81 test bank for global marketing foreign entry

Test Bank for Global Marketing Foreign Entry, Local Marketing, and Global Management 5th Edition Johansson Multiple Choice Questions - Page (p 34) The fundamental rationale for the existence of international trade is based upon the principle of: A comparative advantage B absolute advantage C political advantage D economic necessity (p 35) The theory of comparative advantage is extended by Porter's concept of: A the international product cycle B the circular flow of innovation C the diamond of national advantage D economic Darwinism (p 38) Which of the following is most consistent with the concept of the learning organization? A International product cycle B Diamond of national advantage C New trade theory D Circular flow of innovation (p 38) The "country-of-origin" phenomenon seems to have a particularly strong impact upon perceptions of: A quality B style C price D content (p 34-35) For which of the following advantages is location fixed? A Low cost labor B Services C Knowledge workers D Raw materials (p 34) If a company's strength is not firm-specific, then its competitive advantage is usually: A less imitable B less vulnerable to competition C less sustainable D not subject to change (p 35) According to the _, an innovating country will eventually import the products it created A international product cycle B principle of absolute advantage C principle of comparative advantage D circular flow of innovation model (p 39) Given the intense global competition in many markets, there is an evidence of: A worsening perceptions of American quality B greatly improved perceptions of Japanese quality C worsening perceptions of German quality D a convergence of quality perceptions (p 35-36) Which of the following provides a hope for a nation seeking to develop new skills and gain/renew competitive advantages? A The cycle of competitive advantage B The diamond of national advantage C The cycle of absolute advantage D The circular flow of innovation (p 33) The America-First Corporation is preparing to "go global" by simultaneously entering several foreign markets To be successful, the firm must understand: A its competitive advantages in these markets B global compensation C import/export laws D electronic communication (p 35) The shift of focus of American industry from home entertainment products such as television and VCRs to computer design is explained by: A the diamond of national advantage model B the circular flow of innovation model C the cycle of absolute advantage model D the international product cycle model (p 35) A country's absolute advantage may eventually be erased by foreign competitors through the operation of: A political pressure B the international product cycle C cartels D free trade zones (p 37) According to Porter, as the manufacturing costs increase in a country's industry: A the country becomes less competitive B the country can still remain competitive in that industry C the country will begin focusing on other industries D the country will shift its focus to trading in standardized commodities (p 41) A resource-based strategy defines the firm in terms of: A the products it markets B the services it markets C the needs it seeks to satisfy D what it is capable of doing (p 34) A country which is more efficient/productive than all other nations with regard to a specific product or resource is said to have a(n): A comparative advantage B monopoly C absolute advantage D trade deficit (p 35) The United State's traditional concern with infrastructure gives it a favorable position in which of the following portions of Porter's diamond of national advantage? A Factor conditions B Demand conditions C Related and supporting industries D Firm strategy, structure, and rivalry (p 31) Nike and Reebok were the main competitors for sneakers in the international market in the 1980's, but lost some of their share by which other sneaker brand in the 1990s? A Puma B Adidas C Pony D U.S Keds (p 34) According to the 1981 Dunning study of comparative advantage, what advantage did the U.S have? A Technology of all kinds B Transportation equipment C Food products D Mechanical engineering (p 38) According to the _, a country can become efficient in the production of goods in which it starts with little or no comparative advantage A international product cycle B new trade theory C cycle of innovation D circular flow of innovation (p 35) One of the best examples of exceptions to the traditional international product cycle concept can be found in America's continuing dominance in the area of: A automobile production B home entertainment C computer design D textiles (p 33) The fundamental aim of business strategy is to create and maintain: A lower prices B efficient channels C a competitive advantage D production efficiency (p 34) After the 1981 Dunning study of comparative advantage, the advantage in _ has moved from Japan to other Asian countries A technology B transportation equipment C food products D textiles (p 41) One of the major goals of a knowledge-based organization would be to develop: A product advantages B firm-specific advantages C trade barriers D transferred advantages (p 40) A firm-specific advantage is synonymous with: A country-specific advantage B comparative advantage C location-specific advantage D differential advantage (p 40) The America-First Corporation has an unusually large number of patents for critical technological innovations This fact gives the company an important: A location specific advantage B comparative advantage C