Question 1

Consumer surplus captures some of the value of a product thereby reducing the price a firm can charges for it.

Accepted Answer

A) True 
 B)False

Question 2

Location economies are the economies that arise from performing a value creation activity in the optimal location for that activity,wherever in the world that might be.

Accepted Answer

A) True 
 B)False

Question 3

According to Michael Porter,_____ and _____ are the two basic strategies for improving creating value and attaining a competitive advantage in an industry.

Accepted Answer

A)   differentiation; low-cost
B)   value creation; generalization
C)   one-size-fits-all; zero-sum
D)   comparison; standardization
E)   profitability; strategic fitF) None of the above
G) D) and E)

Question 4

_____ are the economies that arise from performing a value creation activity in the optimal place for that activity,wherever in the world that might be.

Accepted Answer

A)   Diversification economies
B)   Value-building economies
C)   Location economies
D)   Support economies
E)   Core economiesF) A) and D)
G) All of the above

Question 5

For a firm to maximize its profitability,it is necessary that it:

Accepted Answer

A)   creates products similar to the products of its competitors.
B)   does not configure its internal operations to reduce costs.
C)   minimizes the value of the consumer surplus
D)   picks a position on the efficiency frontier that is viable.
E)   strips all the value out of its product offering.F) A) and D)
G) A) and C)

Question 6

Which of the following is a disadvantage of a strategic alliance?

Accepted Answer

A)   Entering into a strategic alliance, makes it difficult for a firm to enter into a foreign market.
B)   As a result of strategic alliance, fixed costs of developing new products tend to increase.
C)   Strategic alliance gives competitors a low-cost route to new technology and markets.
D)   Firms that enter into a strategic alliance with a foreign firm tend to face higher trade barriers.
E)   Strategic alliance always leads to a loss to either of the firms involved.F) B) and E)
G) A) and D)

Question 7

One of the reasons why a firm typically charges for a good or service less than the value placed on that good or service by the customer is because:

Accepted Answer

A)   the firm attempts to create value for the consumers by providing them a wide range of products
B)   it is normally impossible to segment a market based on each customer's reservation price.
C)   the value creation results in a corresponding reduction in costs of production.
D)   the firm frequently modifies its products to compete with the products introduced by other firms.
E)   it is highly unlikely that the same good or service will be available to the customers from other firms.F) All of the above
G) A) and D)

Question 8

Which of the following terms best represents the norms and value systems that are shared among the employees of an organization?

Accepted Answer

A)   Process scenario
B)   Organizational structure
C)   Business structure
D)   Organizational culture
E)   Management structureF) B) and C)
G) None of the above

Question 9

The _____ of a value chain provide inputs that allow the primary activities to occur.

Accepted Answer

A)   lateral functions
B)   support activities
C)   core activities
D)   central activities
E)   secondary activitiesF) A) and B)
G) None of the above

Question 10

Discuss the significance of value creation.According to Michael Porter,what are the two primary strategies for creating value?

Accepted Answer

The way to increase the profitability of...

Question 11

Processes are:

Accepted Answer

A)   the manner in which decisions are made and work is performed within the organization.
B)   the metrics used to measure the performance of subunits.
C)   the devices used to reward appropriate managerial behavior.
D)   the metrics used to make judgments about how well managers are running the subunits.
E)   the norms and value systems that are shared among the employees of an organization.F) B) and D)
G) A) and E)

Question 12

Responding to pressures for cost reduction requires a firm to try to lower the costs of value creation.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following support functions is most likely to involve dealing with the organizational structure,control systems,and culture of the firm?

Accepted Answer

A)   Human resource function
B)   Logistics
C)   Information systems
D)   Company infrastructure
E)   Inventory managementF) A) and B)
G) A) and C)

Question 14

The actions that managers take to attain the goals of the firm are referred to as a firm's strategy.

Accepted Answer

A) True 
 B)False

Question 15

Labor productivity increases over time as individuals understand the most efficient ways to perform particular tasks.This is as a result of _____.

