

  1. competitive conditions
  2. buyer tastes

What are drawbacks of a multi domestic strategy? - โœ” โœ” 1. it won't help a company build a single international competitive advantage

  1. it can raise production and distribution costs

An international strategy is a company's strategy for competing in two or more ____ simultaneously. - โœ” โœ” countries

A think local, act local strategy gives local managers the decision making capability to do which of the following? - โœ” โœ” 1. focus competitive efforts

  1. address market needs

Which of the following can be inhibited by a multi domestic strategy? - โœ” โœ” 1. the transfer of company technological know how

A transnational strategy is a ____ approach. - โœ” โœ” think global, act local

A transnational strategy can enable a company to do which of the following? - โœ” โœ” leverage subsidiary skills and capabilities

Focusing on a limited number of locations can increase a company's competitive advantage when ____.

  • โœ” โœ” 1. a large learning curve is associated with a particular task
  1. 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 ____. - โœ” โœ” cultivate close relationships with important clients

A company that distributes its activities across multiple locations can seek which advantages? - โœ” โœ”

  1. providing customers with timely service and technical support
  2. lowering distribution costs
  3. 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? - โœ” โœ” achieve major cost savings

Companies that focus on certain locations can benefit from which of the following? - โœ” โœ” 1. better activities coordination

  1. superior resources
  2. well-trained personnel

Which factors make dispersing a company's activities competitively important? - โœ” โœ” 1. the threat of supply interruptions

  1. major customers in areas without low cost production
  1. trade barriers to importing manufactured goods

To leverage its capabilities and increase its competitive advantage, an international company can _____.

  • โœ” โœ” 1. share a brand name or other valuable competitive asset with all its stores
  1. transfer technological know how to its international operations

A company's products may have little value in certain foreign market locations because _____. - โœ” โœ”

  1. buyer preference and lifestyles very from country to country
  2. 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 ____. - โœ” โœ” coordination

One strategy associated with limiting the number of locations is to open a customer service center in a specific country in order to _____. - โœ” โœ” cultivate close relationships with important clients

What are reasons a company would share a valuable competitive asset with its international locations? - โœ” โœ” 1. to increase its global market share

  1. to attract customers

True or false: Cross-market subsidization can be a powerful competitive weapon for companies operation in numerous markets. - โœ” โœ” true

A company may find cross-border resource sharing or transfers of capabilities fail to translate into a competitive advantage because _____. - โœ” โœ” 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 ____. - โœ” โœ” 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? - โœ” โœ” 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. - โœ” โœ” true

A domestic company can defeat against expanding international companies through which methods? - โœ” โœ” 1. pursuing mergers and acquisitions

  1. 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 _____. - โœ” โœ” avoid the market