Firms following a global strategy strive to offer __________ products and services as well as locate manufacturing, Research and Development, and marketing activities in a limited number of locations.

71.

Firms following a global strategy strive to offer __________ products and services as well as locate manufacturing, Research and Development, and marketing activities in a limited number of locations.    A.  widely differentiated B.  more expensive local C.  internationally differentiated D.  standardized Firms following a global strategy strive to offer standardized products and services as well as to locate manufacturing, Research and Development, and marketing activities in only a few locations.

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets

72.

As in the case of Siebel Systems (now part of Oracle), elements of a global strategy may facilitate the competitive advantage of differentiation by _______.    A.  increased freedom of individual business units to adapt to local tastes B.  the creation of a worldwide network to achieve consistent service regardless of location C.  flexibility in applying Research and Development to meet country-specific needs D.  tailoring products to meet country-specific needs One advantage of a global strategy is that it can enable a firm to create a standard level of quality throughout the world. Tom Siebel, former chairman of Siebel Systems (now part of Oracle), e-business application software developer, says that his customers, global companies like IBM, Zurich Financial Services, and Citicorp, expect the same high level of service and quality, and the same licensing policies, no matter where they do business with them around the world.

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets

73.

Which of the following is not a risk associated with a global strategy?    A.  A firm with only one manufacturing location must export its product, sometimes at great distance from the operation. B.  The geographic concentration of any activity may also tend to isolate that activity from the targeted markets. C.  Concentrating an activity in a single location makes the rest of the firm dependent on that location. D.  The pressures for local adaptation may elevate the cost structure of the firm. Some risks associated with a global strategy include: if a firm has only one manufacturing facility, it must export its output to other markets, some of which may be a great distance from the operation; the geographic concentration of any activity may also tend to isolate that activity from the targeted markets; concentrating an activity in a single location also makes the rest of the firm dependent on that location.

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets

74.

Which one of the following is not a limitation of a global strategy?    A.  limited ability to adapt to local markets B.  the ability to locate activities in optimal locations C.  the concentration of activities may increase dependence on a single facility D.  single locations may lead to higher tariffs and transportation costs Limitations of global strategies include: a limited ability to adapt to local markets, a concentration of activities that may increase dependence on a single facility, and single locations that may lead to higher tariffs and transportation costs.

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets

75.

Elements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by __________.    A.  flexibility in adjusting to local laws and customs B.  decreased duplication of inventories which are often involved in having multiple plants producing similar products C.  decreased shipping and transportation costs inherent in local production D.  economies of scale gained through centralized production of standardized products A multidomestic strategy is one of decentralization, meaning more likelihood of local production. One benefit of this is reduced shipping and transportation costs.

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets

76.

Which of the following is not a limitation of a multidomestic strategy?    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 Limitations of multidomestic strategies include: a decreased ability to realize cost savings through scale economies, a greater difficulty in transferring knowledge across countries, and it may lead to overadaptation as conditions change.

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets

77.

High pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy?    A.  global strategy B.  multidomestic strategy C.  transnational strategy D.  differentiation strategy A transnational strategy is used in industries where the pressures for both local adaptation and lowering costs are high.

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets

78.

Units coordinate their activities with headquarters and with one another. Units adapt to special circumstances only they face. The entire organization draws upon relevant corporate resources. These are all attributes of which type of strategy?    A.  global strategy B.  transnational strategy C.  international strategy D.  multidomestic strategy A principal characteristic of the transnational organization is the integration of unique contributions of all units into worldwide operations. Thus, a joint innovation by headquarters and by one of the overseas units can lead potentially to the development of relatively standardized and yet flexible products and services that are suitable for multiple markets.

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets

79.

Which of the following is a disadvantage of a transnational strategy?    A.  less ability to realize cost savings through scale economies B.  limited ability to adapt to local markets C.  unique managerial challenges in fostering knowledge transfer D.  single locations may lead to higher tariffs and transportation costs Limitations of transnational strategies include unique challenges in determining optimal locations of activities to ensure cost and quality and unique managerial challenges in fostering knowledge transfer.

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets

80.

In order to realize the strongest competitive advantage, firms engaged in worldwide competition must ___________.    A.  require that all of their various business units follow the same strategy regardless of location B.  ensure that all business units follow a strategy strictly tailored to their respective locations C.  pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal results D.  attempt to use the strategy that was most successful in their home country A transnational strategy strives to optimize the trade-offs associated with efficiency, local adaptation, and learning. A core tenet of the transnational model is that the assets and capabilities of the firm are dispersed according to the most beneficial location for each activity. Thus, managers avoid the tendency to either concentrate activities in a central location (a global strategy) or disperse them across many locations to enhance adaptation (a multidomestic strategy).

AACSB: Analytic Blooms: Understand Learning Objective: 07-05 The advantages and disadvantages associated with each of the four basic strategies: international; global; multidomestic; and transnational. Level of Difficulty: 2 Medium Topic: Achieving Competitive Advantage in Global Markets