International Business Strategy
Study Guide Questions
Course Introduction
International Business Strategy explores the frameworks, tools, and decision-making processes used by organizations to compete and thrive in the global marketplace. The course examines how firms analyze international environments, assess competitive advantages, and develop strategies for market entry, growth, and risk management. Key topics include cross-cultural management, global value chains, partnerships, and adapting to diverse regulatory and economic contexts. Through case studies and real-world examples, students learn to craft effective strategies that address the complexities of operating across borders, while understanding the impact of globalization on business operations and long-term strategic planning.
Recommended Textbook
Strategic Management 4th Edition by Frank
Rothaermel
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12 Chapters
1217 Verified Questions
1217 Flashcards
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Chapter 1: What Is Strategy
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Sample Questions
Q1) Which of the following is an example of a business acting upon an organizational core value?
A) Pegasus Autos reduces engine emissions below federal guidelines to reduce pollution.
B) Pegasus Autos lowers its retail prices to gain an advantage over its closest competitor.
C) Pegasus Autos finances research for developing more powerful engines.
D) Pegasus Autos launches an ad campaign that promotes the company as being environmentally friendly.
Answer: A
Q2) Organizational values help individuals make choices that are
A) legal but unethical.
B) both illegal and effective.
C) both ethical and effective in advancing a company's goals.
D) ethical but ineffective in achieving long-term success.
Answer: C
Q3) Core values provide ethical guidelines for how individual employees will behave.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Strategic Leadership: Managing the Strategy Process
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Sample Questions
Q1) The minimum wage in the country of New Morland is $8 an hour. Odion, a restaurant in New Morland's capital city, pays its servers $8 per hour. However, the management of the restaurant feels that this amount is excessive for workers whose only job is to clear tables. By continuing to adhere to the rules set by the government of New Morland, which of the following responsibilities is Odion satisfying?
A) legal responsibilities
B) philanthropic responsibilities
C) ethical responsibilities
D) demographic responsibilities
Answer: A
Q2) Differentiate between a firm's intended, realized, and emergent strategies. Answer: Top-level executives design an intended strategy-the outcome of a rational and structured, top-down strategic plan. An emergent strategy describes any unplanned strategic initiative undertaken by mid-level employees of their own volition. If successful, emergent strategies have the potential to influence and shape a firm's strategy. A firm's realized strategy is generally a combination of its top-down strategic intentions and bottom-up emergent strategy.
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Page 4
Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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Sample Questions
Q1) Which of the following external forces is a part of a firm's task environment?
A) the composition of the strategic group to which the firm belongs
B) the interest rates prevalent in the economy in which the firm operates
C) the inflation level in the economy in which the firm operates
D) the recent innovations in process technology, including lean manufacturing
Answer: A
Q2) Years ago, the travel industry was controlled by a few large travel companies that booked holidays, air tickets, bus tickets, and hotels for their customers. However, with the emergence of the internet, smaller travel agencies started mushrooming in the industry and customers started making their own reservations. Which of the following can be inferred from this information?
A) The travel industry changed from a consolidated structure to a fragmented one.
B) The pricing power of the incumbent firms in the travel industry has increased.
C) The bargaining power of buyers in the travel industry has decreased.
D) The structure of the travel industry changed from monopolistic competition to an oligopolistic one.
Answer: A
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Page 5
Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies
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Sample Questions
Q1) Which of the following best exemplifies social complexity as an isolating mechanism?
A) Kristin's Cosmetics attempted to imitate how Monica's Makeup combined its management and product development systems with little success.
B) Kristin's Cosmetics failed to acquire the resources for its eyeliner at a low cost and thereby lost its competitive advantage over Monica's Makeup.
C) Kristin's Cosmetics had difficulty competing with Monica's Makeup because it could not access the many makeup factories in Kentucky as easily as its competitor.
D) Kristin's Cosmetics did not fully understand the reasons for the success of Monica's Makeup and therefore had difficulty competing with the firm.