firm-specific advantage D advertising advantage (p 37) The development of high-technology areas such as Silicon Valley south of San Francisco can be best explained by: A international product cycle B new trade theory C cycle of innovation D circular flow of innovation 61 Free Test Bank for Global Marketing Foreign Entry, Local Marketing, and Global Management 5th Edition Johansson Multiple Choice Questions - Page (p 48) The America-First Corporation is attempting to identify the members of the strategic group it would confront in the Russian market This group would consist of firms whose resources and choice of target markets would: A mark them as potential allies B make them follow similar strategies C remove them from competitive concern D assist the firm's entry (p 48) Porter's "five forces" model emphasizes all of the following considerations EXCEPT: A rivalry B international law C substitutes D buyer power (p 53) Which of the following activities are LEAST likely to feature during the foreign entry phase? A Decision on what to offer B How a firm should enter aboard C Timing new product entries D Assessment of the market (p 51) The capability of a global firm to attack a competitor in several markets, and to defend a market by countering elsewhere is referred to as: A strategic intent B competitive repertoire C integrated competitive moves D leveraged local presence (p 48) The most obvious competitive force a firm considering entry into a new market must consider is the: A intensity of competitive rivalry between firms competing directly in that market B cost of distribution to that market C political system in that market D natural resources available in that market (p 45) Banks and brokerage houses link buyers and sellers across borders and provide information as part of their role as: A internalizers B market makers C transaction cost agents D market movers (p 53-54) A resource-based strategic perspective is most_appropriate in the: A foreign entry phase B local marketing phase C global management phase D both foreign entry and global management phases (p 54) With _, the focus shifts back to headquarters and the resource perspective A the foreign entry phase B global management C the local marketing phase D the location economy phase (p 53) During which phase of global marketing is assessment of the market, customer segments, and competitive offerings often done through informal methods and by independent middlemen? A Foreign entry phase B Local marketing phase C Foreign entry and local marketing phases D Global management phase (p 47) Changing the value chain by simplifying the entire flow from raw materials to the ultimate consumer is called: A industrialization B benchmarking C externalization D industrial rationalization (p 44) The America-First Corporation often employs licensing as a means of entering foreign markets This approach would be described as the: A internalization option B legalistic option C transference option D externalization option (p 49) Tariffs, regulations, and national security concerns have traditionally been designed to favor: A foreign entries B strategic groups C competitive rivals D domestic competitors (p 44) The America-First Corporation has decided to safeguard control of its firm-specific advantages as much as it can The firm will probably seek to enter foreign markets under a(n): A externalization option B decentralized option C internalization option D negotiated option (p 42) The America-First Corporation is considering how it can best transfer its marketing skills to foreign markets The firm should probably focus on: A extensive use of expatriates B transferring its best domestic talent to foreign markets C hiring/training local people D implement ethnocentric staffing policy (p 44) The possibility that licensing fees will not be collected and/or that foreign firms will utilize licensed technology for export is called: A dissipation B deception C demarcation D de-licensure (p 45) Collectively, transportation charges, sales taxes, and brokerage fees are called: A market makers B tariffs C transaction costs D trade barriers (p 42) Marketing skills are especially difficult to transfer abroad because of their: A intangibility B reliability upon technology C product-dependence D regulation under import legislation (p 52) As a true, global company, the America-First Corporation often starts price wars in selected markets to "occupy" rivals and conceal its entry into new markets This strategy is an example of: A integrated competitive moves B global advertising C strategic intent D leveraged local presence (p 52) The America-First Corporation has experienced problems in finding distributors and other intermediaries in Japan The Japanese have "institutionalized" Galbraith's concept of countervailing power in the form of: A buying cartels B supplier blocs C keiretsus D kabuki blocs (p 54) The global marketing manager will all of the following EXCEPT which one in order to achieve synergistic efficiency 1 A Borrow as much money as possible from foreign bankers so as to spread risk B Synchronize strategic moves in various countries C Standardize products and services D Coordinate activities and timing of new product entries (p 50) Porter's concern with buyer and supplier power relate to John Kenneth Galbraith's concept of: A monopoly B countervailing power C local control D cartel dislocation (p 49) The global financial turmoil at the end of the 90s led to: A deregulation, privatization, and global integration B a backlash in some countries against free