Diversification Quiz

Strategy through which the firm sells products in markets outside the firm's domestic market.

• International Strategy

• Global strategy

• Multidomestic strategy

Which of the following is NOT an incentive for firms to become multinational?

• To gain access to consumers in emerging markets

• To avoid high domestic taxation on corporate income

• Opportunities to integrate operations on a global scale

• To gain easier access to raw material

All of the following are international corporate-level strategies EXCEPT the strategy:

• Multidomestic

• Transnational

• Universal

• Global

A ____strategy assumes more standardization of products across country boundaries

• Transnational

• Global

• Multidomestic

________ is an entry mode in which an agreement is formed that allows a foreign company to purchase the right to manufacture and sell a firm’s products within a host country’s market or a set of host countries’ markets.

• Acquisitions

• Exporting

• Licensing

• Strategic alliance

________ is an entry mode through which the firm sends products it produces in its domestic market to international markets.

• Acquisitions

• Exporting

• Licensing

• Strategic alliances

A reason that firms use international strategies is to secure needed resources, especially minerals and energy.

• True

• False

The three corporate-level international strategies are cost leadership, differentiation, and focus.

• True

• False

International diversification provides greater economies of scope and learning which, along with greater innovation, help produce above-average returns.

• True

• False

Which of the following is not one of the three main types of diversification strategies?

• Product Diversification

• Geographic Diversification

• Vertical Diversification

• Competitor Diversification