COB 487 Final UPDATED Exam Questions
and CORRECT Answers
Factors effecting a Nation's competitiveness - CORRECT ANSWER- ✔✔- Domestic
Industry Rivalry
- Factor Endowments
- Related and Supporting Industries
- Demand Conditions
Factor Endowments - CORRECT ANSWER- ✔✔Involve factors of production.
- Land, natural resources
- Capital availability and financial Systems
- Labor and Skilled Resources
- Infrastructure: transportation, communication
Demand Conditions - CORRECT ANSWER- ✔✔Refer to the demands that consumers place
on an industry.
Demanding consumers drive firms in that country to:
- Meet high standards
-Create and upgrade innovative products and services
- Proactively respond to product and service requirements
- Better anticipate future global demand
Firm strategy, structure, and rivalry - CORRECT ANSWER- ✔✔Affect competitiveness via
strong consumer demand, strong supplier base, and high new entrant potential from related
industries
Domestic Rivalry - CORRECT ANSWER- ✔✔leads to a search for new markets
related and supporting industries - CORRECT ANSWER- ✔✔- enable firms to manage
inputs more effectively via:
• A competitive supplier base
, • Reduces manufacturing costs
• Close working relationships with suppliers
• Allows for joint research and development
• Development of related industries
• Forces existing firms to practice cost control, product innovation, better distribution
methods
Multinational Firm - CORRECT ANSWER- ✔✔- Increase size of potential markets
- Take advantage of arbitrage opportunities and optimize the location of value chain activities
to reduce cost, enhance performance and reduce risk
- Enhance a products growth potential
- Explore reverse innovation
Outsourcing - CORRECT ANSWER- ✔✔External firm performing some value-creating
activities for the company
Offshoring - CORRECT ANSWER- ✔✔Locating some value-creating activities in
company's foreign location
International Expansion: Risks - CORRECT ANSWER- ✔✔political, economic, currency,
management
Political Risk - CORRECT ANSWER- ✔✔Due to social unrest, military turmoil,
demonstrations, terrorism, absence of the rule of law can lead to:
- Destruction of Property
- Disruption of operations
- Non-payment for goods and services.
- Arbitrary government decisions
Economic Risk - CORRECT ANSWER- ✔✔Due to GDP fluctuations, economic policies,
piracy, and counterfeiting
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