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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.
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What are reasons that companies expand into foreign markets? - โ โ 1. to gain access to new customers
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
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
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
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
Elements of a country's infrastructure that can contribute to factor conditions include _____. - โ โ
Different country environments require companies to customize their approaches to which of the following? - โ โ 1. management
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
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
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
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
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
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
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
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
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
What are drawbacks of a multi domestic strategy? - โ โ 1. it won't help a company build a single international competitive advantage
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
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 ____.
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
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
Which factors make dispersing a company's activities competitively important? - โ โ 1. the threat of supply interruptions
To leverage its capabilities and increase its competitive advantage, an international company can _____.
A company's products may have little value in certain foreign market locations because _____. - โ โ
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
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
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