Troy University Amazon Acquisitions and Joint Ventures Discussion
Troy University Amazon Acquisitions and Joint Ventures Discussion
Respond to question 3: How does the company you are analyzing in your project (Amazon)use acquisitions and joint ventures in international markets? Does it use acquisitions and joint ventures as dominant entry modes in international markets and if so why? If not, what are its dominant entry modes, and why?
True / False
1. In place of relatively stable and predictable domestic markets, firms across the globe find that they are competing in relatively unstable and unpredictable global markets.
a. True
b. False
ANSWER: True
2. After a firm decides to compete internationally, it must select its strategy and choose a mode of entry into international markets.
a. True
b. False
ANSWER: True
3. Because there are still several industrial and consumer markets in which only domestic firms compete, many firms do not have to be able to compete internationally.
a. True
b. False
ANSWER: False
4. One reason why firms pursue international opportunities is to extend the product’s life cycle.
a. True
b. False
ANSWER: True
5. A reason that firms use international strategies is to secure needed resources, especially minerals and energy.
a. True
b. False
ANSWER: True
6. In some industries, technology drives globalization because the economies of scale necessary to reduce costs cannot be met by competing in domestic markets alone.
a. True
b. False
ANSWER: True
7. A major incentive for the use of international strategy by French-based Carrefour Group is the potential for large demand for goods and services from emerging markets such as China and India.
a. True
b. False
ANSWER: True
8. The three basic benefits of international strategies are 1) increased market size; 2) increased economies of scale and learning; and 3) development of competitive advantages through location.
a. True
b. False
ANSWER: True
9. Rivals Airbus and Boeing have multiple manufacturing facilities and outsource activities partly for the purpose of developing economies of scale as a source of being able to create value for customers.
a. True
b. False
ANSWER: True
10. As an indication of the importance of economies of scale, Ford Motor Company runs a single global business developing cars and trucks that can be built and sold through the world.
a. True
b. False
ANSWER: True
11. Coca Cola and PepsiCo are examples of firms that have found it unnecessary to aggressively pursue international strategies because of extensive growth opportunities available in the U.S. market.
a. True
b. False
ANSWER: False
12. Multinational firms have many opportunities to learn from their experiences in international markets, but they must have a strong R&D system to absorb the knowledge.
a. True
b. False
ANSWER: True
13. Cultural differences affect location advantages in that business transactions are less difficult for a firm to complete when there is a strong match among the cultures with which the firm is involved.
a. True
b. False
ANSWER: True
14. Location advantages are influenced by costs of production, access to natural resources and critical supplies, as well as the needs of customers, but not culture.
a. True
b. False
ANSWER: False
15. The three corporate-level international strategies are cost leadership, differentiation, and focus.
a. True
b. False
ANSWER: False
16. When a firm initially pursues an international business-level strategy, the resources and capabilities established in the home country frequently allow the firm to pursue the strategy into markets located in other countries.
a. True
b. False
ANSWER: True
17. Michael Porter’s Determinants of National Advantage describe factors associated with the firm’s domestic environment that contribute to its dominance in a particular global industry.
a. True
b. False
ANSWER: True
18. Both the size and the nature of a country’s domestic demand for a particular industry’s good or service are important in Porter’s determinants of national advantage.
a. True
b. False
ANSWER: True
19. Having substantial supplies of critical basic natural resources is a necessary condition for a country to support businesses that can successfully compete in international markets.
a. True
b. False
ANSWER: False
20. South Korea’s success in international markets is primarily a result of its abundant natural resources.
a. True
b. False
ANSWER: False
21. Italy has become the leader in the shoe industry because of related and supporting industries such as a well-established leather-processing industry that provides the leather needed to construct shoes and related products.
a. True
b. False
ANSWER: True
22. A firm based in a country with a national competitive advantage is not guaranteed success as it implements its chosen international business-level strategy. Instead, the actual strategic choices managers make may be the most compelling reasons for success or failure.
a. True
b. False
ANSWER: True
23. A multi-domestic strategy is an international strategy in which a firm’s home office determines the strategies business units are to use in each region.
a. True
b. False
ANSWER: False
24. A major advantage of multi-domestic strategies is the ability to customize products and services for the specific market, although this sacrifices economies of scale.
a. True
b. False
ANSWER: True
25. The firm using a global strategy seeks to develop economies of scale as it produces the same or virtually the same products for distribution to customers throughout the world who are assumed to have similar needs.
a. True
b. False
ANSWER: True
26. The global strategy offers greater opportunities to take innovations developed at the corporate level or in one market and apply them to other markets.
a. True
b. False
ANSWER: True
27. Research suggests that the performance of the global strategy is enhanced if it deploys in areas where regional integration across countries is occurring.
a. True
b. False
ANSWER: True
28. A transnational strategy is an international strategy in which the firm seeks to achieve both global efficiency and local responsiveness.
a. True
b. False
ANSWER: True
29. A transnational strategy is difficult to use because of its conflicting goals.
a. True
b. False
ANSWER: True
30. Even if effectively implemented, the transnational strategy often produces lower performance than does the implementation of either the multi-domestic or global strategies.
