Chap 13

1) Comparing countries in international business is LEAST useful for determining the ________.

• best location for sales and production
• sequence of entering different countries
• amount of resources to allocate in each country
• selection of which managers to send to which countries

2) International managers most likely need to understand how to evaluate international geographic alternatives because ________.

• they usually have a surplus of resources and need to take advantage of all opportunities
• many regional trading groups prohibit companies from outside of the trading group from manufacturing in more than one member country
• the commitment of resources to one locale may require forgoing projects in other locales
• decreased worldwide transportation costs and increased trade liberalization now allow companies to serve worldwide markets from a single production location

3) Executives at Wilson Enterprises need to determine how to leverage and improve the firm's existing competencies on a global basis. What are the two most basic questions that they must answer?

• Which markets should we serve and where should production be located to serve those markets?
• What are the short-term competitive advantages of the project and what is the return on investment?
• What is the total investment required and what are the managerial resources needed to supervise the investment?
• What is the availability of land and what is the cost of labor?

4) A company's overall geographic strategy should be flexible enough to ________.

• implement concentration strategies instead of diversification strategies
• respond to new opportunities and withdraw from less profitable ones
• import from anywhere in the world to a single production location
• export anywhere in the world from a single production location

5) Elison Enterprises is planning international geographic expansion. A manager at Elison has been given the task of scanning for locations primarily to ________.

• reduce the number of options available to a manageable number for further detailed analysis
• assure the compatibility between the mode of corporate operation and the country
• assure that all countries within a region have similar investment climates
• decide whether to use a concentration or a diversification strategy

6) Which of the following most accurately compares the techniques of scanning versus detailed analysis of countries?

• Scanning is used for planning and detailed analysis is used for control.
• Detailed analysis is used to consider countries overlooked in the scanning process.
• Scanning considers a large number of countries so that only the most promising ones undergo a detailed analysis.
• Scanning compares one country to another, whereas detailed analysis compares regions within a single country.

7) Opal Computers is considering international production expansion. After scanning to decide on a few countries to consider more closely, Opal managers will most likely need to ________.

• identify firms with which to form joint ventures
• add some more countries for closer consideration
• travel to the locations to analyze and collect specific data
• make final decisions by expanding in locations near their rivals

8) Escalation of commitment is best described as the ________.

• strategy of first entering a country on a small scale
• process of entering a country because "everyone else is going there"
• expectation of a higher return in more politically risky environments
• increased likelihood of investing in a country because of having spent considerable time and money in examining it

9) Sales expansion is probably the most important variable in determining international location decisions. This statement is most likely based on the assumption that ________.

• consumer demand exceeds supply
• increased sales will lead to more profits
• the company will have a first-mover advantage
• raw materials are available in the country targeted for sales

10) Dawson Manufacturing produces and sells DVD players and is planning to expand sales internationally. Dawson has narrowed down the list of potential countries to India and Guatemala. A Dawson manager has the task of obtaining data regarding the number of DVD players sold annually in India and Guatemala. If unable to locate this information, she might most likely estimate the sales potential of these two countries by ________.

• determining average wages
• calculating future inflation rates
• reviewing the countries' dependence on steel imports
• examining the sales history of flat-screen televisions