International Business Strategy
Exam Materials
Course Introduction
International Business Strategy explores the formulation and implementation of effective strategies for firms operating in global markets. The course examines the complexities and opportunities of conducting business across borders, including analysis of diverse competitive environments, cultural differences, international market entry modes, and the impact of political, legal, and economic forces on multinational operations. Emphasis is placed on strategic decision-making, global organizational structures, and the management of international alliances, with real-world case studies illustrating how firms gain and sustain competitive advantage globally.
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 scenarios best illustrates a good stakeholder strategy?
A) VP Inc. follows a strategy in which maximization of the shareholders wealth is the primary concern of the managers.
B) Carrvero Inc. ensures that its employees are paid the least in the industry so that its external stakeholders can get the best price.
C) PA Corp. distributes only 70 percent of its annual profit after tax to shareholders, while the remaining is distributed among employees and the local community, and invested for further research.
D) Gen Pharma Corp. ensures that it fully exploits free natural resources, so that most of its profits go to shareholders in the form of dividends.
Answer: C
Q2) Industry effects describe the underlying _____ structure of the industry.
A) demographic
B) economic
C) psychographic
D) ethnographic Answer: B
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Page 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) What are the three areas of strategy formulation?
Answer: It is helpful to break down strategy formulation into three distinct areas: corporate, business, and functional:
Corporate strategy concerns questions relating to where to compete (industry, markets, and geography).
Business strategy concerns the question of how to compete (cost leadership, differentiation, or integration).
Functional strategy concerns the question of how to implement business strategy.
Q2) Visionary companies are able to outperform their competitors because:
A) their vision statements are more product-oriented.
B) they provide more aspirational visions.
C) their visions are exclusively financial.
D) they isolate internal stakeholders in defining their visions.
Answer: B
Q3) What does strategic formulation in strategic management process concern?
Answer: Strategy formulation concerns the choice of strategy in terms of where and how to compete.It is helpful to break down strategy formulation into three distinct areas: corporate, business, and functional.
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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) In regard to any of the five forces that shape competition, it is important to note that their relative strengths are context-dependent.Elaborate on this statement with the help of a real world example.
Answer: Student answers will vary.In regard to any of the five forces that shape competition, it is important to note that their relative strengths are context-dependent.For example, the Mexican multinational CEMEX, one of the world's leading cement producers, faces very different buyer power in the U.S.versus in its domestic market.Cement is an undifferentiated commodity product. In the U.S., cement buyers consist of a few large and powerful construction companies that account for a significant percentage of CEMEX's output.This results in razor-thin margins in the U.S.In contrast, the vast majority of CEMEX's customers in its Mexican home market are numerous, small, individual customers facing a few large suppliers, with CEMEX being the biggest.Not surprisingly, CEMEX earns high profit margins in its home market.This example provides the context to show that CEMEX actually competes in two different industry conditions (albeit offering the same product), because it faces two very different competitive forces in the U.S.versus Mexico.
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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) Which of the following statements accurately describes a firm's resource flow?
A) It is the firm's level of investments to maintain or build a resource.
B) It is the firm's current level of intangible resources.
C) It is the firm's current level of tangible resources that are common to other firms.
D) It is the firm's level of expertise to efficiently deploy a valuable resource.
Q3) A firm's resources and capabilities are costly to imitate.This is because rival companies do not clearly understand the relationship between the resources and capabilities controlled by the firm.In this case, the firm's competitive advantage is protected against imitation by _____.
A) path dependence
B) dependence complexity
C) causal ambiguity
D) social complexity
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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) A watch-making company has priced one of its wrist watches at $210.Most of its competitors sell similar watches at $180.Selling anything less than $150 would result in a loss for the company.However, the absolute maximum a customer is willing to pay for it is $170.In this scenario, what is the reservation price of the wrist watch?
A) $150
B) $180
C) $170
D) $210
Q2) How does a sustainable strategy typically help a firm?
A) It helps the firm focus solely on its financial goals.
B) It reduces the need for corporate social responsibility within the firm.
C) It facilitates the firm in effectively isolating its external stakeholders.
D) It helps the firm achieve positive results along the social and ecological dimensions.
Q3) Describe the subscription-based business model.
Q4) What can be inferred from a firm's Research & development (R&D)/Revenue ratio?
Q5) What does the ratio Selling, general, & administrative (SG&A)/Revenue indicate?
Q6) What do you mean by triple-bottom line?
Q7) What are the advantages of the balanced scorecard?
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Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) _____ is best described as decreases in cost per unit as output increases.
A) Economies of scale
B) Economies of scope
C) Time compression economies
D) Economies of replication
Q2) To be cost-competitive, a firm should:
A) position itself below the productivity frontier.
B) operate at the minimum efficient scale.
C) attain the highest cost position.
D) avoid moving on to a steeper experience curve.
Q3) Which of the following sources of differential appeal is least effective in helping a firm sustain its advantage?
A) Reputation for innovation
B) Reputation for quality
C) Superior customer experience
D) Observable product features
Q4) Why do diseconomies of scale occur?
Q5) How are the benefits different for cost leadership and differentiation strategies when analyzing the power of suppliers in an industry?
