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GEB 4890 Exam 2 Questions with Correct Answers
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GEB 4890 Exam 2 Questions with Correct Answers
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GEB 4890 Exam 2 Questions with Correct AnswersChapter 7 Correct Answer-
Identify and explain major reasons why companies expand into and
compete in foreign markets. Correct Answer-1. To gain access to new
customers.
2. To achieve lower costs through economies of scale, experience, and
increased purchasing power.
3. To gain access to low-cost inputs of production.
4. To further exploit its core competencies.
5. To gain access to resources and capabilities located in foreign
markets.
Differentiate between competing internationally and competing globally.
Correct Answer-International strategy: competing in two or more
countries simultaneously.
Global strategy: a company employs the same basic competitive
approach in all countries where it operates, sells standardized products
globally, strives to build global brands, and coordinates its actions
worldwide with strong headquarters control.
Describe the role that cross-country differences play in determining how
organizations should compete in foreign markets. Correct Answer-
Cultures and lifestyles, Market demographics, Market conditions,
Growth rate, Distribution systems, Need for responsiveness, Locations
,advantages, Exchange rates, Host government restrictions, Tariffs, &
Trade policies
Exporting Correct Answer-Maintaining national production and
exporting goods to foreign markets.
A good way to test the international market (low risk) Deal with
shipping costs and tariffs.
Licensing Correct Answer-Allow foreign firms to produce and distribute
your product or use your technology.
Good for manufacturing organizations
Franchising Correct Answer-Similar to licensing
More suited to services and retailers
Longer term and broader in nature
Acquisition / Merger Correct Answer-Acquire or merge with company
competing in foreign market
Give very quick entry to market
Deal with cultural and integrations issues (viable)
Greenfield Venture / Internal Development Correct Answer-Start up a
new business unit and use it to enter in to foreign market
Starting new unit in existing integration. Takes a long time before
earning profits.
, Strategic Alliances & Joint Ventures Correct Answer-Combine
resources with foreign partner(s)
Share risks, costs, and profits
Fail over time
Multi-country Strategy Correct Answer-Think-local, act-local
Tailor strategy to each country
Global Strategy Correct Answer-Think-global, act-global
Pursue same basic strategy worldwide
Transnational Strategy Correct Answer-Think-global, act local
Combination global-local strategy
Describe how a firm can achieve a competitive advantage by competing
in international markets. Correct Answer-1. Locating various value
chain activities among nations in a manner that lowers costs or achieves
greater product differentiation.
2. Transferring its most valuable resources and capabilities across
borders.
3. Coordinating cross-border activities that are unavailable to domestic-
only competitors.
4. Profit sanctuaries
5. Cross-market subsidization
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