______ is most frequently used in manufacturing industries and involves granting a foreign company the right to create a company's product within a foreign country in exchange for a fee.

______ is most frequently used in manufacturing industries and involves granting a foreign company the right to create a company's product within a foreign country in exchange for a fee.

A. Joint venture
B. Licensing
C. Exporting
D. Franchising
E. Strategic alliance


Answer: B. Licensing

Two major telecommunication corporations in the United States, Stintson Pvt. Ltd. and Gavin Incorporation worked together to create a new entity with the name of Stintson-Gavin Incorporation. Both the firms believed that this would enable them to increase their business performance. Stintson-Gavin Incorporation started to operate by offering telecommunication and broadband services. Stintson-Gavin Incorporation is an example of a _____.

Two major telecommunication corporations in the United States, Stintson Pvt. Ltd. and Gavin Incorporation worked together to create a new entity with the name of Stintson-Gavin Incorporation. Both the firms believed that this would enable them to increase their business performance. Stintson-Gavin Incorporation started to operate by offering telecommunication and broadband services. Stintson-Gavin Incorporation is an example of a _____.

A. strategic alliance
B. sole proprietorship
C. wholly owned subsidiary
D. partly owned subsidiary
E. joint venture


Answer: E. joint venture

Which of the following is true of franchising?

Which of the following is true of franchising?

A. Franchising requires heavy financial investment by the franchisor.
B. Local franchisees must pay the vast majority of the expenses associated with getting their businesses up and running.
C. The decision to franchise means that a firm will get to enjoy a large portion of the profits made under its brand name.
D. Franchises are only successful if franchisees are provided with a complex business model.
E. Franchising is most frequently used in manufacturing industries.


Answer: B. Local franchisees must pay the vast majority of the expenses associated with getting their businesses up and running.

Sandré and Moreau Pvt. Ltd. is a firm based in France that manufactures and sells dark chocolate bars and other chocolates under the brand name, ChocoNoir. The firm sold the right to Duvall & Reese Ltd., based in the United States, to use its brand name, products, and processes to manufacture and sell dark chocolate bars in return for a payment and a percentage of the revenues that would be gained by Duvall & Reese Ltd. Which of the following was being implemented by Sandré and Moreau Pvt. Ltd.?

Sandré and Moreau Pvt. Ltd. is a firm based in France that manufactures and sells dark chocolate bars and other chocolates under the brand name, ChocoNoir. The firm sold the right to Duvall & Reese Ltd., based in the United States, to use its brand name, products, and processes to manufacture and sell dark chocolate bars in return for a payment and a percentage of the revenues that would be gained by Duvall & Reese Ltd. Which of the following was being implemented by Sandré and Moreau Pvt. Ltd.?

A. Licensing
B. Exporting
C. Franchising
D. Joint venture
E. Strategic alliance


Answer: C. Franchising

A firm can develop a wholly-owned subsidiary by purchasing an existing operation from a local company or another foreign operator.

A firm can develop a wholly-owned subsidiary by purchasing an existing operation from a local company or another foreign operator.

A. True
B. False


Answer: A. True

In a ________, two or more companies work together cooperatively, but no new organization is formed. The partnering companies share decision-making authority, control of the operation, and any profits that the relationship creates.

In a ________, two or more companies work together cooperatively, but no new organization is formed. The partnering companies share decision-making authority, control of the operation, and any profits that the relationship creates.

A. Exporting agreement
B. Joint venture
C. Franchising arrangement
D. Licensing agreement
E. Strategic alliance


Answer: E. Strategic alliance

According to Kim and Mauborgne's text, Blue Ocean Strategy, most companies enter established, often highly competitive markets, and fight to outperform rivals through traditional strategies of differentiation or cost leadership, which is known as a ______ approach.

According to Kim and Mauborgne's text, Blue Ocean Strategy, most companies enter established, often highly competitive markets, and fight to outperform rivals through traditional strategies of differentiation or cost leadership, which is known as a ______ approach.

A. "black sea"
B. "red sea"
C. "no ocean"
D. "red ocean"
E. "black ocean"


Answer: D. "red ocean"

Which one of these is NOT an international strategy?

Which one of these is NOT an international strategy?

A. multi-domestic
B. global
C. transnational
D. All of the above are international strategies
E. intercontinental


Answer: E. intercontinental

A firm using a transnational strategy:

A firm using a transnational strategy:

A. tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.
B. prioritizes the need to gain economies of scale.
C. offers the same products across all markets.
D. places heavy emphasis on being responsive to local requirements within each of its markets.
E. reduces diversification of business risk by locating all its business operations in the home country.


Answer: A. tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.

Ark Inc. is an international watch manufacturer that sells a variety of watches. The management of Ark Inc. prioritizes efficiency over responsiveness to local requirements. They management aims to gain economies of scale, by offering the same product in all their markets. This indicates that Arc Inc. is using a _____ strategy.

Ark Inc. is an international watch manufacturer that sells a variety of watches. The management of Ark Inc. prioritizes efficiency over responsiveness to local requirements. They management aims to gain economies of scale, by offering the same product in all their markets. This indicates that Arc Inc. is using a _____ strategy.

A. multidomestic
B. transnational
C. decentralization
D. disintermediation
E. global


Answer: E. global

Which of the following is true of a firm using a global strategy to build efficiency across different nations?

