Companion 2026/2027
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1. An international diversification strategy is best described as a strategy through which
a firm: -ANSWER✅✅✅expands production or sales of its goods across the borders of
global regions and countries into potentially large number of geographic locations of
markets.
2. What is the primary advantage of a 'regionalization' strategy for a firm expanding
internationally? -ANSWER✅✅✅It allows firms to focus on a specific region where
markets are more similar, which allows a degree of integration and resource sharing.
3. According to the text, a clothing manufacturer establishing a factory in a country with
lower labor costs is primarily leveraging which incentive for international expansion? -
ANSWER✅✅✅Gaining access to relatively inexpensive labor.
4. The 'liability of foreignness' refers to a set of costs that firms face when entering
foreign markets. Which scenario best illustrates this concept? -ANSWER✅✅✅A firm
having to analyze how distance (cultural, geographic, or domestic) between markets
affects its ability to compete.
5. What is the term for the trend, driven by a popular backlash in advanced economies,
that can hurt multinational companies' interests and lead to increased trade restrictions?
-ANSWER✅✅✅Regionalization
6. A firm that establishes R&D facilities in multiple international regions to absorb new
technical expertise and develop innovations is primarily taking advantage of which
international strategy incentive? -ANSWER✅✅✅Enhancing the use of rapidly
changing technologies.
7. What is the main purpose of establishing a global value chain? -ANSWER✅✅✅To
integrate a firm's operations on a global scale to better serve customers in different
countries.