Exam 2 Short Answer

Exam 2 Short Answer - EXAM 2 REVIEW All Possible Questions...

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EXAM 2 REVIEW All Possible Questions on the Exam 1. Briefly identify the special features of competing in foreign markets. (p. 197 - 201) a. Cultures and lifestyles differ among countries b. Differences in market demographics and income levels c. Variations in manufacturing and distribution costs d. Fluctuating exchange rates e. Differences in host government economic and political demands i. Local content requirements, restrictions on exports, regulations on prices of imports, import tariffs or quotas, other regulations (ex. technical standards, product certification, withdrawal of funds, ownership) 2. Explain how exchange rate fluctuations pose a risk to manufacturing companies who rely upon an export strategy to compete in foreign markets. (p. 199 - 200) a. Companies with manufacturing facilities in a particular country are most cost- competitive in exporting goods to world markets when the local currency is weak (or declines in value relative to other currencies); their competitiveness erodes when the local currency grow stronger relative to the currencies of the countries to which the locally made goods are being exported i. Exporters always gain in competitiveness when the currency of the country where goods are manufactured grows weaker ii. Exporters are disadvantaged when the currency of the country where goods are manufactured grows stronger 3. Discuss in some detail the difference between a multi-country strategy and a global strategy and give the pros and cons of each. (p. 201 - 202) a. Multi-Country Strategy – Varying the company’s strategic approach from country to country in accordance with local conditions and differing buyer tastes and preferences (entire supply chain in more than one country) i. Pros: 1. The company’s actions and business approaches are deliberately crafted to accommodate the differing tastes and expectations of buyers 2. Essential when… a. Significant country to country differences in customer b. Significant cross-country differences in distribution channels and marketing methods c. Governments enact regulations requiring products meet specifications and standards a. Trade restrictions of host governments are diverse and complicated ii. Cons: 1
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1. Winning in one country does not necessarily signal the ability to fare well in other countries! 2. Any competitive advantage a company secures in one country is largely confined to that country (spillover effect is minimal, if any) 3. Hinder transfer of a company’s competencies and resources across borders 4. Does not promote building a single unified competitive advantage – especially one based on low cost b. Global Strategy – A company employs the same basic competitive approach in all countries where it operates, sells much the same products everywhere, strives to build global brands, and coordinates its actions worldwide (economies of scale!) iii. Pros: 1. A company can more readily unify its operations and focus on establishing a brand image and reputation that is uniform from
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Exam 2 Short Answer - EXAM 2 REVIEW All Possible Questions...

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