BPL 5100 2 Exam Questions with Correct Answers
Harvesting strategy - Answer-a strategy of wringing as much profit as possible out of a business in the short to medium term by reducing costs
Consolidation strategy - Answer-a firm's acquiring or merging with other firms in an industry in order to...
BPL 5100 2 Exam Questions with
Correct Answers
Harvesting strategy - Answer-a strategy of wringing as much profit as possible out of a
business in the short to medium term by reducing costs
Consolidation strategy - Answer-a firm's acquiring or merging with other firms in an
industry in order to enhance market power and gain valuable assets
Turnaround strategy - Answer-a strategy that reverses a firm's decline in performance
and returns it to growth and profitability
corporate level strategy - Answer-a strategy that focuses on gaining long-term revenue,
profits and market value through managing operations in multiple businesses
Globalization - Answer-a term that has two meanings: (1) the increase in international
exchange, including trade in goods and services as well as exchange of money, ideas,
and information; (2) the growing similarity of laws, rules, norms, values, and ideas
across countries; the rise of market capitalism around the world
Challenges of globalization - Answer-Determining how to meet the needs of customers
at very different income levels; The challenge for multinational firms is to tailor their
products and services to meet the needs of the "bottom of the pyramid"
Michael Porter's diamond of national advantage - Answer-a framework for explaining
why countries foster successful multinational corporations; consists of four factors:
factor endowments; demand conditions; related and supporting industries; and firm
strategy, structure, and rivalry
Factor endowments (national advantage) - Answer-a nation's position in factors of
production, such as skilled labor or infrastructure, necessary to compete in a given
industry
Demand conditions (national advantage) - Answer-the nature of home-market demand
for the industry's product or service
Related and supporting industries (national advantage) - Answer-the presence,
absence, and quality in the nation of supplier industries and other related industries that
supply services, support, or technology to firms in the industry value chain
Firm Strategy, Structure, and Rivalry (national advantage) - Answer-the conditions in
the nation governing how companies are created, organized, and managed, as well as
the nature of domestic rivalry
, strongest indicator of global competitive success - Answer-Domestic rivalry; Firms that
have experienced intense domestic competition are more likely to have designed
strategies and structures that allow them to successfully compete in world markets
Multinational firms - Answer-firms that manage operations in more than one country
Motivations for international expansion - Answer-increase market size, take advantage
of arbitrage, enhance a product's growth potential, optimize the location of value-chain
activities, cost reduction, risk reduction, learning opportunities, exploring reverse
innovation
Arbitrage opportunities - Answer-an opportunity to profit by buying and selling the same
good in different markets
Reverse innovation - Answer-new products developed by developed-country
multinational firms for emerging markets that have adequate functionality at a low cost
Four main types of risk - Answer-political, economic, currency, and management risk
Political risk - Answer-potential threat to a firm's operations in a country due to
ineffectiveness of the domestic political system
Rule of law - Answer-a characteristic of legal systems whereby behavior is governed by
rules that are uniformly enforced
Economic risk - Answer-potential threat to a firm's operations in a country due to
economic policies and conditions, including property rights laws and enforcement of
those laws
Currency risk - Answer-potential threat to a firm's operations in a country due to
fluctuations in the local currency's exchange rate
business level strategy - Answer-a strategy designed for a firm or a division of a firm
that competes within a single business
Generic Strategies - Answer-basic types of business level strategies based on breadth
of target market (industrywide versus narrow market segment) and type of competitive
advantage (low cost versus uniqueness)
overall cost leadership - Answer-a firm's generic strategy based on appeal to the
industrywide market using a competitive advantage based on low cost
experience curve - Answer-the decline in unit costs of production as cumulative output
increases
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