The preeminent strategic goal for most firms is to maximize the value of the firm for its owners and shareholders.

The customer is able to garner the benefit of the consumer surplus because one firm is competing with other firms for the customer's business, so the firm must charge a lower price than it could if it were a monopoly supplier.

According to Porter, the way to create superior value is to drive down the cost structure of the business and/or differentiate the product in some way so that consumers value it more.

For a firm, all positions on the efficiency frontier are viable.

Support activities are always less important than the primary activities in achieving a competitive advantage.

The success of many multinational corporations is based not just upon the goods or services that they sell in foreign nations, but also upon the core competencies that underlie the development, production, and marketing of those goods or services.

The skills within the firm that a competitor cannot easily match or imitate are known as the core knowledge base.

Systematic increases in sales that have been observed to occur over the life of the product are referred to as the experience curve.

One of the sources of economies of scale is the ability to spread fixed costs over a small volume.

Once a firm has established a low-cost position, it can act as a barrier to new competition.

In a multinational enterprise, skills are typically generated at the home location and are then dispersed to the rest of the organization.

To leverage subsidiary skills, companies should establish incentive systems that encourage local employees to acquire new skills.

Universal needs exist when the tastes and preferences of consumers in different nations are similar if not identical.

When consumer tastes and preferences differ significantly between countries, there is low pressure for local responsiveness.

Threats of protectionism, economic nationalism, and local content rules dictate that international businesses manufacture locally.

Pursuing a global standardization strategy is appropriate when a firm is facing low pressures for cost reduction but high pressure for local responsiveness.

As competition intensifies, global standardization strategies and transnational strategies tend to become less viable, and managers need to direct their companies toward either an international strategy or a localization strategy.

Research has shown that in the modern multinational enterprise, core competencies and skills typically reside in the home country.

Enterprises that pursue an international strategy tend to decentralize control over marketing and product strategies.

_______ is measured by the percentage increase in net profits over time.

The amount of value a firm creates is measured by the

The______ all of the different positions that a firm can adopt with regard to adding value to the product and low cost assuming that its internal operations are configured efficiently to support a particular position.

The strategy, operations, and organization of a firm must all be consistent with each other if the firm is to______ and achieve superior profitability.

______ include the design, creation, and delivery of a product.

Research and development, production, marketing and sales, and customer service are all examples of

Top management should be viewed as part of the firm's

_______can be defined as the rate of return that the firm makes on its invested capital, which is calculated by dividing the net profits of the firm by total invested capital.

The percentage increase in net profits over time measures

Which of the following statements is true?

The price a firm charges for a good or service is typically less than the value placed on that good or service by the customer. This is because

The value of a product to an average consumer is V; and the average price that the firm can charge a consumer for that product is P. Here, V - P can be termed as

A consumer surplus can be best described as

A strategy that focuses on increasing the attractiveness of a product is referred to as

The efficiency frontier has a convex shape because of

______ imply that when a firm already has significant value built into its product offering, increasing value by a relatively small amount requires significant additional costs.

The basic strategy paradigm suggests that to maximize its profitability, a firm should do which of the following?

_______ activities are basically concerned with creating the product, marketing and delivering the product to buyers, and providing support and after-sales service.

Which of the following is an example of a primary activity in a firm's value chain?

Which of the following is an example of a support activity in a firm's value chain?

_______ activities of the value chain provide inputs that allow the primary activities to occur.

Michael Porter argues that

The term_____ refers to skills within the firm that competitors cannot easily match or imitate and that may exist in the firm's value creation activities.

Location economies are the economies that arise from performing a______ optimal location for that activity.

The_______refers to systematic reductions in production costs that have been observed to occur over the life of a product.

Global expansion offers companies the opportunity to generate greater profits than companies that focus strictly on

_____ enable a firm to reduce the costs of value creation and/or to create perceived value in such a way that premium pricing is possible.

Economies that arise from performing a value creation activity in the optimal location are known as

Cost savings that come from learning by doing are known as

Learning effects tend to be

_______ allows a firm to reduce its cost of creating value and increase its profitability.

A firm benefits by basing each value creation activity it performs at that location where economic, political, and cultural conditions, including relative factor costs, are most conducive to the performance of that activity. Firms that pursue such a strategy can realize

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

When companies disperse different stages of the value chain to those locations around the world where perceived value is maximized or where the costs of value creation are minimized, companies create

Lenovo's ThinkPad laptop computers are designed in the United States; the case, keyboard, and hard drive are made in Thailand; the display screen and memory in South Korea; the built-in wireless card in Malaysia; and the microprocessor in the United States. In each case, these components are manufactured and sourced from the optimal location given current factor costs. In this example, Lenovo has

_____ refer(s) to systematic reductions in production costs that have been observed to occur over the life of a product.

It has been observed that a product's production costs decline by some quantity about each time cumulative output

When individuals gain knowledge of the most efficient ways to perform particular tasks, they are saving costs through

Learning effects

It has been suggested that learning effects are important only during the start-up period of a new process and that they cease after two or three years. Any decline in the experience curve after such a point is due to

Economies of scale arise from which of the following sources?

Which of the following is one of the two types of competitive pressure that affects the ability of multinational enterprises to compete in the global marketplace?

A multinational enterprise doing business in Nigeria decided to change the labeling on its product to conform to local customs and preferences. What type of competitive pressure did this company experience?

Which of the following is true of firms that compete in the global marketplace?

Universal needs exist when

Pressures for cost reduction are intense in industries where

A multinational firm may need to delegate marketing functions to national subsidiaries to

Firms usually respond to pressures for cost reduction by trying to

Responding to pressure for____ requires that a firm differentiate its products and marketing strategy from country to country, even though it may raise costs.

_______needs exist when the tastes and preferences of consumers in different nations are similar if not identical.

When AMD sells its computer chips in countries across the world, it doesn't need to worry too much about customizing the product to local needs and preferences because computer chips are_______needs.

Pressures for______ imply that it may not be possible for a firm to realize the full benefits from economies of scale, learning effects, and location economies.

When a firm focuses on increasing profitability by customizing the product or service so that it provides a good match to tastes and preferences in different national markets, the firm is following ______strategy.

When the firm simultaneously faces both strong cost pressures and strong pressures for local responsiveness, the ideal strategy to follow is the_____ strategy.

_______ strategy makes most sense when demands for local responsiveness are high, but cost pressures are moderate or low.

The distinguishing feature of many firms that pursue______ strategy is that they are selling a product that serves universal needs, but they do not face significant competitors.

According to researchers Bartlett and Ghoshal, for transnational enterprises to be successful, they must focus on

When a firm has a strategic goal of pursuing a low-cost strategy on a worldwide scale, the firm should follow_______ strategy.

Which of the following is associated with firms following the global standardization strategy?

______ strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences, and where cost pressures are not too intense.

What strategy focuses on increasing profitability by customizing the firm's goods or services so they provide a good match to tastes and preferences in different national markets?

What is a disadvantage of the localization strategy?

A firm that is facing both strong cost pressures and strong pressures for local responsiveness should follow______ strategy.

A firm that is pursuing______ strategy is simultaneously trying to achieve low costs through location economies, economies of scale, and learning effects; and trying to differentiate its product offering across geographic markets.

A firm facing low pressures for cost reductions and low pressures for local responsiveness is most likely to follow______ strategy.

For firms selling a product that serves universal needs but not facing significant competition,_________ strategy makes sense.

Which of the following is true of the international strategy?

_______ strategy customizes the product offering to local demands and increases the value of that product in the local market.