1. Golden Gate University MGT 179 Week 6
Quiz
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MGT 179 Week 6 Quiz
Question1
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Whichof the followingisanadvantage of acquisitionsasa meansof enteringforeignmarkets?
Selectone:
a. acquiredfirsare oftenundervaluedandhence assetscanbe purchasesat minimal prices.
b. It ismuch easiertochange the culturesof an existingorganizationthanbuildanew one.
c. Theyare quickto execute andhelpfirmstorapidlybuildtheirpresence inthe foreigntargetmarket.
d. Theygive firmsaccessto valuable intangible assetswhileminimizingapileupof intangible assets.
e. It iseasiertochange the operatingroutinesof acquiredfirmsthanestablishroutinesinnew
subsidiaries.
Question2
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A global car manufacturerwantstostart productioninChina. While cateringtolocal responsiveness,
whatcan the firmdo getscale economies?
Selectone:
a. manufacture onlyone type of car andsell itinall the internationalmarkets.
b. increase costswheneverpossible
c. use commonvehicle platformsandcomponentsacrossmanydifferentmodels.
d. increase the duplicationof functionsrequiredforeachoperation
e. shortenthe productionrunsforeachcomponent
Question3
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Whichof the followingcaveatsismostlikelytodiscourage globalexpansionof businesses.
Selectone:
a. highconsumers'reservationprices
b. lowtransportationcosts
c. masscustomization
d. trade barriers
e. economiesof scale
3. Question4
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Whichof the followingistrue aboutchannel quality
Selectone:
a. the lackof a high-qualitychannel doesnotimpede marketentry.
b. the qualityof retailersisvariable inemergingmarketsandlessdevelopedcountries
c. Aninternational businesscannotestablishitsowndistributionchannelwhenthe existingchannel
qualityispoor
d. channel qualityreferstoameasure of the numberof intermediariesbetweenthe manufacturerand
consumer.
e. the qualityof retailersisvariableindevelopednations
Question5
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In termsof communicationstrategy,inhighlydevelopedcountriessuchasthe UnitedStates
Selectone:
a. cultural barriersdo notexist
b. source effectsare alwayspositive
c. countryof origineffectsare notapplicable
d. pull strategiesare more important thanpushstrategies
4. e. noise isextremelyhigh
Question6
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Firmsthat compete inthe global marketplace typicallyface twotypesof competitivepressure:
Selectone:
a. product standardizationandmovingupthe experience curve
b. laborskill enhancementandminimizingeconomiesof scale
c. global promotionsandmovingdownthe efficiencyfrontier
d. cost reductionsandbeinglocallyresponsive
e. increasinginvestmentandminimizingconsumersurplus
Question7
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Whichof the followingisanexample of first-moveradvantage?
Selectone:
a. The increasedprobabilityof survivinginaforeignmarket
b. The avoidance of pioneeringcoststhata laterentrantintothe foreignmarkethasto bear
c. The The opportunitytoobserve andlearnfromthe mistakesof otherentrants
5. d. The abilitytocreate switchingcoststhattie customersintoone'sproductsorservices
e. The opportunitytoobserve andlearnfromthe mistakesof otherentrants
Question8
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Whichof the followingisacharacteristicof a fragmentedretail system?
Selectone:
a. lowersalescall tosalesorderratios
b. promotionof directinteractionbetweenretailersandfirms.
c. relativelysmallersalesforce comparedtoconcentratedretail systems
d. longchannelsof distribution
e. single-layerdistributionsystems
Question9
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Whichof the followingisanadvantage of franchisingasa mode of entryintoforeignmarkets?
Selectone:
a. The franchiserisrelievedof manyof the costsand risksof openinga foreignmarketonitsown.
b. The franchisercaneasilymaintainuniformqualityacrossmanygeographicallydispersedfranchisees.
6. c. Manufacturingconcernscan be effectivelycoordinateacrossadjacentprocresses.
d. the franchiserisallowedtotake profitsoutof one countryto supportcompetitive attacksinanother.
e. The franchisercansupportits short-terminterestsinacountrywithan unstable economy.
Question10
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Whichindustryisoftenthoughtof as one inwhichglobal standardizationof the marketingmixisthe
norm?
