QUESTION What gives a firm tight control for coordinating a globally dispersed value chain? A. Signing joint-venture agreements B. Installing manufacturing units in locations with optimal factor conditions C. Setting up wholly owned marketing subsidiaries D. Establishing a greenfield venture E. Using foreign marketing agents ANSWER C
QUESTION Which of the following is an advantage of joint ventures as a mode of entry into foreign markets? A. The foreign firm benefits from a local partner’s knowledge of the host country. B. The foreign firm can protect its technology from being appropriated by its local partner. C. There is less cause for friction […]
QUESTION Why do acquisitions fail sometimes? A. There is a clash between the cultures of the acquiring and acquired firm. B. Acquisitions take a long time to execute. C. Acquisitions are easily preempted by making greenfield investments. D. The revenue and profit stream generated by an acquisition’s resources is usually unknown. E. Losses produced by […]
QUESTION The risks associated with learning to do business in a new culture are less if the firm: A. engages in global strategic coordination. B. imposes strict marketing guidelines on how to do business. C. enters a greenfield venture in the host country. D. realizes substantial location economies. E. acquires an established host-country enterprise. […]
QUESTION Spring, an American firm, recently acquired another company, Tazel Inc., in Indonesia. The high-level managers at Tazel quit because they could not cope with the domineering and straightforward approach of their American counterparts. This illustrates how acquisitions may fail because: A. managers overestimate their ability to create value from an acquisition. B. integration of […]
QUESTION A distinction can be drawn between firms whose core competency is in which of the following? A. Scale of entry and strategic commitments B. Location and experience curves C. Acquisitions and greenfield ventures D. Technological know-how and management know-how E. Cost reductions and entry mode ANSWER D
QUESTION Which of the following is true of international firms considering foreign expansion? A. The timing and scale of entry of foreign expansion are minor details in comparison with the choice of foreign market. B. The long-run economic benefits of doing business in a country are solely a function of the country’s population size. C. […]
QUESTION When should a firm configure its value chain to maximize value at each stage? A. When government regulations relax B. When cost pressures are intense C. When rapid imitation is expected D. When the number of consumers increases E. When incumbent competitors exist ANSWER B
QUESTION Axiom International, an Australian company, wants to expand its operations to China, a country that is politically, culturally, and economically different. The firm needs to select a mode of entry that would give it access to local knowledge, allow sharing of development costs and risks, and also be politically acceptable. Which of the following […]
QUESTION Why should a high-tech firm avoid selecting licensing as a mode of entry? A. Threat of creating efficient partners B. Risk of losing control over technology C. Fear of rapid imitation of core technology D. Lack of a transitory technological advantage E. Inability to deter development costs ANSWER B
