Strategic Management Theory & Cases An Integrated Approach 11th Edition by Charles W. L. Hill – Test Bank

Strategic Management Theory & Cases An Integrated Approach 11th Edition by Charles W. L. Hill – Test Bank

1. The globalization of production has been decreasing as companies have been facing lower barriers to international trade and location economies.
2. True
3. False

ANSWER: POINTS:

DIFFICULTY:

False

1

Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

2. Despite the globalization of production and markets, many of the most successful companies in certain industries are still clustered in a small number of countries.
3. True
4. False

ANSWER: POINTS:

DIFFICULTY:

True

1

Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

3. Factor endowments, the cost and quality of factors of production, are a prime determinant of the competitive advantage that certain countries have in certain industries.
4. True
5. False

ANSWER: POINTS:

DIFFICULTY:

True

1

Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

4. Southwest Airlines, Sony, and Costco conduct business in two or more countries. These companies can be referred to as multinational companies.
5. True
6. False

ANSWER: True

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: SMIA.HILL.15.08.02- Discuss the motives for expanding internationally NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS: Bloom’s: Application

5. A company can increase its growth rate by taking goods or services developed at horne and selling them internationally.
6. True
7. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.15.08.02- Discuss the motives for expanding internationally NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS: Bloom’s: Knowledge

6. Location economies refer to the economic benefits that arise from performing a value creation activity at an optimal location.
7. True
8. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.15.08.02- Discuss the motives for expanding internationally NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS: Bloom’s: Knowledge

7. A company may create value if it can leverage the skills created within subsidiaries and apply them to other operations within the finn’s global network.
8. True
9. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.15.08.02- Discuss the motives for expanding internationally NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS: Bloom’s: Knowledge

8. By offering a standardized product to the global marketplace and manufacturing that product in each nation in which it does business irrespective of production costs, a multinational company can realize substantial scale economies.
9. True
10. False

ANSWER: False POINTS: I DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.02- Discuss the motives for expanding internationally

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

9. Local responsiveness may be driven by economic and political demands placed on companies by host country governments.
10. True
11. False

ANSWER: True POINTS: I DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.02- Discuss the motives for expanding internationally NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS: Bloom’s: Comprehension

I 0. An international strategy may not be viable in the long term and to survive, companies that can pursue it need to shift toward a global standardization strategy.

1. True
2. False

ANSWER: True POINTS: I DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.03- Review the different strategies that companies use to compete in the global market place

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

1. A transnational strategy makes the most sense when demand for local responsiveness is minimal.
2. True
3. False

ANSWER: False POINTS: I DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.03- Review the different strategies that companies use to compete in the global market place

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

12. A localization strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences and when cost pressures are not too intense.
13. True
14. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.03- Review the different strategies that companies use to compete in the global market place

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

13. Global standardization strategy emphasizes customization and product differentiation.
14. True
15. False

ANSWER: False

POINTS: 1

DIFFICULTY: Moderate

LEARNING OBJECTIVES: SMIA.HILL.l5.08.03- Review the different strategies that companies use to compete in the global market place

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking

KEYWORDS: Bloom’s: Comprehension

14. Companies that pursue a global standardization strategy are trying to develop a business model that simultaneously achieves low costs and differentiates the product offering across geographic markets.
15. True
16. False

ANSWER: False

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.03- Review the different strategies that companies use to compete in the global market place

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

15. Most manufacturing companies begin their global expansion by exporting.
16. True
17. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.04- Explain the pros and cons of different modes for entering foreign markets

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

16. When a company licenses its technology it can quickly lose control over it.
17. True
18. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.04- Explain the pros and cons of different modes for entering foreign markets

NATIONAL STANDARDS: United States- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

17. One advantage of a joint venture is that a company may benefit from a local partner’s knowledge of the many dimensions of a host country.
18. True
19. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.04- Explain the pros and cons of different modes for entering foreign markets

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Knowledge

18. If a company’s competitive advantage derives from its control of proprietary teclrnological know-how, it should either license its teclrnology to others or pursue a joint venture.
19. True
20. False