Which of the following is true of a firm using a global strategy to build efficiency across different nations?

A. It tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.
B. It involves reducing diversification of business risk by locating all the business operations in the home country.
C. It stresses the need to gain economies of scale by offering the same products in each market.
D. It sacrifices efficiency.
E. It places heavy emphasis on being responsive to local requirements within each of its markets.


Answer: C. It stresses the need to gain economies of scale by offering the same products in each market.

Which of the following is true of a firm using a global strategy to build efficiency across different nations?

Which of the following is true of a firm using a global strategy to build efficiency across different nations?

A. It places heavy emphasis on being responsive to local requirements within each of its markets.
B. It sacrifices efficiency.
C. It stresses the need to gain economies of scale by offering the same products in each market.
D. It tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.
E. It involves reducing diversification of business risk by locating all the business operations in the home country.


Answer: C. It stresses the need to gain economies of scale by offering the same products in each market.

Which of the following is true about a multi domestic strategy?

Which of the following is true about a multi domestic strategy?

A. It places heavy emphasis on being responsive to local requirements within each of its markets.
B. It involves reducing diversification of business risk by locating all the business operations in the home country.
C. It places heavy emphasis on being efficient.
D. It stresses the need to gain economies of scale by offering essentially the same products or services in each market.
E. It tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.


Answer: A. It places heavy emphasis on being responsive to local requirements within each of its markets.

Which one of these is NOT a factor within the Diamond Model?

Which one of these is NOT a factor within the Diamond Model?

A. awareness, motivation, and creativity
their home country's demand conditions
B. related and supporting industries within their home country
C. strategy, structure, and rivalry among their domestic competitors
D. availability to create strategic joint venture alliances


Answer: D. availability to create strategic joint venture alliances

SK Manufacturing Group is a firm based in California that produces rail locomotives. The firm does not need to depend on imported bearings, axle cars, and streamliners as there are many firms in the U.S. that manufacture these equipments. The easy availability of components has fuelled the firm's growth. According to the diamond model, SK Manufacturing Group benefits from:

SK Manufacturing Group is a firm based in California that produces rail locomotives. The firm does not need to depend on imported bearings, axle cars, and streamliners as there are many firms in the U.S. that manufacture these equipments. The easy availability of components has fuelled the firm's growth. According to the diamond model, SK Manufacturing Group benefits from:

A. firm rivalries.
B. demand conditions.
C. related and supporting industries.
D. firm strategies.
E. firm structures.


Answer: C. related and supporting industries.

In The World Is Flat: A Brief History of the 21st Century, Friedman argued that technological advances and increased interconnections are leveling the competitive playing field between developed and emerging countries. This means that companies exist in a "___ world" because economies across the globe are converging on a single integrated global system.

In The World Is Flat: A Brief History of the 21st Century, Friedman argued that technological advances and increased interconnections are leveling the competitive playing field between developed and emerging countries. This means that companies exist in a "___ world" because economies across the globe are converging on a single integrated global system.

A. dynamic
B. flat
C. inclusive
D. social media
E. aggressive


Answer: B. Flat

Just-in-time inventory management believes in storing large amounts of parts and material.

Just-in-time inventory management believes in storing large amounts of parts and material.

A. True
B. False


Answer: B. False

Meadow Range Pvt. Ltd. is a firm based in France that has one of the finest wine breweries in the country. Due to the availability of many grape varieties, and suitable climatic conditions for growing grapes in France, Meadow Range has an advantage when competing in the international market. According to the diamond model, Meadow Range benefits from:

Meadow Range Pvt. Ltd. is a firm based in France that has one of the finest wine breweries in the country. Due to the availability of many grape varieties, and suitable climatic conditions for growing grapes in France, Meadow Range has an advantage when competing in the international market. According to the diamond model, Meadow Range benefits from:

A. demand conditions.
B. financial conditions.
C. factor conditions.
D. firm strategies.
E. firm structures.


Answer: C. factor conditions.

Factor conditions differ from demand conditions in that factor conditions refers to:

Factor conditions differ from demand conditions in that factor conditions refers to:

A. the nature of domestic customers.
B. the nature of international customers.
C. the level of competition a firm faces in its home country.
D. the extent to which firms' complementary industries are helpful.
E. the nature of raw materials.


Answer: E. the nature of raw materials.

Sashes Inc. is a firm that provides apparels, footwear, and bags in the U.S, and exports some of its products to England and Canada. The firm conducts extensive research in the U.S. to understand the preferences of customers, such as colors and designs. As a result of American customers' high standards of quality, Sashes Inc. ensures that its products are durable, as well as stylish. This helps it to compete in the international market. According to the diamond model, Sashes Inc. benefits from:

Sashes Inc. is a firm that provides apparels, footwear, and bags in the U.S, and exports some of its products to England and Canada. The firm conducts extensive research in the U.S. to understand the preferences of customers, such as colors and designs. As a result of American customers' high standards of quality, Sashes Inc. ensures that its products are durable, as well as stylish. This helps it to compete in the international market. According to the diamond model, Sashes Inc. benefits from:

A. demand conditions.
B. related and supporting industries.
C. factor conditions.
D. firm strategies.
E. firm structures.


Answer: A. demand conditions.