International Business Strategy
Exam Practice Tests
Course Introduction
International Business Strategy explores the frameworks and decision-making processes that companies use to compete and operate successfully in the global marketplace. The course addresses topics such as analyzing international markets, entry strategies, managing cross-cultural risks, modes of internationalization, global value chain management, and the adaptation of business models to diverse regulatory, economic, and cultural environments. Students will develop the skills needed to formulate and implement strategies for multinational corporations, considering both opportunities and challenges presented by globalization, international competition, and rapidly changing global dynamics.
Recommended Textbook
Strategic Management 2nd Edition by
Frank T. Rothaermel
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12 Chapters
1522 Verified Questions
1522 Flashcards
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Page 2
Chapter 1: What Is Strategy
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) Which of the following statements accurately describes firm effects?
A) They attribute firm performance to the industry in which the firm competes.
B) They attribute firm performance to the actions managers take within a chosen industry.
C) They refer to the value-creation potential of a large, diversified enterprise.
D) They refer to the external circumstances surrounding all the firms in an industry.
Answer: B
Q2) A firm is said to gain a competitive advantage when it can:
A) exceed its own previous performances.
B) provide products similar to its competitors, but at lower prices.
C) perform at the same level as that of its competitors.
D) minimize the difference between value creation and cost.
Answer: B
Q3) What is the AFI strategy framework?
Answer: The AFI strategy framework is s model that links three interdependent strategic management tasks-analyze, formulate, and implement-that, together, help managers plan and implement a strategy that can improve performance and result in competitive advantage.
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3
Chapter 2: Strategic Leadership: Managing the Strategy Process
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Discuss the role top management teams play in a planned emergence model of strategic management.
Answer: Although emergent strategies can arise from anywhere in a firm, it is important to emphasize the role that top management teams play in this type of strategy process.In the strategy-as-planned-emergence approach, executives need to decide which of the bottom-up initiatives to pursue and which to shut down.This critical decision is made on the basis of whether the strategic initiative fits with the company's vision and mission, and whether it provides an opportunity worth exploiting.
Q2) Strategies developed at the departmental level, such as the accounting human resource, production, and marketing departments, within a strategic business unit are referred to as _____.
A) grand strategies
B) corporate strategies
C) business strategies
D) functional strategies
Answer: D
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Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) Keeping in mind the five forces in the airline industry, which of the following best explains the situation in the industry?
A) Substitutes are readily available in the form of trains and buses, thus reducing the profit potential in the industry.
B) Suppliers have weak bargaining power because they offer products that are not differentiated.
C) Entry barriers in the industry are high resulting in hardly any new airlines popping up.
D) Consumers in the industry make decisions based on price, thus reducing the intensity of rivalry in the industry.
Answer: A
Q2) True West Airlines Inc.follows a cost-leadership strategy.Which of the following firms will most likely be its direct competitor?
A) Pioneer Airlines Inc., which follows a cost-increase strategy
B) West Railways, which follows a differentiation strategy
C) Jet King Airlines Inc., which follows a low-cost strategy
D) Blue Cabs Inc., which follows a cost-leadership strategy
Answer: C
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Page 5
Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies
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127 Verified Questions
127 Flashcards
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Sample Questions
Q1) If a resource is rare or unique to a particular firm, then:
A) the industry in which the firm operates will experience perfect competition.
B) the mobility of the resource will be high.
C) the firm will be able to maintain a competitive advantage for a long period.
D) it will be less costly for rivals to imitate the resource.
Q2) The perfectly competitive industry structure differs from the resource-based model in its view that:
A) all firms have access to the same resources.
B) accessibility to bundles of resources differ across firms.
C) resources tend to be "sticky."
D) competencies differ across firms working in the same industry.
Q3) Due to path dependence:
A) strategic decisions have long-term consequences.
B) the occurrence of time compression diseconomies becomes rare.
C) competitors can easily imitate or create core competencies quickly.
D) past decisions of a firm do not affect its current situation.
Q4) List the four isolating mechanisms that act as barriers to imitation.
Q5) How can a firm fully exploit the competitive potential of its resources, capabilities, and competencies?
Q6) Elaborate on social complexity as a barrier to imitation. Page 6
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Page 7
Chapter 5: Competitive Advantage, Firm Performance, and Business Models
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) What does the ratio Selling, general, & administrative (SG&A)/Revenue indicate?
Q2) _____ indicates how much a firm benefits from interest-free loans extended by its suppliers and creditors.
A) Payables turnover
B) Receivables turnover
C) Assets turnover
D) Inventory turnover
Q3) Which of the following is NOT an accurate expression of the economic value created per unit of a product sold?
A) The sum of consumer surplus and producer surplus
B) The difference between consumer's reservation price and firm's cost
C) The sum of consumer surplus and firm profit
D) The difference between the price charged and the firm's cost
Q4) The cost of capital to create a product is a fixed cost because it is:
A) directly proportional to the output level.
B) uniform throughout all firms and industries.
C) not a part of the profit calculations.
D) unaffected by consumer demand.
Page 8
Q5) Should a firm ideally have a higher or a lower ratio of payables turnover?
Q6) Describe the subscription-based business model.
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Page 9
Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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125 Verified Questions
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Sample Questions
Q1) Both Viten Electronics Inc.and JL Electronics Inc.incur a cost of $400 to manufacture an LED television.However, the economic value created by JL Electronics is more than that created by Viten Electronics.What does this indicate?
A) Viten Electronics has a competitive advantage over JL Electronics.
B) Both Viten Electronics and JL Electronics have achieved competitive parity.
C) JL Electronics can charge a premium price on its televisions.
D) Viten Electronics has created a higher value gap than JL Electronics.
Q2) _____ is best described as the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale.