Accepted Answer

A)   diminishing returns
B)   location economies
C)   economies of time
D)   learning effects
E)   an efficiency frontier.F) A) and B)
G) All of the above

Question 16

Which of the following is a support activity in the operations of a firm?

Accepted Answer

A)   Research and development
B)   Customer service
C)   Marketing and sales
D)   Creation and maintenance of information systems
E)   ProductionF) All of the above
G) A) and C)

Question 17

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

Accepted Answer

A)   standardization
B)   differentiation
C)   target-identification
D)   low-cost
E)   profitabilityF) A) and C)
G) A) and E)

Question 18

According to researchers,firms facing strong pressures for local responsiveness should pursue a global standardization strategy.

Accepted Answer

A) True 
 B)False

Question 19

The liberalization of the world trade and investment environment in recent decades,by facilitating greater international competition,has generally:

Accepted Answer

A)   increased cost pressures.
B)   decreased the demand for local responsiveness.
C)   decreased pressures for cost reduction.
D)   increased consumer surplus.
E)   reduced the production of conventional commodity products.F) A) and C)
G) B) and E)

Question 20

Which of the following terms best represents the requirements that are the same all over the world,such as steel,bulk chemicals,and industrial electronics?

Accepted Answer

A)   Universal needs
B)   Efficiency frontier
C)   Global web
D)   Lateral requirements
E)   Supreme needsF) A) and C)
G) C) and D)

Exam 12: The Strategy of International Business

Discuss the significance of value creation.According to Michael Porter,what are the two primary strategies for creating value?

Correct AnswerverifiedThe way to increase the profitability of...View AnswerShow Answer

Location economies are the economies that arise from performing a value creation activity in the optimal location for that activity,wherever in the world that might be.

Correct AnswerverifiedShow Answer

Processes are:

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of a strategic alliance?

Correct AnswerverifiedShow Answer

According to Michael Porter,_____ and _____ are the two basic strategies for improving creating value and attaining a competitive advantage in an industry.

Correct AnswerverifiedShow Answer

Labor productivity increases over time as individuals understand the most efficient ways to perform particular tasks.This is as a result of _____.

Correct AnswerverifiedShow Answer

The actions that managers take to attain the goals of the firm are referred to as a firm's strategy.

Correct AnswerverifiedShow Answer

Consumer surplus captures some of the value of a product thereby reducing the price a firm can charges for it.

Correct AnswerverifiedShow Answer

The liberalization of the world trade and investment environment in recent decades,by facilitating greater international competition,has generally:

Correct AnswerverifiedShow Answer

For a firm to maximize its profitability,it is necessary that it:

Correct AnswerverifiedShow Answer

Which of the following terms best represents the norms and value systems that are shared among the employees of an organization?

Correct AnswerverifiedShow Answer

Which of the following terms best represents the requirements that are the same all over the world,such as steel,bulk chemicals,and industrial electronics?

Correct AnswerverifiedShow Answer

Which of the following support functions is most likely to involve dealing with the organizational structure,control systems,and culture of the firm?

Correct AnswerverifiedShow Answer

One of the reasons why a firm typically charges for a good or service less than the value placed on that good or service by the customer is because:

Correct AnswerverifiedShow Answer

_____ are the economies that arise from performing a value creation activity in the optimal place for that activity,wherever in the world that might be.

Correct AnswerverifiedShow Answer

Which of the following is a support activity in the operations of a firm?

Correct AnswerverifiedShow Answer

Responding to pressures for cost reduction requires a firm to try to lower the costs of value creation.

Correct AnswerverifiedShow Answer

According to researchers,firms facing strong pressures for local responsiveness should pursue a global standardization strategy.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The _____ of a value chain provide inputs that allow the primary activities to occur.

Correct AnswerverifiedShow Answer

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The way to increase the profitability of...
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According to Michael Porter,_ and _ are the two basic strategies for improving creating value and attaining a competitive advantage in an industry.

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