Q2) A music distributor that decides to launch a proprietary music streaming service to respond to changes in music consumption trends exhibits dynamic capabilities.
A)True
B)False
Q3) Briefly describe the VRIO framework.
Q4) Explain how the activities of a firm help in achieving a competitive advantage.
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Page 6
Chapter 5: Competitive Advantage, Firm Performance, and Business Models
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Sample Questions
Q1) A high percentage of R&D/Revenue ratio indicates a(n)
A) strong focus on innovation to improve current products and services.
B) inefficiency in the management to focus on new products.
C) strong focus on marketing and sales to promote products and services.
D) negligent investment toward research and development.
Q2) Elena is the CEO of Geode Technologies, a consumer electronics manufacturer. Last year, Geode's return on invested capital (ROIC) was 11.6 percent, while Geode's closest competitor, NorthWest Tech, had an ROIC of 17 percent. Which of the following factors might Elena use to convince investors to invest in Geode rather than NorthWest Tech?
A) Geode had a Research & development (R&D) expense / Revenue ratio of 16 percent, while NorthWest Tech had an R&D / Revenue ratio of 12 percent.
B) Geode's working capital to revenue ratio was 75 percent, while NorthWest Tech's was 68 percent.
C) Geode's intangible intensity was 6 percent, while NorthWest Tech's was 3 percent.
D) Geode's plant, property, and equipment (PPE) over revenue ratio was 19 percent, while NorthWest Tech's was 10 percent.
Q3) List the dimensions on which a firm can create greater economic value.
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Page 7
Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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Sample Questions
Q1) Discuss product features as value drivers.
Q2) The major value drivers that managers have at their disposal include product features, customer service, and complements.
A)True
B)False
Q3) What are the two different generic business strategies available to firms?
Q4) What is higher value associated with?
Q5) Explain blue ocean strategy with the help of an example.
Q6) Briefly explain the difficulties in pursuing a blue ocean strategy
Q7) According to the five forces model, which of the following is viewed as a major risk to a business pursuing a cost-leadership strategy?
A) competition switching from non-price attributes to pricing
B) innovation that allows competitors to emerge with more economical replacements
C) new entrants with small production scale
D) suppliers requesting a 2% price increase across the industry
Q8) What are the pricing options available to a firm following a differentiation strategy?
Q9) How does process innovation benefit a firm?
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Chapter 7: Business Strategy: Innovation, Entrepreneurship, and Platforms
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Sample Questions
Q1) Which of the following accurately describes how Netflix used innovation to gain a competitive advantage?
A) Netflix moved from content development to upgrading its data analytics to provide faster online streaming.
B) Netflix applied big data analytics to its user preferences to provide highly personalized viewing recommendations.
C) Netflix moved from online streaming to online DVD rentals via the Internet.
D) Netflix applied first mover advantages to lock up talent needed to produce original content for DVD rentals and online streaming.
Q2) Explain some of the features of the introduction stage of the industry life cycle.
Q3) The four-step innovation process ends with A) idea generation.
B) invention.
C) idea testing.
D) imitation.
Q4) Explain the reasons for increasingly rapid technological diffusion and adoption.
Q5) What happens during the shakeout stage of the industry life cycle?
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Q6) Why do incumbent firms favor incremental innovation over radical innovation?
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Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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Sample Questions
Q1) When executives of a firm consider business opportunities only where they can leverage their existing competencies and resources, it can be concluded that the firm is using
A) related-constrained diversification.
B) related-linked diversification.
C) strategic outsourcing.
D) offshore outsourcing.
Q2) Phoenix Guitars is interested in pursuing backward integration to take greater ownership of the extraction of raw materials and production of components used in its signature line of guitars. Although this approach would lower the overall cost of producing a guitar, the costs associated with producing electronic pickups for sound amplification are far greater than those associated with sourcing pickups from a reliable supplier. Which of the following approaches is likely to produce superior results?
