QUESTION The experience curve refers to systematic increases in production costs that have been observed to occur over the life of a product. Indicate whether the statement is true or false. ANSWER FALSE The experience curve refers to systematic reductions in production costs that have been observed to occur over the life of a […]
QUESTION The ability to spread fixed costs over a large volume is one of the sources of economies of scale. Indicate whether the statement is true or false. ANSWER TRUE Economies of scale have a number of sources. One is the ability to spread fixed costs over a large volume. Fixed costs are the […]
QUESTION The firm that moves up the experience curve most rapidly will have a cost advantage vis-à-vis its competitors. Indicate whether the statement is true or false. ANSWER FALSE Moving down the experience curve allows a firm to reduce its cost of creating value and increase its profitability. The firm that moves down the […]
QUESTION Strategies that increase profitability can also expand a firm’s business and thus enable it to attain a higher rate of profit growth. Indicate whether the statement is true or false. ANSWER TRUE Strategies that increase profitability can also expand a firm’s business and thus enable it to attain a higher rate of profit […]
QUESTION Universal needs exist when the tastes and preferences of consumers in different nations are different. Indicate whether the statement is true or false. ANSWER FALSE Universal needs exist when the tastes and preferences of consumers in different nations are similar if not identical.
QUESTION Pressures for local responsiveness imply that it may not be possible to leverage skills and products associated with a firm’s core competencies wholesale from one nation to another. Indicate whether the statement is true or false. ANSWER TRUE Pressures for local responsiveness imply that it may not be possible to leverage skills and […]
QUESTION A localization strategy involves some duplication of functions and smaller production runs. Indicate whether the statement is true or false. ANSWER TRUE Since customization, as a result of a localization strategy, involves some duplication of functions and smaller production runs, it limits the ability of the firm to capture the cost reductions associated […]
QUESTION Firms that pursue an international strategy focus on increasing profitability by reaping the cost reductions that come from economies of scale, learning effects, and location economies. Indicate whether the statement is true or false. ANSWER FALSE Firms that pursue a global standardization strategy focus on increasing profitability and profit growth by reaping the […]
QUESTION A global standardization strategy makes most sense when there are strong pressures for cost reductions and demands for local responsiveness are minimal. Indicate whether the statement is true or false. ANSWER TRUE Firms pursuing a global standardization strategy prefer to market a standardized product worldwide so that they can reap the maximum benefits […]
QUESTION The rate of return that a firm makes on its invested capital is referred to as: A. stakeholder return. B. profitability. C. profit growth. D. process value. E. strategic fit. ANSWER B