Selectone:
a. pharmaceutical
b. financial services
c. heavymachinery
d. electronics
e. retail
Question11
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If a firmisunable tokeepitsnational marketsseparate,individualsorbusinessesmayundercutits
attemptat price discriminationbyengagingin:
Selectone:
7. a. speculation
b. dumping
c. predatorypricing
d. arbitrage
e. forecasting
Whichof the followingistrue accordingto Theodore Levitt'sarticle inthe HarvardBusinessReview
aboutthe globalizationof worldmarkets?
Selectone:
a. The global corporationsellsdifferentthingsindifferentways
b. Ancientdifferencesinnational tastesormodesof doingbusinessare reinforced.
c. The global corporationoperatesconsistentlyathighrelative cost
d. Technologyhasledtothe emergence of global marketsforstandardizedconsumerproducts
e. Accustomeddifferencesinnationalorregional preferencesare significantinworldmarkets
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Whichof the followingisadrawback of licensingasa mode of entryintoforeignmarkets?
Selectone:
a. a firmthat entersintoalicensingdeal withaforeigncountrywillhave nolong-terminterestinthat
country.
b. licensingdoesnotgive afirmtightcontrol overmanufacturing,marketingandstrategy
c. licensorhastobear all costsand risksassociatedwithdevelopingaforeignmarket
d. licensingdoesnotbenefitfirmslackingthe capital toexpandoperationsoverseas
e. licensingdealsfail whenthere are barrierstoforeigninvestmentinaparticularcountry
8. Question14
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Whichof the followingfactorslimitsafirm'sabilitytouse the same marketingmessage?
Selectone:
a. fragmentedretailssystems
b. cultural differences
c. channel quality
d. concentratedretail systems
e. channel exclusivity
Question15
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Whichof the followingismostlikelytonecessitatethe delegationof marketingfunctionstonational
subsidiaries?
Selectone:
a. lack of product customization
b. pressuresforincreasingconsumers'reservationprice
c. pressuresfordecreasingconsumersurplus
d. pressuresforincreasingeconomiesof scale
9. e. differencesindistributionchannels
Question16
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The sogo shoshaof Japan:
Selectone:
a. have monopolizedthe exportmarketinthe country
b. exclusivelyserve the largestandmostprestigiouscompaniesinJapan
c. proactivelyandcontinuouslyseekexportopportunitiesfortheiraffiliatedcompanies
d. have officesconcentratedinthe businessdistrictof Tokyo
e. considerexportonlywhenthereisexcessproductionathome
Questiontext
Whichof the followingisareasonwhya relativelypoorcountrymaybe an attractive targetfor inward
investment?
Selectone:
a. currency depreciation
b. Rapideconomicgrowth
c. political instability
d. highcost of living
e. lessdevelopedinfrastructure
Question18
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Whichof the followingdescribesaturnkeyproject?
Selectone:
a. settingupwhollyownedsubsidiariesinforeignnations
b. exportingprocesstechnologytoothercountries
c. establishingfirmsthatare jointlyownedbytwoormore otherwise independentfirms
d. sellingproductsproducedinone countrytoresidentsof othercountries
e. grantingrightsto intangiblepropertytootherfirms
Question19
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If a value creationactivityof afirmcan take place inMexicomosteffectively,thenthatactivityof the
firmmustbe basedinMexico.Firmsthatpursue such a strategyare mostlikelytorealize:
Selectone:
a. locationeconomies
b. experience curve
c. demographicadvantages
d. a positioninside the efficiencyfrontier
e. economiesof scale
Question20
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In whichkindof exchange rate isthe value of the currencyfixedrelativetoa reference currency,and
thenthe exchange rate betweenthatcurrencyandothercurrenciesisdeterminedbythe reference
currencyexchange rate?
Selectone:
a. Floating
b. Flexible
c. Real
d. Pegged
e. Dirtyfloat
Question21
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Whichof the followingreferstoasystemunderwhicha country'scurrencyis nominallyallowedtofloat
freelyagainstothercurrencies,butinwhichthe governmentwill intervene,buyingandsellingcurrency,
if it believesthatthe currencyhasdeviated toofarfromits fairvalue?
Selectone:
a. peggedfloat
b. capital float
c. cleanfloat
d. dirtyfloat
12. e. Fixedfloat
Question22
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Whichof the followingisafunctionof the foreignexchange market?
