International Business Strategy
Exam Solutions
Course Introduction
International Business Strategy explores the frameworks, principles, and analytical tools essential for formulating and implementing strategies in the global business environment. The course examines how firms compete across borders, considering factors such as international market entry, cross-cultural management, global value chains, and the impact of political and economic forces on multinational operations. Students will analyze real-world case studies to understand strategic decision-making related to international expansion, alliances, adaptation to local markets, and risk mitigation. Emphasis is placed on developing a critical understanding of how globalization influences business strategy and the ethical, legal, and sustainability challenges faced by international organizations.
Recommended Textbook
Strategic Management Concepts BRV 1st Edition by Jeffrey H. Dyer
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14 Chapters
700 Verified Questions
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Page 2
Chapter 1: What Is Business Strategy?
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Sample Questions
Q1) The Mykari Publishing House invested in buying high-end machinery that allowed its newspapers to be printed at twice the speed of average printing machines.The executives of the company stated that this would increase the company's profit margin by 12% as opposed to the usual 7 to 8% that it makes annually.When the finances of the company were tallied this year, it was found that the profits increased to about 19%.This scenario best illustrates _____.
A) return of equity
B) above-average profits
C) complimentary value
D) unique value
Answer: B
Q2) _____ can be best defined as the reason a firm wins with customers or the value proposition it offers to customers, such as a low cost advantage or differentiation advantage.
A) Switching costs
B) Unique value
C) Complementary products
D) SWOT analysis
Answer: B
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3
Chapter 2: Analysis of the External Environment: Opportunities and Threats
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Q1) WillowWorks LLC, a retail clothing store, has been sourcing its raw materials from a supplier named ThreadTym Corp.for the last five years.A change of management at ThreadTym resulted in an increase of the prices of the raw materials.As a result, WillowWorks purchases ThreadTym so that it can produce these products on its own.This scenario best illustrates _____.
A) network effect
B) forward integration
C) backward integration
D) switching cost
Answer: C
Q2) Smart Waves Inc., a company that sells computers, provides an external hard disk along with its high-end professional laptops.Customers can store extra data in these hard disks without having to purchase them.The offer that Smart Waves provides is an example of _____.
A) complementary products
B) network effects
C) buyer power
D) substitutes
Answer: A
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Chapter 3: Internal Analysis: Strengths, Weaknesses, and Competitive Advantage
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Sample Questions
Q1) LittleHut Inc., an international food company, has a number of resources to its credit.Over the years, the company has acquired factories, machinery, in-depth knowledge, and a stable reputation.The elements mentioned in this scenario can be best categorized as LittleHut Inc.'s _____.
A) equipment
B) personnel
C) assets
D) capabilities
Answer: C
Q2) Procedures, processes, and routines that continuously expand existing resources or improve operating capabilities most accurately define the term _____.
A) network externalities
B) competitive parities
C) dynamic capabilities
D) operating capabilities
Answer: C
Q3) What is an intangible resource?
Answer: It is an economically valuable asset that does not have a physical presence.
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Chapter 4: Cost Advantage
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Questions
Q1) Connections Communications Inc.has been able to achieve optimal efficiency by identifying a task for each employee and enabling them to become thoroughly proficient in their tasks.The company has realized that employees develop an expertise in their specified job profile over time and they gradually begin to work faster than when they started the job.This is an example of _____.
A) task specialization
B) employee specialization
C) minimum efficient scale
D) competitive parity
Q2) A strategy in which the unique value offered to customers is lower-priced products or services is known as _____.
Q3) Explain proprietary knowledge and its important sources.
Q4) Information that is not public and that is viewed as the property of the holder is called _____.
Q5) Define the cost advantage strategy and its characteristics.
Q6) Mention the four ways that companies achieve cost advantage through lower-cost inputs and explain bargaining power over suppliers.
Q7) Which is an important source of proprietary knowledge?