ANSWER: False

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.04- Explain the pros and cons of different modes for entering foreign markets

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

19. Companies should form strategic alliances with frrms that have a reputation for being opportunistic.
20. True
21. False

ANSWER: False

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.04- Explain the pros and cons of different modes for entering foreign markets

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

20. Alliances can be designed to make it difficult (if not impossible) to transfer teclrnology not meant to be transferred.
21. True
22. False

ANSWER: True

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.04- Explain the pros and cons of different modes for entering foreign markets

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

21. Which of the following has occurred in international trade over the past half-century?
22. There has been a dramatic increase in the barriers to international trade.
23. Tariff rates on manufactured goods traded by advanced nations have fallen.
24. Regulations prohibiting foreign companies from entering domestic markets and establishing production facilities have increased.
25. The volume of world trade has decreased dramatically.
26. There has been a decline in the value of foreign direct investment.

ANSWER: POINTS:

DIFFICULTY:

b

I

Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

22. Which of the following is not an attribute of a national or country-specific environment that has an impact on global competitiveness of companies located in that nation?
23. Factor endowments
24. Local demand conditions
25. Related and supporting industries
26. Strategy, structure, and rivalry of firms within the nation e. Advertising expenses

ANSWER: POINTS:

DIFFICULTY:

e

I

Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

23. Global economies of scale can be realized by: a. restricting the expansion of overseas sales. b. limiting the utilization of production facilities. c. curbing bargaining power with suppliers.
24. decreasing cost savings through learning effects.
25. spreading the fixed costs associated with developing.

ANSWER: POINTS:

DIFFICULTY:

e

I

Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

24. Which of the following statements is true in the context oflocal demand conditions?
25. Companies are typically least sensitive to the needs of their closest customers.
26. Home demand plays little role in helping companies upgrade their national competitive advantage.
27. A nation’s companies gain competitive advantage if their domestic customers are sophisticated and demanding.
28. The characteristics of international demand alone shape the attributes of a company’s products; not local demand.
29. Local demand characteristics have little role to play in creating pressure for innovation and quality.

ANSWER: POINTS:

DIFFICULTY:

c

1

Moderate

LEARNING OBJECTIVES: SM1A.HlLL.15.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

25. Which of the following is not a factor of production?
26. Land b. Labor
27. Raw materials
28. Competitive forces
29. Managerial sophistication

ANSWER: POINTS:

DIFFICULTY:

d

1

Easy

LEARNING OBJECTIVES: SM1A.HlLL.15.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

26. Black and Decker, Capitol One, Gillette, and Unilever are all companies that conduct business in two or more national markets. These companies are known as
27. bimarket companies. b. national companies.
28. domestic companies.
29. multinational companies. e. localized companies.

ANSWER: POINTS:

DIFFICULTY:

d

1

Moderate

LEARNING OBJECTIVES: SM1A.HlLL.15.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Analytic

KEYWORDS: Bloom’s: Application

27. Which of the following statements is true in the context of attributes of national competitive advantage?
28. Factor endowments do not encompass aspects such as managerial sophistication. b. Companies are typically least sensitive to the needs of their closest customers.
29. The benefits of investments in advanced factors of production by related and supporting industries are confined to those industries.
30. Domestic rivalry creates pressures to increase costs and avoid investing in upgrading advanced factors.
31. The nature of home demand shapes the attributes of domestically made products .

ANSWER: POINTS:

DIFFICULTY:

e

1

Moderate

LEARNING OBJECTIVES: SM1A.HILL.15.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

28. Swedish strength in fabricated steel products (such as ball bearings and cutting tools) has drawn on strengths in Sweden’s specialty steel industry. This is an example of which of the following attributes that impact national competitive advantage?
29. Local demand conditions
30. Competitiveness of related and supporting industries c. Intensity of rivalry in an industry
31. Factor endowments
32. Differences in distribution channels

ANSWER: POINTS:

DIFFICULTY:

b

1

Moderate

LEARNING OBJECTIVES: SM1A.HILL.15.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

29. The globalization of production has caused fmns to:
30. lower their market share. b. lower their cost structure.
31. centralize their production process. d. curb international competition.
32. limit the number of market segments.

