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Exam 13: The Strategy of International Business

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Question 51

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Which of the following statements is NOT true?

A) The way to increase the profitability of a firm is to create more value.
B) The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products.
C) The more value customers place on a firm's products, the higher the price the firm is able to charge for those products.
D) The price a firm charges for a good or service is typically more than the value the customer places on that good or service.

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Question 52

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Economies of scale arise from all of the following sources,EXCEPT:

A) increasing fixed costs by limiting them to small volumes.
B) serving domestic and international markets from the same production facilities
C) serving global markets.
D) bargaining with suppliers to bring down the cost of key inputs.

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Question 53

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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.

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

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

Learning effects tend to be more significant when a technologically simple task is repeated.

Discuss the evolution of strategy.How does cost become important in the long term?

_____ activities are basically concerned with creating the product,marketing and delivering the product to buyers,and providing support and after-sales service.

Which of the following is a disadvantage of the localization strategy?

Consider a transnational strategy.Why would a firm choose this strategic alternative? What are the disadvantages of this strategy?

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.

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.

Profit growth is measured by the percentage increase in net profits over time.

What is a core competence? Why is it essential to the success of the firm?

For firms that are selling a product that serves universal needs,and that do not face significant competition,a(n) _____ strategy makes sense.

The value of a product to an average consumer is V; and the average price that the firm can charge a consumer for that product is P.Here,V - P can be termed as: C. The firm's profit per unit sold (π) is equal to P - C, while the consumer surplus per unit is equal to V - P.

The price a firm charges for a good or service is typically less than the value placed on that good or service by the customer.This is because:

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

A firm that is pursuing a(n) _____ strategy is simultaneously trying to achieve low costs through location economies,economies of scale,and learning effects,and trying to differentiate its product offering across geographic markets.

What are the four basic strategies that firms use to compete in international markets?