strategy in International Business

The goal of most firms is to choose a strategy that

• maximizes the value of the firm for its shareholders

• that minimizes costs

• that emphasizes high sales

• that controls both costs and expenses

__________ is a ratio or rate of return concept.

• A. Profitability

• B. Performance

• C. Cash flow

• D. Efficiency

. Two basic conditions determine a firm's profits:

• A) the firm's costs of production and the state of the economy

• B) the amount of value customers place on the firm's good and services and the firm's costs of production

• C) the quality of a firm's products and the industry the firm participates in

• D) the industry the firm participates in and the state of the economy

The percentage increase in net profits over time is

• A) capital return

• B) profitability

• C) net profits

• D) profit growth

A strategy that focuses on lowering production costs is referred to as a:

• A. differentiation strategy.

• B. cost minimization strategy.

• C. low cost strategy.

• D. efficiency strategy.

A consumer surplus can be thought of as _____________.

• A. what the consumer has “left-over” after a purchase

• B. how much extra a consumer has to pay for a product

• C. value for the money

• D. the higher price the consumer must pay for getting a quality product

In the context of value chain analysis, the primary activities of a firm include:

• A) R&D, human resources, materials management, and production

• B) service, human resources, production, and materials management

• C) company infrastructure, information systems, human resources, and materials management

• D) R&D, production, marketing & sales, and service

Global expansion allows firms to achieve all of the following except _______________________.

• A) minimize returns by failing to capture skills developed in foreign countries

• B) realize location economies by dispersing value creation activities on the optimal location

• C) realize cost economies from experience effects generated by serving a larger market from a central location

• D) expand the market for their domestic product offerings by selling those products in international markets

Companies that are successful at global expansion are successful at transferring their

• A. competitive advantage

• B. comparative advantage

• C. core competencies

• D. core advantage

Economies that arise from performing a value creation activity in the optimal location for that activity are referred to as _________________.

• A) factor economies

• B) production economies

• C) location economies

• D) value creation economies