BUS 345 EXAM QUESTIONS AND ANSWERS
Core competency - Answers - refers to skills within the firm that competitors cannot
easily match or imitate.14 These skills may exist in any of the firm's value creation
activities—production, marketing, R&D, human resources, logistics, general
management, and so on
universal needs - Answers - when the tastes and preferences of consumers in different
nations are similar if not identical. Examples: steel, sugar.
value creation - Answers - Measured by difference between a firm's costs of production
and the quality that consumers perceive in its products
strategic alliance - Answers - are cooperative agreements between potential or actual
competitors, as it applies to international business and this chapter. The term is often
used to embrace a variety of agreements between actual or potential competitors,
including cross-shareholding deals, licensing arrangements, formal joint ventures, and
informal cooperative arrangements.
turnkey project - Answers - Contractor agrees to handle every detail of the project fora
foreign client, including the training of operating personnel.
pioneering costs - Answers - costs that an early entrant has to bear that a later entrant
can avoid
inco terms - Answers - are a set of 11 internationally recognized rules which define the
responsibilities of sellers and buyers. Incoterms specify who is responsible for paying
for and managing the shipment, insurance, documentation, customs clearance, and
other logistical activities.
Learning effects vs economies of scale - Answers - *Learning effects* are labor
productivity and management efficiency.
*Economies of Scale* lowers a firm's unit costs and increases its profitability, it may not
be possible unless firm serves global markets and gives bargaining power with
suppliers.
Primary activities vs support activities - Answers - *Primary activities* include Design,
creation, and delivery of the product, marketing, support, and after-sale service, R&D is
concerned with design of products and production processes, production is concerned
with the creation of a good or service, marketing and sales can increase perceived
value of a product and discover customer needs, service activity provides after-sale
service and support.
, *Support activities* include providing inputs that allow the primary activities to occur,
information systems can alter efficiency and effectiveness with which a firm manages its
other value creation activities, logistics controls transmission of physical materials
through thevalue chain, human resources ensures company has the right mix of
skilledpeople; ensures adequate training, motivation, and compensation, infrastructure
includes organization structure, control systems, and culture of the firm.
Cost pressures vs pressures for local responsiveness - Answers - *cost pressures*
include requiring a firm to try to lower the costs of value creation and greater in
industries producing commodity-type products.
*Local responsiveness* include differences in consumer tastes and preferences,
differences in infrastructure and traditional practices, differences in distribution channels
and host-government demands.
Global standardization strategy vs localization strategy - Answers - The *global
standardization strategy* looks to reap cost reductions that come from economies of
scale, learning effects, location economies and the goal is to pursue low-cost strategy
on global scale.
*The localization strategy* customizes goods or services so they are a good match to
tastes and preferences in different national markets.
why does the Argentina want to dollarize their economy and (b) what are the obstacles
to Argentina's dollarization plan? - Answers - -Milei claims that it will cure the country's
hyperinflation problem
-One obstacle is that the central bank would have to lose control of monetary policy.
-Another obstacle is that the central bank wouldn't have the ability to print.
-Another is that they need to stabilize their economy first and their foreign exchange
reserves are more than $10 billion in the red.
Why the scale of entry is important for success for a first-time entry of a MNC in a
foreign country? Discuss - Answers - The scale of entry is very important for success for
a first-time entry of a MNC in a foreign country. When entering a market on a large
scale, it involves significant resources and rapid entry. The need to weigh the
advantages is crucial when large scale entry into the foreign market occurs. Small-scale
entry allows a firm to learn about a foreign market while limiting the firm's exposure to
that market. Small-scale entry is a way to gather information about a foreign market
before deciding whether to enter on a significant scale and how best to enter
The motorcycle is used differently in South and Southeast Asia. Watch the following
YouTube video and explain what a Western motorcycle company should do to adapt its
product and change marketing strategies in these regions - Answers - Western
motorcycle companies should make larger motorcycles that can safely hold that many
people/kids. They should keep it around the same price point so they don't continue to
buy the smaller ones, putting their kids in danger.
