Arizona State University - MGT 302

Chapter 13 The Strategy of International Business

True / False Questions

1)A firm's strategy can be defined as the actions that managers take to attain the goals of the firm.

True    False

2. The preeminent strategic goal for most firms is to maximize the value of the firm for its owners.

True    False

3. The customer is able to garner the benefit of the consumer surplus because one firm is competing with other firms for the customer's business, so the firm must charge a lower price than it could if it were a monopoly supplier.

True    False

4. According to Porter, the way to create superior value is to drive down the cost structure of the business and/or differentiate the product in some way so that consumers value it more.

True    False

5. For a firm, all positions on the efficiency frontier are viable.

True    False

6. Support activities are always less important than the primary activities in achieving a competitive advantage.

True    False

7. The success of many multinational corporations is based not just upon the goods or services that they sell in foreign nations, but also upon the core competencies that underlie the development, production, and marketing of those goods or services.

True    False

8. The skills within the firm that a competitor cannot easily match or imitate are known as core competence.

True    False

9. Systematic increases in sales that have been observed to occur over the life of the product are referred to as the experience curve.

True    False

10. One of the sources of economies of scale is the ability to spread fixed costs over a large volume.

True    False

11. Once a firm has established a low-cost position, it can act as a barrier to new competition.

True    False

12. In a multinational enterprise, skills are always generated at the headquarters location and are then dispersed to the rest of the organization.

True    False

13. To leverage subsidiary skills, companies should establish incentive systems that encourage local employees to acquire new skills.

True    False

14. Universal needs exist when the tastes and preferences of consumers in different nations are similar if not identical.

True    False

15. When consumer tastes and preferences differ significantly between countries, there is low pressure for local responsiveness.

True    False

16. Threats of protectionism, economic nationalism, and local content rules dictate that international businesses manufacture locally.

True    False

17. A global standardization strategy is appropriate when a firm is facing low pressures for cost reduction but high pressure for local responsiveness.

True    False

18. As competition intensifies, global standardization strategies and transnational strategies tend to become less viable, and managers need to orientate their companies toward either an international strategy or a localization strategy.

True    False

19. Research has shown that in the modern multinational enterprise, core competencies and skills typically reside in the home country.

True    False

20. Enterprises that pursue an international strategy tend to decentralize control over marketing and product strategies.

True    False