International Business Exam 4 Questions with Complete Solutions

The actions that managers take to attain the goals of the firm are referred to as a firm's strategy. - ANSWER-True Profit growth is measured by the percentage increase in net profits over time. - ANSWER-True The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products. - ANSWER-True Consumer surplus captures some of the value of a product thereby reducing the price a firm can charge for it. - ANSWER-True A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a low-cost strategy. - ANSWER-False According to Michael Porter, all positions on the efficiency frontier are viable. - ANSWER-False In terms of attaining a competitive advantage, support activities can be as important as the primary activities of the firm. - ANSWER-True The term organizational structure refers to the totality of a firm's organization, including organization architecture, control systems and incentives, organizational culture, processes, and people. - ANSWER-False Successful global expansion requires the transfer of core competencies to foreign markets where indigenous competitors lack them. - ANSWER-True The experience curve refers to systematic increases in production costs that have been observed to occur over the life of a product. - ANSWER-False The rate of return that a firm makes on its invested capital is referred to as: A: Process value B: Strategic Fit C: Stakeholder Return D: Profit Growth E: Profitability - ANSWER-E. profitability In general, the more value customers place on a firm's products: A: the higher the competitive pressure from other firms. B: the lesser the quality of the product.