Selectone:
a. To provide some insuranceagainstforeignexchangerisk
b. to provide short-termcashflowfromadverse changesinexchange rates
c. to eliminate volatile changesinexchange rates
d. to enable companiestoengage incapital flightwhencountertrade isnotpossible.
e. to reduce the economicexposure of afirm
Question23
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Whichof the followinginstancesindicatesthatthe dollarissellingata premiumonthe 30 day forward
market.
Selectone:
a. The currentspot exchange rate is$1 = ×120 and the 30-day forwardrate is $1 = ×120
b. The currentspotexchange rate is$1 = ×120 and the 30-day forwardrate is$1 = ×110 after30 days.
c. The spotexchange rate iscurrently$1 = ×120 andchangesto $1 = ×130 after30 days
13. d. The spotexchange rate iscurrently$1 = ×120 and changesto $1 = ×110 after 30 days
e. The current spotexchange rate is$1 = ×120 andthe 30-day forwardrate is $1 = ×130 after30 days.
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Question24
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What isa firmengaginginwhenitinsuresitself againstexchange risk?
Selectone:
a. currency swap
b. hedging
c. arbitrage
d. carry trade
e. currencyspeculation
Question25
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Whichof the followingisafactor that has contributedtogreaterretail concentrationindeveloped
countries?
Selectone:
a. an increase inthe numberof single-income households
b. a traditionof establishedlocal neighborhoodstores.
14. c. an increase inpopulationdensity
d. a retail systemthatencourageslongchannel length
e. an increase incar ownership
Question26
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A criticismof the International MonetaryFund(IMF) isthatithas become toopowerful foraninstitution
that lacksany real mechanismforaccountability.The IMFhas determinedmacroeconomicpoliciesin
those countries,yet accordingtocriticssuch as notedeconomistJeffreySachs,the IMF,withastaff of
lessthan1,000, lacksthe expertise requiredtodoa good job.Sachs'ssolutiontothisproblemisto
reformthe IMF so it makesgreateruse of outside expertsanditsoperationsare opentogreateroutside
scrutiny.
a)Howwouldyoureformthe IMF?
b) How wouldyouchange the IMF initsrole to promote economicreforminthe countriestowhichitis
providestranches?
c) Chile andSouthKoreaare listedasexampleswhere IMFprogramssucceeded.Whydoyouthinkthey
workedinthose cases?
d) Why do youthinkthat Brazil and Argentinahave notbeenable tohave economicstabilitydespite
repeatedIMFprograms?
A criticismof IMF isbecause itwas gainingpowerinaninstitutionthatlacksstrategiesof accountability.
It has determinedthe policiesof macroeconomicinthose countriesaccordingtocritics.Solutionstothis
problemwere toreformIMF fromoutside experts.Policiesdesignedtobringbackthe overheated
economiesmitigatingandcut downthe governmentexpenditure.
The rescue effortwasincreasingthe problemwhichcomesfromthe moral hazardwasanothercriticism.
The expertsshowthatJapanese andwesterncountriesbankswerenotina positiontolendalarge
amountof moneytooverleverage otherfirmsinAsianduringthe 1990s whichwere the boomyears.
15. To reformthe IMF isto developmissionswhichare new forexample fixedexchange ratessystem. Also,
by providinglongertermloansbasedonmacroeconomicpoliciesandthisaidinstructural economic
reforms.
Question27
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A U.S. companythat importslaptopcomputersfromJapanknowsthatin30 daysit mustpay inyento a
Japanese supplierwhenashipmentarrives.The companywillpaythe Japanese supplier×150,000 for
each computer,andthe currentdollar/yenspotexchange rate is$1 = ×110. The importercansell the
computersthe daytheyarrive for $1,600 each.However,the importerwillnothave the fundstopay the
Japanese supplieruntil the computershave beensold.The importerentersintoa30-day forward
exchange transactionwithaforeignexchange dealerat$1 = ×105. What is the profitor lossper
computerif the exchange rate after30 daysis $1 = ×90? Show yourwork.
Question28
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Describe aglobal standardizationstrategyandwhenyouwouldpursue suchastrategy.
Describe alocalizationstrategyandwhenyouwouldpursue sucha strategy.
Global strategythe worldmarketistreatedas one by the organizationandas one source of providing
local variation.The strategydevelopsalarge competitive advantage basedonthe global basis.
Localizationstrategyisastrategyin a businessthatfocusona specificregionastheyemployee the
differentiationinselectingthe areatobe focusedon.Thisisdone to cater differencesamongthe
operatingmarkets.
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