MODULE 7 QUIZ

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Multiple Choice

According to Michael Porter's framework all of the following factors affect 1 point

a nation's competitiveness except *

A. factor conditions.

B. demand characteristics.

C. related and supported industries.

D. policies that protect the nation's domestic competitors

Fees that a multinational receives from a foreign licensee in return for its 1 point

use of intellectual property (trademark, patent, trade secret, technology)

are usually called *

A. transfer prices.

B. dividends.

C. royalties.

D. intra-corporate inflows.

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 Which of the following describes the most typical order of entry into 1 point

foreign markets? *

A. franchising, licensing, exporting, joint venture, and wholly owned subsidiary

B. exporting, licensing, franchising, joint venture, and wholly owned subsidiary

C. licensing, exporting, franchising, joint venture, and wholly owned subsidiary

D. exporting, franchising, licensing, joint venture, and wholly owned subsidiary

All of the following are limitations of a multi domestic strategy except * 1 point

A. less ability to realize cost savings through scale economies.

B. greater difficulty in transferring knowledge across countries.

C. single locations may lead to higher tariffs and transportation costs.

D. may lead to "overadaptation" as conditions change.

A __________ is a business in which a multinational company owns 100 1 point

percent of the stock. *

A. joint venture

B. strategic alliance

C. wholly owned subsidiary

D. franchising operation

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 __________ occurs when a firm decides to utilize other firms to perform 1 point
value-creating activities that were previously performed in-house. *

A. Offshoring

B. A global strategy

C. Outsourcing

D. A transnational strategy

Microsoft decided to establish a corporate research laboratory in 1 point

Cambridge, England *

A. because England is an ally of the United States.

B. to access the outstanding technical and professional talent available there so that
they can attain world-class excellence in selected value-creating activities.

C. because the local language is English.

D. because the company views the United States as a risky place to expand due to the
actions of the U.S. Department of Justice.

Pressures to "reduce costs" require that * 1 point

A. a company should not trade idiosyncratic preferences in product features for

higher economic returns.

B. a company must pursue what is economically beneficial to the company including

maximizing economies of scale and the company including maximizing economies of
scale and learning curve effects.

C. the manager should follow a multidomestic strategy to maximize the economic

benefits to the company.

D. the company needs to supplement the local foreign economy in a manner specified
by the local government.

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 Low pressure for local adaptation combined with low pressure for lower 1 point
costs would suggest what type of strategy? *

A. international

B. global

C. multinational

D. transnational

Units coordinate their activities with headquarters and with one another, 1 point
units adapt to special circumstances only they face, and the entire
organization draws upon relevant corporate resources. These are all
attributes of which type of strategy? *

A. global

B. transnational

C. international

D. multidomestic

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