A) To spread business risk across a wider geographic market base
B) To capitalize on company competencies and capabilities
C) To achieve lower costs and enhance the firm's competitiveness
D) To build the profit sanctuaries necessary to wage guerrilla offensives against global challengers endeavoring to invade its home market
E) To gain access to more buyers for the company's products/services
G) A) and B)
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A) Overcoming language and cultural barriers and the sometimes extensive managerial time required for trust-building, communication, and coordination
B) The trouble allies can have reaching mutually agreeable ways to deal with key issues
C) Becoming overly dependent on another company for essential expertise and competitive capabilities
D) Making it harder to pursue a multidomestic strategy as compared to a global strategy
E) Suspicions about whether allies are being forthright in exchanging information and expertise
G) B) and C)
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A) there are significant scale economies in performing an activity.
B) the costs of manufacturing or other activities are significantly lower in some geographic locations than in others.
C) there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations) .
D) certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages.
E) All of the above.
G) B) and E)
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A) A multicountry strategy is generally superior to a global strategy.
B) There are country-to-country differences in consumer buying habits and buyer tastes and preferences.
C) A company must contend with fluctuating exchange rates and country-to-country variations in host-government restrictions and requirements.
D) Product designs suitable for one country are often inappropriate in another.
E) Market growth rates vary from country to country.
G) None of the above
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A) enter additional country markets.
B) gain better access to scale economies in production and/or marketing.
C) fill competitively important gaps in their technical expertise and/or knowledge of local markets.
D) share distribution facilities and dealer networks, thus mutually strengthening their access to buyers.
E) All of these.
G) B) and D)
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A) entails little or no strategy coordination across countries.
B) usually involves cross-subsidizing the prices in those markets where there are significant country-to-country differences in the product attributes that customers are most interested in.
C) involves selling a mostly standardized product worldwide, but varying a company's use of distribution channels and marketing approaches to accommodate local market conditions.
D) is essentially the same in all country markets where it competes but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions.
E) involves having strongly differentiated product versions for different countries and selling them under distinctly different brand names (one for each country or group of neighboring countries) so that there will be no doubt in customers' minds that the product is more local than global.
G) B) and E)
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A) scatter its production plants across many different country markets so as to minimize the costs of shipping to its own distribution centers and/or to wholesalers/retail dealers.
B) consider (1) whether to concentrate each activity it performs in a few select countries or to disperse performance of the activity to many nations and (2) in which countries to locate particular activities.
C) concentrate buyer-related activities in a few well-chosen locations so as to maximize the capture of distribution-related scale economies.
D) disperse both production and distribution activities across many nations in order to hedge against fluctuating exchange rates and lessen the risks of adverse political developments.
E) avoid selling in countries where there are high trade barriers or where buyers purchase in small quantities.
G) A) and D)
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A) producing and marketing a variety of product versions under the same brand name, with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country.
B) little or no strategy coordination across countries.
C) pursuing the same basic competitive strategy theme (low-cost, differentiation, best-cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions.
D) selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries) so that buyers in each country market will think they are buying a locally made brand.
E) selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country) but opting to only sell direct to buyers at the company's website so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market.
G) D) and E)
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A) instability or weaknesses inherent with the national government.
B) host-government hostility toward allowing foreign businesses market entry, often requiring local produced parts and components to be included in manufacturing, allowing for ease of funds transfers from the host country, and often requiring local ownership.
C) Stability of country's monetary system.
D) Lack of property rights protections and compliance with local environmental regulation.
E) All of these.
G) A) and B)
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A) not pursuing costly efforts to build multiple profit sanctuaries.
B) deliberately choosing not to compete in countries with high tariffs and high taxes (which then have to be passed along to buyers in the form of higher prices) , thus keeping costs and prices lower than rivals.
C) using an export strategy to circumvent the risks of adverse exchange rate fluctuations.
