Strategies for Competing in International Markets

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Due on: 12/14/2017
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Strategies for Competing in International Markets

1 Companies opt to expand into foreign markets for such reasons as to

A) boost returns on investment, broaden their product lines, avoid tariffs and trade restrictions, and escape having to deal with strong labor unions.

B) gain access to new customers, achieve lower costs and enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base.

C) grow sales faster than the industry average, reduce the competitive threats from rivals, and open up more opportunities to enter into strategic alliances.

D) avoid having to employ an export strategy, avoid the threat of cross-market subsidization from rivals, and enable the use of a global strategy instead of a multicountry strategy.

E) raise the entry barriers for industry newcomers, neutralize the bargaining power of important suppliers, grow sales faster, and increase the number of loyal customers.

2 Which one of the following is not a factor that a company must contend with in competing in the markets of foreign countries?

A) Variations in market growth rates from country to country and important country-to-country differences in consumer buying habits and buyer tastes and preferences

B) Country-to-country variations in host government policies and trade requirements

C) The fact that product designs suitable for one country are sometimes inappropriate in another

D) Vulnerability to adverse shifts in currency exchange rates

E) A need to convince shippers to keep cross-country transportation costs low

3 Which one of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true?

A) Domestic companies trying to combat competition from foreign imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

B) Fluctuating foreign exchange rates greatly reduce the risks of competing in foreign markets—the big problem occurs when exchange rates are fixed at unreasonably low levels.

C) Domestic companies under pressure from lower-cost imports are benefited when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

D) Manufacturers that are exporting much of what they produce are benefited when their country's currency grows stronger relative to the currencies of the countries that the goods are being exported to.

E) If the exchange rate of U.S. dollars for euros changes from $1.15 per euro to $1.25 per euro, then it is to say that the U.S. dollar has grown stronger.

4 One of the biggest strategy issues confronting a company competing in the international arena is

A) whether to enter country markets where competitive forces are relatively strong or whether to only enter country markets where competition is relatively weak.

B) whether to charge the same price in all country markets.

C) whether to license a select few or a large number of foreign firms to produce and distribute the company's products.

D) whether to offer a mostly standardized product worldwide or whether to customize the company's offerings in each different country market to match the preferences and requirements of local buyers.

E) how many strategic alliances to form with foreign-based firms.

5 Which one of the following is not among the major reasons a company might choose to enter foreign markets?

A) To build profit sanctuaries necessary to wage guerrilla offensives against challengers invading its home market.

B) To spread business risk across a wider geographic market base.

C) To gain access to more buyers for the company's products/services.

D) To capitalize on company competencies and capabilities

E) To achieve lower costs and enhance the firm's competitiveness.

6 Which of the following is/are not "valid" strategy options for entering and/or competing in foreign markets?

A) An import strategy, a strategic alliance strategy, a profit sanctuary strategy, and a cross-market subsidization strategy

B) A global strategy where a company uses essentially the same competitive strategy approach in all country markets where it has a presence.

C) A multicountry strategy

D) An export strategy and using strategic alliances or joint ventures with foreign companies as the primary vehicle for entering foreign markets

E) A franchising strategy and a strategy of licensing foreign firms to use the company's technology or to produce and distribute the company's products

7 Once a company decides to expand beyond its borders it has which of the following strategic options?

A) To maintain a domestic production base and export goods to foreign markets.

B) To rely on strategic alliances or joint ventures to partner with foreign companies.

C) To license foreign firms to produce and distribute its products or use the company's technology.

D) Employ a franchising strategy

E) All of the above.

8 Profit sanctuaries

A) are markets where prices and competitive conditions are strongly linked across country markets to form a world market.

B) are country markets in which a company derives substantial profits because of its protected market position or unassailable competitive advantage.

C) are markets where the risk of fluctuating exchange rates is very high.

D) are not valuable competitive assets, providing financial weaknesses and hinder a company's race for world-market leadership.

E) are markets where competitive conditions make it infeasible to employ a profit strategy and an export strategy.

9 Which of the following is not a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets?

A) Develop new sets of core competencies that allow a company to offer value to consumers of emerging markets in ways unmatched by rivals

B) Prepare to compete on the basis of low price

C) Be prepared to modify aspects of the company's business model to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding)

D) Try to change the local market to better match the way the company does business elsewhere

E) Stay away from those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances

10 The strategy options for local companies in competing against global challengers include

A) develop business models that exploit the shortcomings of local distribution networks and infrastructure, utilize keen understanding of local customer needs and preferences, and transferring company expertise to cross-border markets.

B) employing defensive rather than offensive strategies, entering into strategic alliances with other local companies to defeat the challengers, and not using an import strategy.

C) licensing the company's technology to industry participants competing in foreign markets.

D) developing a core competence in as many value chain activities as possible, and pursuing a multicountry strategy to quickly build new profit sanctuaries.

E) Using an export strategy to gain economies of scale, forming strategic alliances with global giants, using home-run strategies to enter nearby foreign markets, and relying on patriotic themes in local advertising to defeat global challengers trying to enter their home markets.

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Strategies for Competing in International Markets

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