1.

Must try to realize location economies and scale economies from global volume,
transfer distinctive competences and skills within the company, and
simultaneously pay attention to pressures for local responsiveness. Must also
focus on leveraging subsidiary skills.
a) International licensing
b) Transnational strategy
c) International strategy
d) Localization strategy
2. The greater the pressures for cost reductions are, the more likely it is that a
company will want to pursue some combination of exporting and wholly owned
subsidiaries
a) Joint ventures
b) Franchising
c) Exporting
d) Cost reduction
3. Derives from its control of proprietary technological know-how, licensing and
joint venture arrangement should be avoided if possible, in order to minimize the
risk of losing control of that technology.
a) Universal needs
b) Location economies
c) Distinctive competence
d) Joint ventures
4. The economic benefits that arise from performing a value creation activity in the
optimal location for that activity.
a) Localization strategy
b) Joint ventures
c) Location economies

d) Cost reduction
5. A company can increase its growth rate by taking goods or services developed at
home and selling them internationally. Based upon distinctive competences
(unique skills) that underlie the production and marketing of those goods or
services
a) Expanding the market: Leveraging products and competences
b) Led to globalization of production and markets
c) Distinctive competence
d) Value creation activity

6. The company does not have to bear the development costs and risks associated
with opening a foreign market
a) Drawbacks of licensing
b) Disadvantages of Franchising
c) Advantages of licensing
d) Advantages of Franchising
7. An arrangement whereby a foreign licensee buys the rights to produce a
company's product in the licensee's country for a negotiated fee (normally,
royalty payments on the number of units sold)
a) International licensing
b) Drawbacks of licensing
c) International strategy
d) Advantages of licensing

8. Niche, Harvest, Divestment, and Leadership Strategy

a) Growth stage
b) Mature stage
c) Embargo stage
d) Strategies to deal with decline stage

9. A Declining Industry is

a) focuses on pockets of demands that are declining more slowly

b) The process of creating a competitive advantage by designing goods or
services to satisfy customers needs.
c) occurs when a company sells off its business to others
d) When market is shrinking, competition tends to intensify and profit rates tend
to fall.
10.

Market Penetration is

a) New, Existing
b) Existing, Existing
c) Existing, New
d) New, New

11.

optimizes cash flow for a short period of time

a) Niche Strategy
b) Leadership Strategy

c) Harvest Strategy
d) Focus Strategy

12.

Market Development

a) Existing, Existing
b) New, New
c) Existing, New
d) New, Existing

13.

Occurs when a company sells off its business to others

a) Niche strategy
b) Focus strategy
c) Harvest strategy
d) Divestment strategy

14. Facilitates investments in specialization. It does not involve high bureaucratic

costs, nor does it dispense with market discipline.

a) Product bundling

b) Long term contracting

c) Virtual corporation
d) Horizontal integration

15. Lowers operating costs (increasing economies of scale) - very important in

industries that have high fixed costs, because large-scale production allows a
company to spread its fixed costs over a large volume, which drives down
average operating costs

a) Horizontal integration
b) Arguments against vertical integration
c) Benefits and costs of horizontal integration
d) Backward vertical integration

16. The strategy of operating a business unit in a new industry that is related to a
company's existing business units by some form of linkage or connection
between one or more components of each business unit's value chain.
Normally, these linkages are based on manufacturing, marketing, or
technological connections or similarities
a) Unrelated diversification
b) Related Diversification
c) Full and Taper integration
d) Diversification

17. Which involves corporate managers acquiring inefficient and poorly managed
enterprises and then creating value by installing their superior internal
governance in these acquired companies and restructuring their operations
systems to improve their performance

a) Concentration on a single industry

b) Acquisition and restructuring strategy
c) Liquidation strategy
d) Harvest strategy

18. When two or more business units can share resources such as manufacturing
facilities, distribution channels, advertising campaigns, and R&D costs, total
operating costs fall because of
a) Absolute advantage
b) Comparative advantage
c) Economies of scope
d) Acquisition

19. An agreement between two companies to pool their resources in a combined

operation

a)
b)
c)
d)

Merger
Acquisition
Divestment
Consolidation

20. The movement of a company away from its present state toward some
desired future state to increase its competitive advantage and profitability

a) Strategic Alliances

b) Strategic Alliances Advantages

c) Strategic change
d) Acquisitions

21. A formal type of strategic alliance where two companies create a new
separate company

a) Acquisitions Advantages
b) Internal New Ventures
c) acquisitions
d) joint ventures

22. The fate of a company

whose strategy fails
because it has made
product/market choices in a way that does not lead to a sustained competitive
advantage
a) Stuck in the middle
b) Cost leadership strategy
c) Focus strategy
d) Harvest strategy

23)

All are the strategies for consolidating a fragmented industry Except

a) chaining
b) Franchising

c) Horizontal merger
d) Vertical integration

24)
A form of market signaling in which one company starts to cut prices
aggressively, and then competitors respond in a similar way; when this occurs,
nobody gains and everybody loses
a) Price leadership
b) Tit for Tat strategy
c) Non price competition
d) Product proliferation

25)

A subsidiary where the parent company owns 100% of the subsidiarys stock

a) merger
b) consolidation
c) subsidiary
d) Wholly owned subsidiary