markets C trading blocs which encouraged economic integration D removal of entry barriers for foreign firms (p 50) Due to differences in preferences, tastes, and habits, a foreign firm may be forced to develop strategies designed to compete with domestic producers of market-specific: A initiations B substitutes C reproductions D counterfeits (p 53-54) A resource-based strategic perspective is most appropriate in the: A foreign entry phase B local marketing phase C global management phase D both foreign entry and global management phases (p 45) As it seeks foreign opportunities, the America-First Corporation actively pursues forward and backward vertical integration The firm's approach is most consistent with the principle of: A decentralization B market-making C externalization D internalization (p 49) As a firm globalizes, its most direct competitors tend to be: A foreign entrants B domestic competitors C domestic cartels D domestic government-owned firms (p 43) Manufacturing companies need not investment in technology transfer since: A these factors often represent intangibles B the incentive to go abroad is not as strong C the final product embodies the advantages already D the results of these efforts can be uncertain (p 45) A firm is most likely to opt for an FDI strategy when: A it has strong domestic country-specific advantages B transportation costs to foreign markets are low C strong foreign country-specific advantages exist D good foreign middlemen are cheap and easily available (p 53) Unforeseen shifts in customer preferences, potential channel conflict, uncertainty about advertising effectiveness, and competitors' price cuts are managerial headaches during: A the foreign entry phase B the local marketing phase C both foreign entry and local marketing phases D the global management phase (p 42) Technology transfer is usually easiest for: A firms with marketing FSAs B manufacturers C service franchisers D the firms where the advantages are not embodied in the product (p 53) The typical market-based approach to strategy is most appropriate to which of the following phases of globalization? A The foreign entry phase B The global management phase C The local marketing phase D Both the local marketing and global management phase (p 49) All of the following tends to be true for foreign entrants in a global market EXCEPT: A foreign entrants tend to be the most direct competitors of a globalizing firm B foreign companies can often be analyzed as a separate strategic group 3 C the similarity of their strategic situation that tends to suggest similar strategies D foreign companies from inside a trading area have a disadvantage over other foreign competitors (p 46) The switch to a resource-based strategy is most consistent with: A the externalization concept B the value chain concept C the benchmarking concept D the just-in-time concept (p 48) Competitors with roughly similar resources and similar target markets comprise a: A cartel B competitive barrier C strategic group D strategic alliance (p 52) Coca-Cola's experience of capturing market share from Pepsi in Russia is an example of: A using financial resources as a competitive tool B using global advertising as a competitive tool C technology innovations overpowering global presence D global price-wars Free Text Questions (p 35-36) According to Porter's _, a nation's competitive advantage may be based on factor conditions, demand conditions, related and supporting industries, and/or firm strategy, structure, and rivalry Answer Given diamond of national advantage (p 44) In terms of relative ease and degree of commitment, the three alternative modes of foreign entry available to the firm would range from _ at the low-end, through _ to the most demanding mode, _ Answer Given pure export; licensing; foreign direct investment (p 42) A major difficulty in transferring marketing skills abroad is that these factors often represent _, skills that reside in people and are not _ in the product itself Answer Given intangibles; "embodied" (p 42-43) The America-First Corporation enjoys internationally known brands and a reputation for impeccable service The firm has decided to expand its firm-specific advantages into the international arena What problems are likely to be encountered? How can the firm meet these challenges? Answer Given Marketing based firm-specific advantages are often intangible in nature and may not be easily transferred America-First's brands may attract foreign customers who are seeking the quality of service it stands for The firm must be certain that these foreign customers will not be disappointed Local nationals, however, may not be as dedicated to the provision of such services as the firm's domestic employees America-First should provide careful cultural preparation for domestic managers sent to foreign countries Local nationals must be carefully selected and trained to ensure consistency of quality The firm may opt for a franchising strategy to achieve this goal (p 41) Briefly describe the concepts of knowledge-based and resource-based capability How these concepts relate to the traditional emphasis upon customer orientation? Answer Given According to the knowledge-based concept, a firm's true strength is founded upon the know-how, skills, and experiences of the company and its employees The ability of the firm to survive and prosper depends upon its ability to learn and change This dynamic knowledge base is the primary asset of the firm Accordingly, a resource-based strategy defines the firm in terms of what it can offer what