chapter 7a

chapter 7a - Your Results: The correct answer for each...

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Your Results: The correct answer for each question is indicated by a . 1 INCORRECT Companies opt to expand into foreign markets for such reasons as to A) boost returns on investment, broaden their product lines, avoid tariffs and trade restrictions, and escape having to deal with strong labor unions. B) gain access to new customers, achieve lower costs and enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base. C) grow sales faster than the industry average, reduce the competitive threats from rivals, and open up more opportunities to enter into strategic alliances. D) avoid having to employ an export strategy, avoid the threat of cross- market subsidization from rivals, and enable the use of a global strategy instead of a multicountry strategy. E) raise the entry barriers for industry newcomers, neutralize the bargaining power of important suppliers, grow sales faster, and increase the number of loyal customers. 2 INCORRECT A company is said to be an international competitor (as opposed to a global competitor) when it A) uses a multicountry strategy rather than a global strategy. B) has operations on only one of the world's major continents. C) competes in a select few foreign markets (and perhaps has only modest ambitions to enter additional country markets). D) employs an international strategy. E) employs something other than a "think global, act global" strategy. 3 INCORRECT Which one of the following is not a factor that a company must contend with in competing in the markets of foreign countries? A) Variations in market growth rates from country to country and important country-to-country differences in consumer buying habits and buyer tastes and preferences B) Country-to-country variations in host government policies and trade requirements C) The fact that product designs suitable for one country are sometimes inappropriate in another D) Vulnerability to adverse shifts in currency exchange rates E) A need to convince shippers to keep cross-country transportation costs low
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4 INCORRECT Which one of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true? A) Domestic companies trying to combat competition from foreign imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made. B) Fluctuating foreign exchange rates greatly reduce the risks of competing in foreign markets—the big problem occurs when exchange rates are fixed at unreasonably low levels. C) Domestic companies under pressure from lower-cost imports are benefited when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made. D)
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This note was uploaded on 10/02/2011 for the course FIN 685 taught by Professor Grady during the Spring '11 term at Texas A&M.

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chapter 7a - Your Results: The correct answer for each...

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