ANSWER: POINTS:

DIFFICULTY:

b

1

Easy

LEARNING OBJECTIVES: SM1A.HILL.15.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

30. Which of the following statements is true in the context of globalization of production and markets?
31. Globalization of production has significantly increased the costs for many industries.
32. The globalization of markets and production has failed to threaten companies’ horne markets.
33. Consolidated oligopolies continue to be dominated by a small number of companies despite globalization. d. The shift from national to global markets has curbed competitive rivalry in many industries.
34. Globalization has significantly increased the threat of entry.

ANSWER: POINTS:

DIFFICULTY:

e

1

Easy

LEARNING OBJECTIVES: SMIA.HILL.15.08.01- Understand the process of globalization and how it impacts a company’s strategy

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Knowledge

31. When a company expands its sales volume through international expansion, it can realize cost savings from economies of scale through all of the following except:
32. spreading fixed costs over its global sales volume. b. utilizing its production facilities more intensely.
33. increased bargaining power with its suppliers.
34. learning effects associated with higher volume. e. adopting high cost structures.

ANSWER: e

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.15.08.02- Discuss the motives for expanding internationally NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS: Bloom’s: Comprehension

32. When a company performs a value creation activity in a region that is optimal for that activity, wherever in the world that might be, it is trying to capitalize on:
33. negative feedback loops. b. economies of scope.
34. the transnational strategy.
35. location economies.
36. its localization strategy.

ANSWER: d

POINTS: 1

DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.15.08.02- Discuss the motives for expanding internationally NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS: Bloom’s: Knowledge

33. Which of the following is not a necessity for leveraging the skills of global subsidiaries?
34. Incentives for local managers to share knowledge and ideas
35. Awareness among managers that competencies can develop anywhere c. Assertion of monopoly of the corporate center over subsidiaries
36. Transfer of competencies around the company
37. Incentives that encourage employees to take necessary risks

ANSWER: c POINTS: I DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.02- Discuss the motives for expanding internationally

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

34. Global expansion:
35. is feasible only for non-technology based companies.
36. can enable companies to increase their profitability and grow their profits more rapidly. c. has significantly decreased in the recent years as the industry barriers are now higher. d. does not involve selling existing products to new markets in different countries.
37. is not feasible for service-based firms.

ANSWER: b POINTS: I DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.02- Discuss the motives for expanding internationally NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS: Bloom’s: Knowledge

35. Which of the following factors increases pressures for cost reductions?
36. Meaningful differentiation between products b. Reduced international competition
37. Competitors that are based in high-cost locations
38. High switching costs
39. Persistent excess capacity

ANSWER: e POINTS: I DIFFICULTY: Moderate

36. Which of the following factors increases pressures for local responsiveness?
37. Powerful buyers
38. Uniformity in distribution channels c. Host govermnent demands
39. Similarities in customer tastes and preferences
40. Competitors that are based in high-cost locations

ANSWER: c POINTS: I DIFFICULTY: Moderate

LEARNING OBJECTIVES: SMIA.HILL.l5.08.02- Discuss the motives for expanding internationally

NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic

KEYWORDS: Bloom’s: Comprehension

37. 3 Differences in tastes and preferences:
38. increase pressures for cost reductions.
39. do not affect service-based firms.

1. increase pressures for local responsiveness.
2. reduce pressures from the host government.
3. significantly decrease R&D costs of a company.

ANSWER: c POINTS: I DIFFICULTY: Easy

LEARNING OBJECTIVES: SMIA.HILL.l5.08.02- Discuss the motives for expanding internationally NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic KEYWORDS: Bloom’s: Knowledge

38. 3 Host govermnent demands generally:
39. increase pressures for local responsiveness.
40. decrease pressures for cost reductions. c. do not encompass local content rules.
41. compel companies to abandon localization strategies.
42. impede a company’s ability to differentiate its product offering across national borders.

ANSWER: a POINTS: I DIFFICULTY: Easy