Page 6
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Chapter 5: Differentiation Advantage
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Q1) Purple Inc., an interior design company, offers its clients unique design solutions.Clients can choose from Purple's in-house products, customize them to meet their needs, and see how their home would appear using a 3D visualization software in a mini-theatre at Purple's office.This gives Purple a competitive advantage over its rivals since none of them offer this unique combination of services.Purple's advantage is due to its _____.
A) service standardization strategy
B) mass customization strategy
C) product differentiation strategy
D) supply-driven strategy
Q2) Kim, a consumer, is in the final stage of selecting a product.Which of the following is is true if her actions follow the typical consumption chain?
A) Kim is unlikely to have become aware of her need for a product yet.
B) Kim is likely to be persuaded by the product attributes at this stage.
C) Service providers are likely to assist Kim in helping her use the product.
D) Service providers are likely to detect faults with the performance of the product.
Q3) What are the three ways in which product features can be offered for the purpose of differentiation?
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Chapter 6: Corporate Strategy
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Q1) Which of the following statements is true of a corporate strategy?
A) It refers to a management strategy that focuses solely on the professional behavior and attitudes of a company's employees.
B) It entails competing in a core industry or business and also operating in adjacent businesses or markets.
C) It entails competing exclusively with large and well-established firms to increase competitive advantage.
D) It refers to the overall strategy that helps a company recruit the right type of employees for the right type of job.
Q2) Which of the following statements is true of a dominant vertical business?
A) It earns less than 70 percent of its revenue from its main line of business.
B) It earns more than 95 percent of revenue from its main line of business.
C) It earns 30 percent of its revenue from business lines across different value chains.
D) It earns 30 percent of its revenue from businesses located along the value chain.
Q3) What are the mechanisms that help companies in exploiting and/or expanding their resources and capabilities?
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Chapter 7: Vertical Integration and Outsourcing
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Q1) Activities closer to the beginning of the industry value chain are referred to as
A) middle activities
B) forward activities
C) upstream activities
D) downstream activities
Q2) Having more flexibility, or being less vertically integrated, is more valuable when:
A) a firm can create its own raw materials.
B) technology used is outdated.
C) the cost to perform an activity remains the same.
D) new technologies are innovated.
Q3) Which of the following is a primary characteristic of a transaction-specific asset?
A) It has the ability to generate value only when used for several purposes together.
B) It is an intangible asset whose value is very hard to evaluate.
C) It is an asset that can be transported or transferred with ease.
D) It can generate maximum value only when used for a particular purpose.
Q4) Briefly state the difference between outsourcing and insourcing.
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Chapter 8: Strategic Alliances
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Q1) Which of the following statements is true about firms that establish strategic alliances?
A) Firms that collaborate at the sales stage are not considered strategic partners.
B) Firms that produce different products cannot enter a strategic alliance.
C) Firms can collaborate to improve their performance at any stage along the value chain.
D) Firms often enter strategic alliances at the cost of losing their relational advantage.
Q2) Which of the following statements is true about strategic alliances?
A) Strategic alliances exclude functions that are bought through bidding.
B) In strategic alliances, the power to make decisions is always evenly distributed amidst the firms.
C) In strategic alliances, companies may choose to cooperate at any stage along the value chain.
D) Strategic alliances usually lead to one of the firms losing their relational advantage.
Q3) What are the different types of nonequity alliances?
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Chapter 9: International Strategy
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Q1) Vactin Motors, an automobile company, is a well-recognized brand.It does not have the capital and capabilities to set up manufacturing units abroad, although it is keen to have its products made in the foreign market.It decides to have the products produced and sold under its brand name.In this case, which of the following modes of international market entry should be adopted by Vactin?
A) Exporting
B) Franchising
C) Joint venture
D) Wholly owned subsidiaries
Q2) A healthcare company deals with significant management challenges.The production units are based in various geographic locations, which results in cultural and linguistic barriers.Operations require relying on a local firm to adapt the products to meet the needs of the local market.In this case, the company is likely to be engaging in
A) Exporting
B) Importing
C) Offshoring
D) Alliances
Q3) Explain the four different modes of international market entry.
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Page 11
Chapter 10: Innovative Strategies That Change the Nature of Competition
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Q1) A cell phone manufacturing company gives away a free case with a purchase of any product higher than $50.Which of the following is being exemplified in this case?
