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Which of the following is the most likely advantage of using foreign acquisitions or greenfield plants as a foreign entry mode?


A) They are easy to initiate and terminate.
B) They require low amounts of investments in terms of capital.
C) They reduce a firm's exposure to loss of reputation.
D) They are based on contracts rather than ownership.

E) All of the above
F) A) and C)

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A firm is said to be pursuing a polycentric innovation strategy when


A) its research facility is situated in the headquarters and all other business activities are located around the world.
B) it draws from multiple, equally important research facilities located throughout the world.
C) it restricts its innovation to Western economies and production to developing markets.
D) its knowledge flow takes a one-way path-from its headquarters to the subsidiaries.

E) A) and C)
F) All of the above

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The _____ states that geographic location alone should not lead to firm-level competitive advantage because firms are now,more than ever,able to source inputs globally.


A) death-of-distance hypothesis
B) local-responsiveness hypothesis
C) real options framework
D) dynamic capabilities framework

E) None of the above
F) All of the above

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A

During the period of Globalization 1.0,the mode of entry into foreign markets primarily involved


A) exporting goods.
B) making foreign direct investments.
C) making foreign institutional investments.
D) licensing production and distribution.

E) A) and B)
F) B) and D)

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Ridemore Autos Inc.has shifted its research and development unit from its home country to Germany.This allows the company to be better informed about the latest developments in the automotive industry by tapping into the highly advanced automotive industry in Germany.In this scenario,Ridemore Autos Inc.is reaping the benefits of


A) economies of scope.
B) location economies.
C) resource immobility.
D) resource ambiguity.

E) None of the above
F) B) and D)

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_____ is a process of closer integration and exchange between different countries and peoples worldwide.


A) Diversification
B) Globalization
C) Standardization
D) Modification

E) B) and C)
F) A) and D)

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Jane is the CEO of a clothing brand,Diva Rule Inc.,which has retail stores and production units in five different countries.The firm's shareholders ensure the proper management of Diva Rule Inc.through their appointed board of directors.In this scenario,Diva Rule Inc.is most likely a


A) nonprofit organization.
B) nationalized firm.
C) sole proprietorship.
D) multinational enterprise.

E) A) and B)
F) All of the above

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Which of the following accurately describes what the integration-responsiveness framework does?


A) By juxtaposing the pressures a multinational company faces for export tariffs and foreign responsiveness, it devises four strategies to gain and sustain competitive advantage.
B) By juxtaposing the pressures a multinational company faces for cost-reductions and local-responsiveness, it devises four strategies to gain and sustain competitive advantage.
C) By juxtaposing the pressures a multinational company faces for export tariffs and local-responsiveness, it devises two strategies to gain and sustain competitive advantage.
D) By juxtaposing the pressures a multinational company faces for cost-reduction and foreign responsiveness, it devises two strategies to gain and sustain competitive advantage.

E) None of the above
F) All of the above

Correct Answer

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A firm following a multidomestic strategy


A) is highly efficient.
B) lacks local responsiveness.
C) faces a greater risk of intellectual property (IP) appropriation.
D) requires exposing explicit knowledge because products are manufactured locally.

E) A) and C)
F) None of the above

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Zeda is a country of English-speaking people and has a very profitable economy.Which of the following countries is most likely to be the closest to Zeda in terms of cultural distance?


A) Olax, which has the same wealth and per capita income as Zeda
B) Jordax, which has a very profitable economy and where people speak Jordaxian
C) Segar, where people speak English and have a low standard of living
D) Terra, which is located close to Zeda and is easily accessible by road

E) B) and D)
F) A) and D)

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Which of the following has been a key driver for firms to expand globally during the Globalization 3.0 stage?


A) benefits from lower labor costs in manufacturing and services
B) access to low-cost raw materials such as lumber and iron ore
C) low levels of economic growth in emerging economies
D) inefficient infrastructure in countries like China, which have brought down setting-up costs

E) B) and C)
F) All of the above

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After testing its products in foreign markets by pursuing an international strategy,GR Foods Inc.wants to expand by pursuing a multidomestic strategy.How will this most likely affect the company?


A) The company's operations will become more cost-efficient.
B) The company's exposure to exchange rate fluctuations will reduce.
C) The company will be able to reap greater benefits from economies of scale.
D) The company will be exposed to a lower risk of intellectual property appropriation.

E) B) and C)
F) C) and D)

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Which of the following factors is the most important determinant of economic distance?


A) the wealth and per capita income of consumers
B) the ethnicity and religion of consumers
C) the presence of legal institutions in a country
D) the topography of a country

E) C) and D)
F) None of the above

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Which of the following modes of entering a foreign market allows for the lowest level of control?


A) greenfield ventures
B) exporting
C) joint ventures
D) acquisitions

E) A) and C)
F) All of the above

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B

Why did the American MTV network cable channel fail when pursuing a global-standardization strategy?


A) because MTV failed to understand that music videos were a commodity product
B) because the globalization hypothesis holds true for the music industry
C) because cultural distance most affects products with high linguistic content
D) because an international strategy was more suitable for the music industry

E) B) and D)
F) All of the above

Correct Answer

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Some of the best engineering and car companies are in Germany.Thus,it can be concluded that Germany has a _____ in the automobile industry.


A) capital gain
B) trade surplus
C) national competitive advantage
D) liability of foreignness

E) B) and C)
F) A) and B)

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Hans is a strategist who wants to decide on the appropriate strategy to help his firm "go global." Which of the following should Hans consider while choosing his strategy?


A) He must be aware of the fact that despite globalization and the emergence of the Internet, firm geographic location has actually maintained its importance.
B) He should rely on his firm's business-level strategy as a clue to possible strategies pursued globally.
C) He should remember that he has only one framework at his disposal to make global strategy decisions.
D) He must remember that higher levels of control and a lower likelihood of any loss in reputation go along with less investment-intensive foreign entry modes.

E) B) and C)
F) A) and D)

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Jade Mobiles Inc.,a cell phone manufacturing company,has its product development centers located in the U.S.and South Korea.The manufacturing units are located in China and Philippines to benefit from low-labor costs and access to original equipment manufacturers.This allows the company to competitively price its cell phones.Also,the various phone models sold by the company are uniform in all the foreign markets it operates in.In this scenario,which of the following strategies does Jade Mobiles Inc.most likely pursue?


A) international strategy
B) multidomestic strategy
C) global-standardization strategy
D) localization strategy

E) All of the above
F) A) and B)

Correct Answer

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Marc Works Inc.,a reputed brand for fine writing instruments,is implementing an international strategy in its firms.Torque Inc.,a laptop brand,is pursuing a global-standardization strategy in its firms.Which of the following statements most likely holds true in this scenario?


A) While Marc Works Inc.'s competitive advantage lies in its high local responsiveness, Torque Inc. will lack such capabilities.
B) Torque Inc. focuses more on cost-reductions when compared to Marc Works Inc.
C) Torque Inc.'s business functions are highly centralized, whereas Marc Works Inc. organizes its activities worldwide.
D) Torque Inc. is exposed to greater risks of exchange rate fluctuations.

E) None of the above
F) B) and C)

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B

Octa Autos Inc.wants to globally expand its market.It intends to ensure that its mode of foreign entry allows it to have strong control over its operations and protect its intellectual property,though it may mean investing a significant amount of capital and other resources.In this scenario,which of the following foreign entry modes would best suit Octa Autos Inc.?


A) exporting
B) franchise agreement
C) acquisition
D) licensing

E) C) and D)
F) B) and C)

Correct Answer

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