1

Chapter 2
1. When a company decides to de-emphasize local differences and locate their operations anywhere in the world where it is advantageous, they adopt what is known as a. A local responsiveness strategy b. IB strategic insights c. Small business insights d. A global integration strategy Answer: D Conceptual, Strategic Choices for MNCs, p. 36
2. When a company decides to focus on meeting customer needs based on national and

regional differences, it is adopting a(n) a. Local responsiveness strategy b. IB strategic insight c. Small business insight d. Global integration strategy Answer: A Conceptual, Strategic Choices for MNCs, p. 36
3. Which of the following three statements is NOT TRUE about a local responsiveness

strategy? a. A company pursuing a local responsiveness strategy de-emphasizes local and regional differences to locate around the world b. A company focusing on satisfying local customer needs is pursuing a local responsiveness strategy c. A company that focuses on local customer tastes because of cultural differences is using a local responsiveness strategy d. All of the above are true Answer: A Conceptual, Strategic Choices for MNCs, p. 36 4. Global dilemma is a. The challenge of deciding in which country to open a new business b. The problem of choosing a strategic orientation c. Choosing a price for a product d. Caused when people in the company are not focused on the company goal Answer: B Factual, Strategic Choices for MNCs, p. 36 5. Primary activities involve a. Physical actions of creating, selling, and after-sale service of products b. Getting necessary raw materials through production to sales c. Understanding the real world of international business d. Strategic implications for international businesses Answer: A

Conceptual, Competitive Advantage and the Value Chain, pp. 3739 6. Value-chain activities such as sales and dealing with distribution channels are called a. Upstream activities b. Downstream activities c. Support activities d. None of the above Answer: B Conceptual, Competitive Advantage and the Value Chain, pp. 3739 7. Activities such as R&D and managing the supply chain are known as a. Upstream activities b. Downstream activities c. Support activities d. Supply-chain activities Answer: A Conceptual, Competitive Advantage and the Value Chain, pp. 3739 8. The more inclusive version of global integration is known as a. IB strategic insights b. Local responsiveness strategy c. Transnational strategy d. Global integration strategy Answer: C Conceptual, Global Integration, p. 40 9. A global platform is a country a. Where firms can outperform competitors in some of their value-chain activities b. That exports goods and builds global networks through production and sales c. That has low wage platforms for high-tech assembly and facilitates the transfer of technology d. That performs research on the environment and recommends sustainable practices for companies Answer: A Conceptual, Global Integration, p. 40
10. Absolute advantage refers to

a. Advantages of nations over other nations b. Advantages of individual firms over other firms c. Advantages of outsourcing over offshoring d. Advantages of production and better service Answer: A Conceptual, Global Integration, p. 40
11. Companies pursuing which strategies take a compromised approach to the globallocal

dilemma?

3 a. International strategies b. Local responsiveness strategies

c. Global integration strategies d. Multidomestic strategies Answer: A Conceptual, International Strategy, p. 42

12. Which of the following three statements about international strategies is NOT TRUE?

Companies using international strategies attempt to sell global products Companies using international strategies limit adaptation to local customs and culture c. Companies using international strategies locate value-chain activities anywhere in the world d. All of the above are true Answer: C Conceptual, International Strategy, p. 42 13. Regional strategy attempts a. To de-emphasize local differences and locate operations anywhere in the world where it is advantageous b. To gain some of the economic efficiency and location advantages of the more global strategies combined with some of the local adaptation advantages of the multidomestic strategy c. To focus on meeting customer needs based on national and regional differences they adopt d. None of the above Answer: B Conceptual, Multidomestic and Regional Strategies, p. 44 14. A strategy whereby a multinational does business differently in each country is a. A regional strategy b. A multidomestic strategy c. A transnational strategy d. An international strategy Answer: B Conceptual, Multidomestic and Regional Strategies, p. 44 15. Conditions in an industry that favor the more globally oriented transnational or international strategies over the more locally oriented multidomestic or regional strategies are called a. Globalization b. Globallocal dilemma c. Multinational strategy d. Globalization drivers Answer: D Conceptual, Choosing a Multinational Strategy, pp. 4748

a. b.

16. Global customers are a. Non-profit organizations that play vital roles in achieving companies goals

b. Organizations or people who shop for goods anywhere in the world c. Organizations or people who have ownership positions in the company d. People who dont care how much they spend Answer: B Factual, Global Markets, p. 48
17. If a key assumption of a multinational strategist is that centralizing key activities such as

R&D reduces coordination costs and gives economies of scale, then which of the following strategies is most appropriate? a. An international strategy b. A transnational strategy c. A global strategy d. None of the above Answer: A Conceptual, How to Make the Transnational or International Choice, p. 52
18. If the multinational manager believes that the benefits of dispersing value-chain activities

worldwide offset the costs of coordinating a more complex organization, then which of the following strategies is most appropriate a. An international strategy b. A transnational strategy c. A global strategy d. All of the above Answer: B Conceptual, How to Make the Transnational or International Choice, p. 52 19. While globalizing the industry, the industry should a. Look for undeveloped countries that are unaware of business strategy b. Identify the opportunities or threats that globalization poses to a companys position c. Identify if countries economies have grown extensively over the past two decades and have sometimes struggled d. All of the above Answer: B Conceptual, How to Make the Transnational or International Choice, p. 52 20. Multinational strategy is executed in a dynamic global context related to relationships among a. Governments b. Patterns of trade and investments c. Foreign exchange markets d. All of the above Answer: D Conceptual, Strategic Choices for MNCs, p. 36

