Chap 12

1) Which of the following statements about Zara is most likely FALSE?

• Zara puts fewer products on clearance racks than most of its competitors in the industry.
• Zara's large advertising budget generates word-of-mouth and attracts new buyers.
• New products and designs are delivered to Zara stores every three to four weeks.
• Most of Zara's products move through the firm's distribution center in Spain.

2) Political, legal, economic, monetary, and institutional forces comprise the ________ of international business and influence managers' actions.

• environment
• competition
• culture
• threat

3) Phillip is an international business manager with Corbin Manufacturing. Which of the following serves as an external influence on the business decisions that Phillip makes?

• production plant locations
• host country monetary policy
• supply chain linkages
• product design standards

4) ________ is the framework that managers apply to determine the competitive moves and business approaches that run the company.

• Competition
• Growth
• Strategy
• Vision

5) Which force in Toyota's immediate environment would most likely have the greatest impact on its strategy?

• interest rate trends
• technology developments
• shifts in U.S. political attitudes
• actions taken by Honda and Mercedes Benz

6) Which of the following is NOT among the five forces in the Five-Forces Model of Industry Structure?

• governments
• substitute products
• potential new entrants
• suppliers of raw materials

7) Which of the following is the best example of a product disruption driving industry change?

• redesign of Toyota's Prius
• introduction of Apple's iPad
• AT&T's purchase of T-Mobile
• merger of United and Continental

8) The industry organization (IO) paradigm reports that, on average, the best predictor of firm strategy is the ________.

• company's stockpile of assets, skills, and capabilities
• aggressiveness of a company's marketing objectives
• link between a company's products and processes
• structure of the industry in which it competes

9) The Industry Organization (IO) paradigm assumes which of the following?

• stable political and cultural trends
• shifting foreign-exchange rates
• perfect competition
• unequal value

10) Which of the following is the most important constraint on the explanatory power of the IO paradigm?

• Many industries are imperfectly competitive.
• Many companies are locally but not internationally competitive.
• Most customers have perfect knowledge of the products they select.
• Most industries have many firms that each have small market shares.