QUESTION According to Porter’s diamond, what are factor endowments? A. The position of a nation regarding the components of production necessary to compete in a given industry B. The presence or absence of related industries that are internationally competitive C. The conditions governing how companies are created, organized, and managed and the nature of domestic […]
QUESTION Which of the following is true of the four attributes that make Porter’s diamond? A. Absence of any single attribute does not impact effectiveness of the diamond. B. The effect of one attribute is contingent on the state of others. C. The diamond is not a mutually reinforcing system. D. Chance events, such as […]
QUESTION Which of the following formed the crux of Porter’s study of national competitive advantage? A. Identifying the various stages of the life cycle of a product B. Determining why a country achieves international success in a particular industry C. Determining how trade barriers affect the prices of products in the international market D. Determining […]
QUESTION Which of the following components of Porter’s diamond is particularly important in shaping the attributes of domestically made products and in creating pressures for innovation and quality? A. Basic factor endowments B. Advanced factor endowments C. Firm strategy D. Demand conditions E. Supporting industries ANSWER D
QUESTION Which of the following is true of factor endowments according to Porter? A. Basic factors, unlike advanced factors, are the most significant for competitive advantage. B. Basic factors can be upgraded by nations, while advanced factors are endowed by nature. C. The initial advantage provided by advanced factors is extended by investment in basic […]
QUESTION Which of the following factor endowments would be classified as a basic factor by Michael Porter? A. Communication infrastructure B. Research facilities C. Natural resources D. Skilled labor E. Technological know-how ANSWER C
QUESTION Porter argues that a nation’s firms gain competitive advantage if their domestic consumers are: A. sophisticated and demanding. B. price insensitive and trusting. C. accommodating and flexible. D. nationalistic and protective of their domestic industries. E. biased toward foreign products. ANSWER A
QUESTION Porter, in his diamond model, suggested that there is a strong association between which of the following and the creation and persistence of competitive advantage in an industry? A. Trade barriers B. Vigorous domestic rivalry C. Purchasing power parity D. The availability of a captive market E. First-mover advantages ANSWER B
QUESTION Vernon predicts that as the demand for a new product starts to grow in other advanced countries, in the long run: A. the cost of labor in these advanced countries begins to increase. B. it becomes profitable for foreign firms to invest in production facilities in the United States. C. the firms in the […]
QUESTION Which of the following advantages is most likely to be enjoyed by a company as a part of the first-mover advantages? A. Increasing returns to specialization B. A positive-sum game due to lack of competition C. The ability to capture scale economies ahead of later entrants D. Absolute advantage and higher efficiency E. The […]