D) using location to lower costs or help achieve greater product differentiation and it can use cross-border coordination in ways a domestic-only competitor cannot.
E) employing a multidomestic strategy instead of a global strategy.
G) C) and E)
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A) gaining access to new customers for the company's products/services.
B) spreading its business risk across a wider market base.
C) achieving lower costs and enhancing the company's competitiveness.
D) a desire to capitalize on its core competencies and capabilities.
E) All of these.
G) A) and E)
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A) employing a franchising strategy.
B) maintaining a national (one-country) production base and exporting goods to foreign markets.
C) licensing foreign firms to produce and distribute one's products.
D) establishing a subsidiary in a foreign market.
E) All of the above.
G) A) and C)
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A) can be an excellent initial strategy to pursue international sales.
B) can be a competitively successful strategy when a company is focusing on vacant market niches in each foreign country.
C) works well when a firm does not have the financial resources to employ cross-market subsidization.
D) is usually a weak strategy when competitors are pursuing multicountry strategies.
E) can be a powerful strategy because the company is not vulnerable to fluctuating exchange rates.
G) A) and B)
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A) are significantly impacted by where its production, distribution, and customer service activities are located.
B) can be affected by differences in operating costs and profitability due to wage rate and worker productivity.
C) can be affected by differences in energy costs, environmental regulations, tax rates, and inflation rates.
D) can be influenced by cheaper access to essential natural resources.
E) All of these.
G) A) and E)
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A) hindering the use of cross-market subsidization techniques and increasing company vulnerability to adverse shifts in currency exchange rates.
B) making it very difficult to take into account significant country-to-country differences in distribution channels and marketing methods.
C) making it difficult and costly to be responsive to country-to-country differences in customer needs, buying habits, cultural traditions, and market conditions.
D) hindering transfer of a company's competencies and resources across country boundaries and hindering the pursuit of a single, uniform competitive advantage in all country markets where a company operates.
E) being unsuitable for competing in the markets of emerging countries and posing added difficulty in building multiple profit sanctuaries.
G) B) and E)
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A) a big majority of the company's rivals are pursuing localized multidomestic strategies.
B) country-to-country differences are small enough to be accommodated with the framework of a mostly uniform global strategy.
C) plants need to be scattered across many countries to avoid high shipping costs.
D) market growth rates vary considerably from country to country.
E) host governments enact regulations requiring that products sold locally meet strict manufacturing specifications or performance standards.
G) A) and B)
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A) whether to use strategic alliances to help defeat its rivals.
B) whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.
C) whether to maintain a national (one-country) manufacturing base and export goods to the other countries.
D) choosing which foreign companies to team up with via strategic alliances or joint ventures.
E) whether to test the waters with an export strategy before committing to some other competitive approach.
G) None of the above
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A) that it is especially vulnerable to fluctuating exchange rates and that it can usually be defeated by companies employing cross-market subsidization tactics.
B) excessive vulnerability to fluctuating exchange rates and having to craft a separate strategy for each country market in which the company competes.
C) hindering a company's transfer of competencies and resources across country boundaries (since somewhat different competencies and capabilities are likely to be employed in different host countries) and not promoting the building of a single, unified competitive advantage in all country markets where a company competes.
D) greater exposure to both increases in tariffs and restrictive trade barriers and added difficulty in accommodating the diverse trade restrictions and regulatory requirements of host governments.
E) not being able to export products manufactured in one country to markets in other countries and being largely unsuitable for competing in the markets of emerging countries.
G) D) and E)
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A) establishes a wholly owned subsidiary.
B) acquires a foreign company.
C) supports direct control over all aspects of operating in a foreign market.
D) establishes a start-up operation.
E) All of these.
G) None of the above
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A) countries with previously planned economies are embracing market or mixed economies.
B) information technology shrinks the importance of geographic distances.
C) ambitious growth-minded countries race to build global share.
D) lower barriers to international trade.
E) All of these.
G) C) and E)
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