MGT195

Q1. Multinational firms following a transnational strategy strive to optimize the tradeoffs associated with efficiency, local adaptation, and learning.
a. true
b. false

Q2. Typically, the best method of entry into a foreign market is the establishment of a wholly owned foreign subsidiary so that the parent organization can maintain a high level of control.
a. true
b. false

Q3. Pressures to ‘reduce costs’ require that:
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 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

Q4. Rivalry is intense in nations with conditions of __________ consumer demand, __________ supplier bases, and __________ new entrant potential from related industries.
a. Weak; weak; high
b. Strong; strong; low
c. Strong; strong; high
d. Weak; weak; low

Q5. A franchise generally expires after a few years whereas a license is designed to last into perpetuity.
a. true
b. false

Q6. Among Theodore Levitt’s assumptions that would favor a global strategy is that consumers around the world are becoming less price-sensitive.
a. true
b. false

Q7. The trend towards worldwide markets makes it easier to predict where competitors will spring up.
a. true
b. false

Q8. Microsoft decided to establish a corporate research laboratory in 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

Q9. Netflix CEO Reed Hastings made this important observation about dealing with rivals:
a. ‘In a highly competitive marketplace, firms must be paranoid about the multitude of potential rivals.’
b. ‘You can afford to ignore rivals in small markets, but you can never ignore rivals in large markets, such as on-line video companies like YouTube.’
c. ‘There are tens and maybe hundreds of start-ups who think that they are going to eat Netflix’s lunch. The challenge for a management team is to figure out which are real threats and which aren’t.’
d. ‘Netflix’s position is so strong that I don’t worry about new entrants.’

Q10. Forbearance is a particularly aggressive type of competitive attack.
a. true
b. false