A) A blue ocean strategy
B) A cross-sell strategy
C) A third-party pay strategy
D) A bundling strategy
Q2) A telecommunications service provider, Chrome Inc., creates a new application for its users.The application allows users to make free calls through the Internet.While this increased the number of paid subscribers of Chrome, its competitors who levied a fee for their telecommunication services lost their customers.This is an example of a _____.
A) supporting innovation
B) complementary innovation
C) disruptive innovation
D) decremented innovation
Q3) Groups of people who share similar needs and thus are likely to desire the same features in a product are called _____.
Q4) What is a business model? Briefly explain the revenue model.
Q5) Creating new demand in an uncontested market space is called the _____.
Page 12
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Chapter 11: Competitive Strategy
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Q1) Gia Inc., a healthcare company, aims to create a competitor response profile.It has identified its objectives and assumptions.The next step is to _____.
A) identify the competitors' resources and capabilities
B) study the price range of its own products lines
C) create a structural chart
D) focus on productivity
Q2) Briefly describe the Nash equilibrium.
Q3) The word "theory" in game theory refers to _____.
A) the strategic interaction among competitors
B) a set of predictions
C) a competitor's objectives
D) the resources and capabilities of a competitor
Q4) An airline service provider watches its rivals closely.It studies the potential for reliable, timely, and service-oriented international travel offered by its competitors.In this case, the firm is focusing on the competitors' _____.
A) resources and capabilities
B) objectives
C) organizational structure
D) market risks
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Chapter 12: Implementing Strategy
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Q1) Walter Gary Corp., a multinational consumer electronics firm, set up several branches around the globe to cater to the needs of its global customers and expand its reach.As part of this initiative, it appointed vice presidents of marketing and vice presidents of finance and accounting for every geographical region.In the context of the 7 S model of organizational alignment, this is an example of _____.
A) strategy
B) structure
C) style
D) skill
Q2) Porben Inc., a specialist educational firm, targets public universities, job fairs, and job portals during its recruitment process.It provides on-the-job training to the new employees of the company.In the context of the 7 S model of organizational alignment, which of the following is exemplified in this case?
A) Structure
B) Strategy
C) Style
D) Staffing
Q3) Explain the hard triangle and soft square in the 7 S model.
Q4) What are the eight steps to successful change?
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Chapter 13: Corporate Governance and Ethics
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Q1) Explain the difference between the shareholder primacy model and the stakeholder model.
Q2) Pick N Shop Inc.operates a chain of supermarkets.The company offers a bonus of $500 to its sales representatives if they can sell products worth $5,000 per month.It also offers bonuses and other benefits to its employees and managers.By offering such bonuses, Pick N Shop Inc.is primarily trying to avoid a(n) _____.
A) hostile takeover
B) proxy fight
C) agency problem
D) accountability problem
Q3) Who is a stakeholder of a business organization?
Q4) Describe how style can help a company create a climate where ethical behavior becomes the expected norm.
Q5) _____ is a model of the corporation suggesting that a firm is the sum total of its contracts with different stakeholders.
A) Nexus of contracts
B) Shareholder primacy
C) Stakeholder model
D) Supplier contracts
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Chapter 14: Strategy and Society
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Q1) Jason, a visually impaired employee of Melony Inc., believes that his workplace has given him independence and self-confidence, thereby increasing his morale.Which of the following has been exemplified by Melony in this scenario?
A) Legal responsibility
B) Social value
C) Superordinate goal
D) Capacity building
Q2) The ability of an organization to consistently gather resources from, or provide services to, key stakeholders such as donors, volunteers, students, or clients is referred to as _____.
Q3) Peter, the founder of MilkWorld Inc., started his dairy company with the intent of creating a formidable supply-chain link and providing a lucrative source of income for the local dairy farmers in his country.Peter is most likely to be considered a(n):
A) venture capitalist.
B) investment manager.
C) social entrepreneur.
D) angel investor.
Q4) Discuss the role of a social entrepreneur in the creation of shared value.
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