21. Porter divides the value chain into a. Primary and secondary activities b. Primary and service activities c. Primary and support activities d. Secondary and tertiary activities Answer: C Factual, Competitive Advantage and the Value Chain, pp. 3738
22. Value-chain activities such as human resource management, information technology, and

organizational design and control are known as a. Primary activities b. Secondary activities c. Upstream activities d. Support activities Answer: D Conceptual, Competitive Advantage and the Value Chain, pp. 3738 23. When a company decides to focus on meeting customer needs based on national and regional differences, they adopt a a. Global integration strategy b. Local responsiveness strategy c. Differentiation strategy d. Multidomestic strategy Answer: B Conceptual, Multidomestic and Regional Strategies, pp. 4446 24. Which of the following strategies top priorities are seeking location advantages and gaining economic efficiencies while operating worldwide? a. Global integration strategy b. Transnational strategy c. Differentiation strategy d. Multidomestic strategy Answer: B Conceptual, Multidomestic and Regional Strategies, pp. 4446 25. Locating manufacturing subunits near sources of high quality or low cost labor is an example of a. Differentiation strategic activities b. Globalization strategic activities c. Transnational strategic activities d. Manufacturing strategic activities Answer: C Conceptual, Global Integration, p. 40 True/False

6 1. A local responsiveness strategy is one where a company decides to focus on meeting

local customer needs Answer: True Conceptual, Strategic Choices for MNCs, p. 36
2. When a company de-emphasizes local differences and locates its operations anywhere

in the world, it is pursuing a local responsiveness strategy Answer: False Conceptual, Strategic Choices for MNCs, p. 36
3. Choosing between a local and a global strategy is known as the globallocal dilemma

Answer: True Conceptual, Strategic Choices for MNCs, p. 36 4. Primary activities involve the physical actions of creating, selling and after-sale service of products Answer: True Factual, Competitive Advantage and the Value Chain, pp. 3739
5. Early activities in the value chain, such as R&D and managing the supply chain, are

called downstream activities Answer: False Factual, Competitive Advantage and the Value Chain, pp. 3739
6. Early activities in the value chain, such as R&D and managing the supply chain, are

called upstream activities Answer: True Factual, Competitive Advantage and the Value Chain, pp. 3739
7. Human resource management, information technology, and organization design and

control are all support value-chain activities Answer: True Factual, Competitive Advantage and the Value chain, pp. 3739 8. The top priority of the international strategy is to seek location advantages worldwide Answer: False Conceptual, International Strategy, p. 42 9. The top priority of the transnational strategy is to seek location advantages worldwide to gain economic efficiencies Answer: True Conceptual, Transnational Strategy, p. 40 10. The advantage of firms over other firms is known as comparative advantage Answer: False Conceptual, Transnational Strategy, p. 40

11. Absolute advantage refers to advantages of nations over other nations Answer: True Conceptual, Transnational Strategy, p. 40 12. The international strategy is a partial global integration strategy Answer: True Conceptual, International Strategy, p. 42 13. International strategist firms choose to locate value-chain activities anywhere in the world Answer: False Conceptual, International Strategy, p. 42
14. International strategist firms keep upstream and downstream activities at home in the

countrys headquarters Answer: True Conceptual, International Strategy, p. 42 15. The most extreme form of a locally responsive strategy is the international strategy Answer: False Conceptual, International Strategy, p. 42
16. The most extreme form of a locally responsive strategy is the multidomestic strategy

Answer: True Conceptual, International Strategy, p. 42 17. Globalization drivers are conditions in an industry that favor more global strategies Answer: True Conceptual, How to Solve the GlobalLocal Dilemma, pp. 4748
18. If a multinational manager believes that the benefits of dispersing value-chain activities

offset the costs of coordinating a more complex organization, then the manager will most likely choose a transnational strategy over an international strategy Answer: True Conceptual, How to Make the Transnational or International Choice, p. 52
19. If a multinational manager believes that the benefits of dispersing value-chain activities

offset the costs of coordinating a more complex organization, then the manager will most likely choose an international strategy over a transnational strategy Answer: False Conceptual, How to Make the Transnational or International Choice, p. 52 20. Regional trading blocs such as the EU and NAFTA have led to the need for more local responsiveness strategies Answer: False

Factual, Local Responsiveness Strategy, p. 44

21. Companies pursuing international strategies take a compromise approach to the global

local dilemma Answer: True Conceptual, International Strategy, p. 42 22. In many ways, the local responsiveness strategy is a form of differentiation strategy Answer: True Factual, Local Responsiveness Strategy, p. 44
23. As with most uses of a differentiation strategy, a global strategy is usually more

expensive than a multidomestic strategy Answer: False Factual, Local Responsiveness Strategy, p. 44
24. A global platform is a country location where a firm can outperform a competitor in

some, but not all, value-chain activities Answer: True Conceptual, Transnational Strategy, p. 40 25. Sales and dealing with distribution channels are known as downstream activities Answer: True Factual, Competitive Advantage and the Value Chain, pp. 3739