A) Minimum efficient scale
B) Break-even output
C) Maximum output capacity
D) Optimum sustainable yield
Q3) How does process innovation benefit a firm?
Q4) What is meant by differentiation parity and cost parity?
Q5) Why are differentiation and cost-leadership strategies called generic strategies?
Page 10
Q6) What are the two different generic business strategies available to firms?
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Chapter 7: Business Strategy: Innovation, Entrepreneurship, and Platforms
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) The customers entering the market in the growth stage are primarily _____.
A) technology enthusiasts
B) laggards
C) early adopters
D) late majority
Q2) In the context of the long tail phenomenon, what does the short head represent?
A) It represents products that appeal to the largest segment of the market with homogenous tastes.
B) It represents products that are manufactured from minimal input resources.
C) It represents products that contribute only 20 percent to a firm's total revenue.
D) It represents products that online retailers offer in order to increase their product portfolio and not their revenues.
Q3) What do you mean by an innovation ecosystem?
Q4) Briefly discuss the steps in the innovation process.
Q5) What are the additional characteristics that a new product or technology must have to be a disruptive force?
Q6) Who are technology enthusiasts?
Q7) How do patents protect new technology?
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Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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Sample Questions
Q1) White Leo Motors (WLM)Inc.generates a major portion of its revenues by manufacturing luxury sports cars.However, the company also derives an insignificant percent of its annual revenues by selling its sports merchandise that includes apparel, shoes, and other accessories under the same brand name.Which of the following terms best describes WLM?
A) A conglomerate
B) A subsidiary
C) A dominant-business firm
D) A single-business firm
Q2) PepsiCo operates in many countries and sells a wide variety of aerated drinks, other beverages, different types of chips, and Quaker Oats goods to achieve continuous growth.From this data, we can conclude that PepsiCo has been involved in _____.
A) strategic outsourcing
B) lean manufacturing
C) product-market diversification
D) process diversification
Q3) When should a firm decide to vertically integrate? Explain using Google as an example.
Q4) Elaborate on the parent-subsidiary relationship.
Page 12
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Chapter 9: Corporate Strategy: Strategic Alliances, Mergers and Acquisitions
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126 Verified Questions
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Sample Questions
Q1) How did the recent horizontal integration in the U.S.airline industry provide benefits to the surviving carriers?
A) By facilitating excess capacity in the industry
B) By preventing mergers from taking place
C) By lowering competitive intensity in the industry overall
D) By increasing the threat of entry in the industry
Q2) Fervana Autos Inc., a large automobile company, made an initial small investment in a startup company that was developing a solar-powered car.This gave Fervana Autos controlling interests in the startup company.However, Fervana Autos had no obligations to make continued investments in the experiments of the startup company.It could invest in small amounts depending on the new product's success at each stage of its development.If the product proved to be successful, Fervana Autos would have the right to buyout the startup company.This approach to strategic alliance is referred to as
A) a break-even analysis
B) a real-options perspective
C) credible commitment
D) transaction cost economics
Q3) How does horizontal integration decrease competitive intensity within an industry?
Page 13
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Chapter 10: Global Strategy: Competing Around the World
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125 Flashcards
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Sample Questions
Q1) Which of the following factors pertaining to national competitive advantage enabled Nokia, a multinational company from Finland, to become an early leader in cell phones?
A) The competitive intensity in the cell phone industry of Finland
B) The huge demand for high-quality wireless services in Finland
C) The abundance of natural resources in Finland
D) The related and supporting industries present in Finland
Q2) When two neighboring, democratic countries that are part of a trading bloc follow different religions and social norms, they most likely have high _____.
A) political distance
B) geographic distance
C) administrative distance
D) cultural distance
Q3) When should a multinational company pursue an international strategy?
Q4) For which of the following products is an international strategy most suitable?
A) For luxury goods that can be shipped across the globe
B) For products with low value-to-weight ratios such as steel
C) For food products that are specific to certain cultures
D) For products with high linguistic content
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Page 14
Chapter 11: Organizational Design: Structure, Culture, and Control
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128 Flashcards
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Sample Questions
Q1) Which of the following statements about W.L.Gore & Associates best supports the fact that it is organized in an informal and decentralized manner?
A) W.L. Gore & Associates' employees are organized by their seniors into teams that are led by sponsors, not bosses.
B) W.L. Gore & Associates prefers e-mail communication to face-to-face communication.
C) W.L. Gore & Associates is characterized by a vertical organizational form.
D) W.L. Gore & Associates refers to its employees as associates rather than employees.
Q2) Which of the following is a disadvantage of a functional strategy?
A) It frequently lacks the tools required to pursue a cost-leadership strategy.
B) It does not facilitate rich communication between members of the same department.
C) It cannot effectively address a higher level of diversification.
D) It does not allow organizations to be flexible or innovative.
Q3) Define span of control.How is it influenced by an organization's hierarchical structure?
Q4) Define input controls as a strategic control-and-reward system.
Q5) What are the drawbacks of adopting a functional strategy?
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Chapter 12: Corporate Governance and Business Ethics
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Sample Questions
Q1) Describe moral hazard in the context of the principal-agent relationship.Use an example.
Q2) The conflict in a principal-agent relationship arises when:
A) the company has more outside directors than inside directors.
B) the strategy adopted by the company's agents tries to emulate the mission statement created by the principals.
C) stockholders and agents are involved in the day-to-day operations of the company.
D) the goals of the principals and agents are not aligned with each other.
Q3) Creating economic value for shareholders while also creating social value is known as creating _____.
A) a social market economy
B) shareholder capitalism
C) shared value
D) stakeholder strategy
Q4) How does the access to insider information in a public stock company exemplify information asymmetry?
Q5) Why is board independence critical to effectively fulfilling a board's governance responsibilities?
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