Core competency - Answers - refers to skills within the firm that competitors cannot
easily match or imitate.14 These skills may exist in any of the firm's value creation
activities—production, marketing, R&D, human resources, logistics, general
management, and so on
universal needs - Answers - when the tastes and preferences of consumers in different
nations are similar if not identical. Examples: steel, sugar.
value creation - Answers - Measured by difference between a firm's costs of production
and the quality that consumers perceive in its products
strategic alliance - Answers - are cooperative agreements between potential or actual
competitors, as it applies to international business and this chapter. The term is often
used to embrace a variety of agreements between actual or potential competitors,
including cross-shareholding deals, licensing arrangements, formal joint ventures, and
informal cooperative arrangements.
turnkey project - Answers - Contractor agrees to handle every detail of the project fora
foreign client, including the training of operating personnel.
pioneering costs - Answers - costs that an early entrant has to bear that a later entrant
can avoid
inco terms - Answers - are a set of 11 internationally recognized rules which define the
responsibilities of sellers and buyers. Incoterms specify who is responsible for paying
for and managing the shipment, insurance, documentation, customs clearance, and
other logistical activities.
Learning effects vs economies of scale - Answers - *Learning effects* are labor
productivity and management efficiency.
*Economies of Scale* lowers a firm's unit costs and increases its profitability, it may not
be possible unless firm serves global markets and gives bargaining power with
suppliers.
Primary activities vs support activities - Answers - *Primary activities* include Design,
creation, and delivery of the product, marketing, support, and after-sale service, R&D is
concerned with design of products and production processes, production is concerned
with the creation of a good or service, marketing and sales can increase perceived
value of a product and discover customer needs, service activity provides after-sale
service and support.
, *Support activities* include providing inputs that allow the primary activities to occur,
information systems can alter efficiency and effectiveness with which a firm manages its
other value creation activities, logistics controls transmission of physical materials
through thevalue chain, human resources ensures company has the right mix of
skilledpeople; ensures adequate training, motivation, and compensation, infrastructure
includes organization structure, control systems, and culture of the firm.
Cost pressures vs pressures for local responsiveness - Answers - *cost pressures*
include requiring a firm to try to lower the costs of value creation and greater in
industries producing commodity-type products.
*Local responsiveness* include differences in consumer tastes and preferences,
differences in infrastructure and traditional practices, differences in distribution channels
and host-government demands.
Global standardization strategy vs localization strategy - Answers - The *global
standardization strategy* looks to reap cost reductions that come from economies of
scale, learning effects, location economies and the goal is to pursue low-cost strategy
on global scale.
*The localization strategy* customizes goods or services so they are a good match to
tastes and preferences in different national markets.
why does the Argentina want to dollarize their economy and (b) what are the obstacles
to Argentina's dollarization plan? - Answers - -Milei claims that it will cure the country's
hyperinflation problem
-One obstacle is that the central bank would have to lose control of monetary policy.
-Another obstacle is that the central bank wouldn't have the ability to print.
-Another is that they need to stabilize their economy first and their foreign exchange
reserves are more than $10 billion in the red.
Why the scale of entry is important for success for a first-time entry of a MNC in a
foreign country? Discuss - Answers - The scale of entry is very important for success for
a first-time entry of a MNC in a foreign country. When entering a market on a large
scale, it involves significant resources and rapid entry. The need to weigh the
advantages is crucial when large scale entry into the foreign market occurs. Small-scale
entry allows a firm to learn about a foreign market while limiting the firm's exposure to
that market. Small-scale entry is a way to gather information about a foreign market
before deciding whether to enter on a significant scale and how best to enter
The motorcycle is used differently in South and Southeast Asia. Watch the following
YouTube video and explain what a Western motorcycle company should do to adapt its
product and change marketing strategies in these regions - Answers - Western
motorcycle companies should make larger motorcycles that can safely hold that many
people/kids. They should keep it around the same price point so they don't continue to
buy the smaller ones, putting their kids in danger.