it is capable of instead of current products, services, markets, or the needs it might like to address Simply knowing the customer is not enough-traditional market orientation is only a start The firm must first know what its strengths are then seek out those markets in which those strengths can be profitably employed for the benefit of both the firm and the customer (p 41) _ defines the firm not in terms of the products or services it markets, or in terms of the needs it seeks to satisfy, but in terms of what it is capable of Answer Given Resource-based strategy (p 37-38) Briefly explain the basic tenets of new trade theory Answer Given New trade theory postulates that advanced technology centers are likely to arise around strong research universities and innovative new firms, local labor tends to develop skills required by those industries, and similar companies will be attracted by these advantages Krugman pointed out that such conditions favored the appearance of a variety of firms capable of producing a variety of products Over time, experience gained from diversification would tend to lead to specialization as each producer creates firm-specific advantages from learning by doing The deliberate attempt to elevate this process to the stages of a strategy for the continual "rebirth" of the firm is at the height of the learning organizations ability to stay competitive (p 48) _ identifies five sources of competitive pressures on the firm in a given industry: rivalry, new entrants, _, buyer power, and supplier power Answer Given Porter's "five forces" model; substitutes (p 37-38) According to _ theorists such as Krugman, _ leads to _ and the creation of firm-specific advantages that come from learning by doing Answer Given new trade; differentiation; specialization (p 35) Describe the relationship between free trade and the ability of nations to benefit from comparative advantage What role does technology transfer playing this process? Answer Given Free trade is a necessary condition for the exercise of any nation's comparative advantage In the absence of free trade, each nation is forced to be more selfsufficient and less capable of developing the specialization that creates comparative advantages Over time, large markets may attract local manufacturing investments by foreign-owned MNCs The technology transfers which often accompany such investments provide a "second-best" solution by creating a dynamic facet for a nation's CSAs Eventually, shifting CSAs will tend to favor the expansion of free trade (p 44-45) The America-First Corporation is preparing to enter international trade How can the firm "match" its skills to potential foreign markets? Briefly describe the primary modes of entry available to the firm Why would AmericaFirst be concerned with choosing between an externalization or internalization strategy? Answer Given America-first should carefully assess its firm-specific advantages to determine which markets it can best serve and evaluate country-specific advantages to determine from which countries this should be done The firm may choose from pure exporting, licensing, or direct foreign investment as the primary vehicles through which their expertise may be "internalized" in foreign markets In pure exporting, the product is simply transferred to a distributor appointed in the target country Licensing involves the use of contractual arrangements to transfer some ownership advantages to an enterprise in a foreign country Foreign direct investment would require the firm to spend funds to create subsidiary firms in other nations The use of licensing in an "externalization" strategy could dissipate the firm's advantages America-First may retain more control under the "internalization" options of exportation or direct foreign investment (p 36-37) The America-First Corporation, a major innovator in the computer industry from its inception, is still the dominant firm in computer design and development worldwide How can the firm's continued dominance of this highly competitive industry be explained given the concept of the international product cycle? Answer Given The "best" explanation is probably offered by Porter's National "Diamond" Theory which explains competitive advantage through the dynamic interaction of factor conditions, demand conditions, related or supporting industries, and firm strategy, structure, and rivalry Typically, an innovator achieves dominance through superiority in such factors as labor or infrastructure Over time, vigorous competition from rivals can strengthen the innovator and encourage growth and improvement among supplier firms Sophisticated and demanding domestic customers will further sharpen competitive skills Porter's theory holds that an innovating firm can maintain dominance by emphasizing that factor in which it has the greatest current advantage while continually seeking to improve in all areas By developing new skills and reviewing competitive advantages, a firm may remain competitive even as its manufacturing costs rise This runs counter to the IPC in that a country can remain competitive if it renews itself and develops new skills (p 35) The _ was initially proposed by _ in 1966, who used it to demonstrate how the manufacturing of new products in the United States shifted over time to new locations overseas and in the process affected trade patterns Answer Given International Product Cycle; Raymond Vernon (p 46) The value chain is the _ sequence of operations undertaken by the firm "Deconstructing" the value chain is equivalent to _ Answer Given "internalized"; externalization (p 37) Explain the differences between Porter's diamond theory, and the International Product Cycle theory Which of these are more applicable to the present day economies of the world? Answer Given Porter's diamond is a dynamic theory, showing how over time a nation can build up and sustain its competitive advantage in an industry Vernon's IPC on the other hand was used to demonstrate how the manufacturing of new products in the United States shifted over time to new locations overseas and in the process affected trade patterns Porter's diamond implies that a country can remain competitive in an industry even as its manufacturing costs rise Thus, the diamond goes counter to the original IPC theory While the IPC explains the "hollowing out" of a nation's industrial base, with manufacturing moving to low-wage countries, Porter's diamond suggests that competitive rivalry and capable business management can help nations develop new skills and renew their competitive advantages While Vernon's IPC concludes that advanced nations will trade for standardized commodities and focus on innovation and new industries ("get out of televisions, and focus on computers"), Porter's diamond shows how the creation of favorable conditions can make a nation stay competitive in a given industry for a long time ("automobiles is what we best") Actually, in most economies of the world, both tendencies are at work simultaneously (p 46-47) Briefly discuss the concept of "industrial rationalization" How does this concept relate to other concepts discussed in the text? Answer Given Following a strategy of industrial rationalization, a firm would seek to simplify the entire flow, from raw materials to ultimate consumer Such an effort would require the firm to recognize the reality of hypercompetition and to engage in benchmarking across the competitive spectrum The resulting learning organization would seek to develop FSAs that can strengthen resource-based strategies that can expand, protect, and leverage its competitive strengths in all of its markets It will expand its competitive repertoire, initiative integrated competitive moves, and enhance its ability to rely upon internalized strength to avoid the problems associated with the international product cycle (p 33-34) The traditional justification for a country's exports is the principle of _ advantage-which may be derived from either _ or _ advantages Answer Given competitive; country-specific; firm-specific (p 44-46) Why is transaction framework relevant to the international marketer? How does this theory relate to FSAs, integration, and the choice between an internalization or externalization strategy? Answer Given Transaction costs, the costs incurred in completing a transaction between a buyer and seller, are at the heart of marketing activities If these "market-making" costs are too high, trade is prohibited In an effort to lower transaction costs to an acceptable level, firms employ specialists in those areas in which they lack experience or expertise Over time, some firms develop firm-specific advantages in market-making activities which allow the company to practice forward or backward integration Vertical integration is a form of internalization strategy which allows the firm to maximize both savings and control An externalization strategy, as expressed in the use of agents, brokers, or other external specialists, allows cost savings at the expense of control An internalized strategy surfaces as pure exporting or direct foreign investment in international trade Licensing is a form of externalization that may be taken into foreign markets (p 44) Firms which opt for either the pure export mode or foreign direct investment are practicing the strategy of _ Answer Given internalization (p 33-34) Briefly describe the concept of country-specific advantage and differentiate between absolute and relative advantages Why should the marketer be concerned with firm specific advantages and barriers to entry? Answer Given Country-specific advantages traditionally referred to natural resource and labor factors that allowed a particular nation to produce specific goods more efficiently than could rival nations The concept has been broadened to include advantages in market knowledge/proximity, legal/commercial expertise, and transportation specialization A country would enjoy an absolute advantage only if it can produce all products more efficiently than other nations It is more likely that a nation will be able to produced one, or a few product(s) that is, exhibit a relative advantage with respect to other nations Firm-specific advantages help the marketer in identifying those products in which his/her firm can be most competitive/profitable The existence of tariffs or other trade barriers may cause the marketer to eliminate the option of exporting in favor of licensing know-how (externalization) or investing in local production (internalization)  ... most appropriate in the: A foreign entry phase B local marketing phase C global management phase D both foreign entry and global management phases (p 45) As it seeks foreign opportunities, the... foreign entry phase B the local marketing phase C both foreign entry and local marketing phases D the global management phase (p 42) Technology transfer is usually easiest for: A firms with marketing. .. theory C cycle of innovation D circular flow of innovation 61 Free Test Bank for Global Marketing Foreign Entry, Local Marketing, and Global Management 5th Edition Johansson Multiple Choice Questions