Chapter 9

Which of the following is NOT a factor of production in Porter's model of international competitive advantage?:
1. capital.
2. labour.
3. technology.
4. infrastructure.
A licensing agreement:
1. is the least costly way to manage currency exchange rate fluctuations when exporting goods.
2. results in two organizations agreeing to share the risks and the resources of a new venture.
3. is the best way to protect proprietary technology from future competitors in other countries.
4. allows a foreign firm to purchase the rights to manufacture and sell a firm's products within a host country.
When a firm INITIALLY becomes internationally diversified, its returns:
1. become more variable.
2. decrease.
3. increase.
4. remain stable.
Firms in with emerging economies may want to form strategic alliances with firms from developing countries because:
1. it gains access to the foreign firm's sophisticated technology.
2. assets from the investing foreign company can be nationalized later.
3. disruption to the host-country's economy will be minimal.
4. there will be less cultural conflict than in licensing arrangements.
Which pair of industries would NOT be considered as "related and supporting" under Porter's diamond model?
1. U.S. computers and software
2. Italian leather-processing and shoes
3. Japanese cameras and copiers
4. Highway systems and the supply of debt capital
Moving into international markets is a particularly attractive strategy to firms whose domestic markets:
1. demand a differentiation strategy for success.
2. have developed unfriendly business attitudes toward the industry.
3. have too much regulation.
4. are limited in opportunities for growth.
A global strategy:
1. lacks responsiveness to local markets.
2. achieves efficient operations without sharing resources.
3. increases risk because decision-making is centralized.
4. is easy to manage because of common operating decisions.
Which of the following is NOT a motive for firms to become multinational?
1. to increase universal demand for the product
2. to take advantage of potential opportunities to expand the firm’s market
3. to secure resources that are required by the organization
4. to avoid high domestic taxation on corporate income
A nation's competitiveness depends, in part, on the capacity of its industry to ________ and thereby maintain its competitive advantage.
1. innovate
2. access critical resources
3. diversify internationally
4. protect proprietary capabilities
Which of the following is NOT a disadvantage associated with exporting?
1. tariffs imposed by local governments
2. high transportation costs
3. potential loss of proprietary technologies
4. loss of control over distribution activities

Chapter 9

Quiz