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Unformatted text preview: 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 maimfacturingand 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 Ilia jen@8Iilpeti~7"8M8s<~tfi&-6nn'en.q' of the country where goods are manufactured ~1i8W !9 "eam- ii. Exporters are disadvantaged when the currency of the country where goods are manufactured grows stronger (bm~~\1~~ c,Uv"~~'(\C~-V 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) j a. Multi-Country Strategy - W I . 8:1 I t lip 3 i . 1.lt.~'tlf9Pn , ~.in accordance with local conditions and differing buyer tastes and preferences (entire supply chain in more than one country) i. ~" 1. The company's actions and business approaches are deliberately crafted to P-...'__ ag;taIt ~,.f _,nra 2. Essential when ... . a. Significant country to country differenq~s in customer preference & buying habits b. Significant cross-country differences ip_distributiqp channels and marketing methods c. ck;vernments enact rg,ulatioll.requiring products meet specifications and standard~ a. Trade restrictions of host governments are diverse and complicated 11.:82' ., 1. Winning in one country does not necessarily signal the ability to fare well in other 90untries! ". Q.o'Jo..n\aqe '\Y \ C\'l\\( \ C()\,\V\\Y\f 2 . 1 9 1__"DII*380~~seew:esjn9ue!Wl.lntry it; largely r emtfilllllri:,.,tDat)\lRt1y(spillover effect is minimal, if any) 3. HiII.Il".~'.~'S~~ncHlI; and resources across borders ~ V\~V"O to n--o..n~ CJ:)m~-\cn c..\CS ~ -(c.sou~ 4. Does not promote building a single unified competitive advantage- especially one based on low cost b. Global Strategy- A company employs .1 .. ~:aempetitive.appmachi....
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- Fall '08