a. True
b. False
ANSWER: False
31. The growing number of global competitors heightens the requirements to keep costs down and there is the desire for more specialized products to meet customer needs. These two pressures make transnational strategies increasingly necessary.
a. True
b. False
ANSWER: True
32. A company that chooses a truly global corporate-level strategy assumes that the liability of foreignness will be minimal.
a. True
b. False
ANSWER: True
33. Four types of distances are associated with the liability of foreignness: cultural, administrative, geographic, and economic.
a. True
b. False
ANSWER: True
34. The “regionalization” environmental trend means that firms can focus on a region (customization) but also have some standardization or sharing within the region.
a. True
b. False
ANSWER: True
35. By choosing a region where markets are more similar, the firm may be able to better understand those markets and cater to their needs, but also achieve economies through sharing of resources.
a. True
b. False
ANSWER: True
36. International associations such as the European Union, the Organization of American States, and the North American Free Trade Association encourage regionalization of competition rather than globalization.
a. True
b. False
ANSWER: True
37. Exporting and licensing are the most appropriate ways for smaller firms to first enter international markets.
a. True
b. False
ANSWER: True
38. The high cost of transportation, expense of tariffs, and loss of control are three disadvantages of exporting.
a. True
b. False
ANSWER: True
39. Evidence suggests that, in general, using an international cost leadership strategy when exporting to developed countries has the most positive effect on firm performance while using an international differentiation strategy with larger scale when exporting to emerging economies leads to the greatest amounts of success.
a. True
b. False
ANSWER: True
40. Because of the lack of protection of intellectual property in some foreign countries, licensing arrangements are one of the best ways for a firm to protect its technology from being appropriated by potential competitors.
a. True
b. False
ANSWER: False
41. Although licensing is the least costly method to enter a foreign market, its disadvantages include high costs of transportation and low control over the marketing and distribution of goods.
a. True
b. False
ANSWER: False
42. Strategic alliances tend to increase the risk associated with international expansion for the U.S. partner because of the greater dependence on the foreign firm.
a. True
b. False
ANSWER: False
43. Establishing a wholly-owned subsidiary provides the quickest access to a new market.
a. True
b. False
ANSWER: False
44. Research suggests that wholly owned subsidiaries and expatriate staff are inappropriate for service industries because those industries require close contact with customers, high levels of professional skills, specialized know-how, and customization.
a. True
b. False
ANSWER: False
45. The greenfield venture option is useful when control of proprietary technology is important in an international expansion.
a. True
b. False
ANSWER: True
46. When the country risk is high, firms prefer to enter with a greenfield investment rather than a joint venture.
a. True
b. False
ANSWER: False
47. While there are multiple means of entering new international markets, firms should use one method consistently with all of its various products and across its different markets in order to reduce administrative complexity.
a. True
b. False
ANSWER: False
48. Export, licensing, and the strategic alliance entry modes are all appropriate for early market development.
a. True
b. False
ANSWER: True
49. Acquisitions, greenfield ventures, and sometimes joint ventures are appropriate when firms want to establish a strong presence in an international market.
a. True
b. False
ANSWER: True
50. International diversification can help to reduce a firm’s overall risk through the stabilization of returns.
a. True
b. False
ANSWER: True
51. Research has shown that, as international diversification increases, firms’ returns decrease initially but then increase quickly as firms learn to manage international expansion.
a. True
b. False
ANSWER: True
52. International diversification is a strategy through which a firm expands the sale of its goods and services across borders of global regions and countries into a potentially large number of geographic locations of markets. Instead of entering one or a few markets, international diversification means that the firm enters multiple markets.
a. True
b. False
ANSWER: True
53. The chief risks in the international environment are political and cultural.
a. True
b. False
ANSWER: False
54. Fluctuation in the value of different currencies is a major economic risk associated with international diversification.
a. True
b. False
ANSWER: True
55. A U.S. manufacturer of pigments for household paint that exports about 40 percent of its production to European markets will find its sales will be harmed by a weak dollar.
a. True
b. False
ANSWER: False
56. An increase in the value of the U.S. dollar is an example of an economic risk in that it can reduce the value of U.S. multinational firms’ international assets and earnings in other countries.
a. True
b. False
ANSWER: True
57. Some of the costs incurred by firms pursuing international diversification may derive from higher coordination expenses, trade barriers, and lack of familiarity with local cultures.
a. True
b. False
ANSWER: True
58. Although leaders in Russia have tried to reassure potential investors about their property rights, political risks in the form of weak laws and commonplace government corruption make firms leery of investing in Russia.
a. True
b. False
ANSWER: True
59. The amount of diversification in a firm’s international operations that can be managed varies from company to company and is affected by managers’ abilities to deal with ambiguity and complexity.
a. True
b. False
ANSWER: True
Multiple Choice
60. International strategy refers to a(n):
a. action plan pursued by American companies to compete against foreign
