Bus 401 VanderKelen Midterm 3 || 100% no Error.
Globalization of Business correct answers From the 70's to present, taxes have dropped over
100x and allowed business to do more things internationally
Production/Market for Products/Services is now global
28x increase
Foreign Direct Investment correct answers Direct investment of business or production in
another country
Multinational Firms correct answers Firms that sell/produce in multiple countries
Globalization correct answers Spread of businesses across international borders
Why firms expand internationally? correct answers Growth
Efficiency
Managing Risk
Knowledge
Customer/Competitor Response
Growth correct answers Many firms saturate home markets and the only way to grow is through
international expansion
Efficiency correct answers Lower cost resources:
raw material/labor cost
Longer Product Life:
firms can leverage prior products/capabilities
, Economies of Scope/Scale
spread costs among more units/things
Managing Risk correct answers Economic downturns usually don't affect global businesses as
much
Knowledge correct answers New insights from international customers
Responding to Customers/Competitors correct answers Mostly B2B firms
Go global because of customers (international clients) or rivals
Product Life Cycle correct answers Stages product/Service go through
Where to Expand correct answers Where are the most potential customers?
Think about risks
C.A.G.E.
Cultural Distance
Administrative Distance
Geographic Distance
Economic Distance
Expansion Risks correct answers Market-Drivin (will they buy your product)
Political (laws)
Economic (stability)
Cultural Distance correct answers Differences in language and culture, etc
Subtle differences are huge
Globalization of Business correct answers From the 70's to present, taxes have dropped over
100x and allowed business to do more things internationally
Production/Market for Products/Services is now global
28x increase
Foreign Direct Investment correct answers Direct investment of business or production in
another country
Multinational Firms correct answers Firms that sell/produce in multiple countries
Globalization correct answers Spread of businesses across international borders
Why firms expand internationally? correct answers Growth
Efficiency
Managing Risk
Knowledge
Customer/Competitor Response
Growth correct answers Many firms saturate home markets and the only way to grow is through
international expansion
Efficiency correct answers Lower cost resources:
raw material/labor cost
Longer Product Life:
firms can leverage prior products/capabilities
, Economies of Scope/Scale
spread costs among more units/things
Managing Risk correct answers Economic downturns usually don't affect global businesses as
much
Knowledge correct answers New insights from international customers
Responding to Customers/Competitors correct answers Mostly B2B firms
Go global because of customers (international clients) or rivals
Product Life Cycle correct answers Stages product/Service go through
Where to Expand correct answers Where are the most potential customers?
Think about risks
C.A.G.E.
Cultural Distance
Administrative Distance
Geographic Distance
Economic Distance
Expansion Risks correct answers Market-Drivin (will they buy your product)
Political (laws)
Economic (stability)
Cultural Distance correct answers Differences in language and culture, etc
Subtle differences are huge