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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) SyncTouch Inc.is a manufacturer of cell phones.It has released an improvised version of its smartphone in markets in which the company already operates.Which of the following types of innovations does this scenario best illustrate?
A) Radical innovation
B) Incremental innovation
C) Architectural innovation
D) Disruptive innovation
Q2) When a firm pursues a maintain strategy, it:
A) exits a declining industry to maintain the goodwill of its overall brand name.
B) reduces investments in product support and allocates only a minimum of human and other resources.
C) continues to support marketing efforts even if the demand for the product is declining.
D) chooses to consolidate the industry by buying rival firms, those who plan to exit.
Q3) What happens during the shakeout stage of the industry life cycle?
Q4) What are the competitive benefits that first movers in an industry experience?
Q5) What are the economic incentives associated with incumbent firms?
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Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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126 Verified Questions
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Sample Questions
Q1) WJ Group Inc., a large multinational conglomerate, had begun to experience declining revenues over the years.The top management at the headquarters of the company decided that it was important for the company to avoid deviating from its core competencies.Thus, a few of the company's key businesses like energy, telecommunications, and automobiles were centralized, giving the top management more control over them.Also, relatively newer businesses like beverages and food processing were divested.In this scenario, WJ Group is involved in:
A) reverse engineering.
B) benchmarking.
C) restructuring.
D) crowdsourcing.
Q2) How can a firm pursuing a diversification strategy enhance its overall corporate performance by leveraging financial economies?
A) By using internal capital markets as a source of value creation
B) By adding more unrelated businesses into its corporate portfolio
C) By increasing its coordination and influence costs
D) By investing in businesses under the question mark quadrant of the BCG matrix
Q3) Explain the two types of related diversification strategy with the help of examples.
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Chapter 9: Corporate Strategy: Strategic Alliances, Mergers and Acquisitions
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) A drawback involved in using cross-border strategic alliances to enter new foreign markets is that:
A) the foreign firm will need to make larger investments when compared to entering the new market on its own.
B) some of the firm's proprietary know-how may be appropriated by the foreign partner.
C) all potential business risks in the new market will have to be faced alone by the foreign firm.
D) the shareholder value of the foreign partner will decline drastically.
Q2) Which of the following types of strategic alliances is the least common in terms of frequency?
A) Mergers
B) Acquisitions
C) Equity alliances
D) Joint ventures
Q3) Why do firms make acquisitions?
Q4) Discuss the pros and cons of a non-equity alliance.
Q5) Define horizontal integration.
Q6) What is the build-borrow-or-buy framework?
Page 11
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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) China is infamous for its rampant business in illegal materials.Explain.
Q2) Which of the following statements accurately explains the primary reason behind Walmart's failure in Germany?
A) Inability to implement its trademark focused-differentiation strategy in the German market
B) Significant differences between its U.S. personnel policies and Germany's culture
C) Germany's unfamiliarity with retail discount powerhouses
D) Metro's hostile takeover of Walmart in Germany
Q3) The administrative and political distance between two trading countries reduces when:
A) there are FDI restrictions in the host country.
B) there is no independent central bank in the host country.
C) there are tariffs and trade quotas in the host country.
D) there is a well-functioning capital market in the host country.
Q4) What is meant by local responsiveness?
Q5) What are the factors that capture administrative and political distance in the CAGE framework?
Q6) Briefly discuss the application of the CAGE distance framework.
Q7) Provide an example of a company following a multidomestic strategy.
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Chapter 11: Organizational Design: Structure, Culture, and Control
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128 Flashcards
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Sample Questions
Q1) The most important yet least visible element of organizational culture is _____.
A) values
B) norms
C) laws
D) artifacts
Q2) While working a night job at a call center, Neville creates an app called FastServe, which can be used to place orders at restaurants, rate the restaurants, and make reservations.Because he receives good responses for his app, he quits his current job to focus his efforts on FastServe.He creates a startup called TYOP and hires three people to help him improve FastServe and maintain the servers that run it.In this scenario, TYOP most likely has a _____ structure.
A) simple
B) matrix
C) mechanistic
D) functional
Q3) What are the characteristics of mechanistic organizations? Explain with the help of an example.
Q4) How does an unrelated-diversification strategy differ from a related-diversification strategy?
Page 13
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Chapter 12: Corporate Governance and Business Ethics
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126 Flashcards
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Sample Questions
Q1) Ethics is:
A) not synonymous with law.
B) impossible to codify into law.
C) always universal and cannot differ between cultures.
D) the minimum acceptable standard in business practice.
Q2) Describe the role of outside directors as part of a company's board of directors.
Q3) What was Goldman Sachs' rebuttal to SEC's claim that it defrauded investors?
A) It is up to the clients to assess the risks involved in any investments.
B) Fabrice Tourre was responsible for putting the deal together, and it was the lapse of an individual, not the entire firm.
C) John Paulson did not reveal his intentions behind creating Abacus.
D) Goldman Sachs' itself lost $100 million in the deal.
Q4) What best describes transferability of investor ownership in a public stock company?
A) Investors can give out company stocks as a gift.
B) Investors are allowed to trade shares of stocks.
C) Investors are allowed to participate in strategy formulation.
D) Investors can be hired as employees.
Q5) Describe the role of inside directors as part of a company's board of directors.
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