A) Invest in vertical integration despite the cost of producing pickups.
B) Abandon the idea of vertical integration entirely.
C) Pursue taper integration.
D) Introduce a budget line of guitars to diversify the firm's offerings.
Q3) Discuss the application of the core competence-market matrix.
Q4) How are information asymmetries created? What are the implications?
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Chapter 9: Corporate Strategy: Strategic Alliances, Mergers, and Acquisitions
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Sample Questions
Q1) Judging from the Disney-Pixar merger, which of these is an effective way to create shareholder value from a merger?
A) Integrate the acquired company as fully as possible, merging staffs and locations, so that all employees have as similar an on-the-job experience as possible.
B) If the acquired company creates high-quality products or services, don't force it to mirror the management style of the acquiring company.
C) Cut prices at the acquired company but not the acquiring company so that the acquisition covers all consumer price points.
D) Raise consumer prices at the acquiring company and the acquired company to reflect the fact that the market is now less competitive.
Q2) A company that wants to enter a new geographic market within China or Saudi Arabia should avoid joint ventures with companies that are based in that country. Partnering with a foreign entity props up that entity's business rather than weakening it through competition.
A)True
B)False
Q3) What does the relational view of competitive advantage propose?
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Page 11
Chapter 10: Global Strategy: Competing Around the World
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Sample Questions
Q1) Amber is a strategist for a furniture manufacturer that has a large presence in the United States and Canada. By checking economic and political reports, she knows that trade and investment barriers are falling among wealthy nations. She also knows that the price of oil has dropped 50 percent in the previous two years. Based on this information, what action should Amber and her company take?
A) Amber and her employer should wait out this period of uncertainty and take action when market forces are more stable.
B) They should anticipate market corrections because investment barriers and the price of oil inevitably rise.
C) Amber and her employer need to prepare for the cost of doing business to increase.
D) They should seriously consider globalization because of the falling trade and investment barriers.
Q2) Businesses located in countries that have relatively weak domestic demand rarely make the leap to multinational enterprises because they must focus their attention on shoring up their economic positions in their home countries.
A)True
B)False
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Page 12
Chapter 11: Organizational Design: Structure, Culture, and Control
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Sample Questions
Q1) A functional structure is recommended when a firm
A) has a broad focus in terms of its product/service offerings.
B) has a low level of diversification.
C) has a low degree of specialization.
D) diversifies into different product lines and geographies.
Q2) Which of the following global strategies best matches with a multidivisional structure?
A) international
B) multidomestic
C) global-standardization
D) transnational
Q3) Cheetah, a web development firm, wants to implement an organic structure to foster innovation and attract the most talented creative minds. Which of the following features will make it difficult to do so?
A) decision-making power distributed throughout the organization
B) a wide span of control for managers
C) dedication to a cost-leadership business strategy
D) flexible job descriptions for employees
Q4) What are the key elements of organizational structure? Define each element.
Q5) Discuss the not-invented-here syndrome with the help of an example.
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Chapter 12: Corporate Governance and Business Ethics
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Sample Questions
Q1) Delores recently became a board member of a firm that has a history of reckless actions by senior employees. Which task would be appropriate for Delores to undertake to help safeguard the company's financial health?
A) Request and review a copy of the firm's risk assessment plan, if such a plan exists.
B) Take part in the annual reviews of employees in the financial department.
C) Draft and circulate a statement that the firm's board members serve at the pleasure of the CEO.
D) Determine how to postpone or evade the firm's compliance with local, regional, and national regulations.
Q2) How does GE exemplify the creation of a shared value creation framework?
Q3) What is the benefit of granting stock options as part of a compensation package in a public stock company?
Q4) How can top management foster ethical behavior in employees? Provide an example that you have read about or that comes from your own experience.
Q5) Describe moral hazard with an example.
Q6) How does Nobel laureate Milton Friedman's view of the firm's social obligations tie in with shareholder capitalism?
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