Fred r david – strategic management, 13th edition ch5

In recent years, Arab executives have not considered international and global business involvement to be astrategic choice essential for growth and development... Arab executives from Mo

Name _

TRUE/FALSE Write 'T' if the statement is true and 'F' if the statement is false

1)

Firms face complex and challenging factors in competing globally 1)

_

2)

Arab-based companies have been aggressively venturing abroad for 30 years now 2)

_

3)

Governments in various parts of the world have relaxed market regulations and accelerated privatization

of state-owned companies

3)

_

4)

In recent years, Arab executives have not considered international and global business involvement to be astrategic choice essential for growth and development

4)

_

5)

Arab executives from Morocco to Oman have intended to expand their business to international markets 5)

_

6)

Market expansion allows companies to realize an economy of scale 6)

_

7)

Despite their accessibility to capital or a greater amount of liquidity, the companies in the Gulf region fail

to seize opportunities

7)

_

8)

Increasing competition, and the willingness of many Arab executives, has induced many companies to expand overseas

8)

_

9)

One of the reasons why Arab executives have set their eyes on expanding beyond domestic and regional markets is to capitalize on core competencies

9)

_

10)

Major Arab companies have recognized the need to sustain their competitiveness and meet their competitors on similar fronts

10)

11)

In 2009, Advanced Technology Investment Company of Abu Dhabi acquired Singapore’s Chartered Semiconductor Manufacturing

11)

12)

Planet Food World, a Saudi based company, has invested heavily in agriculture products, mainly industrial farms, in Turkey

12)

13)

Arab countries rarely vary in their commitment to international expansion and activities 13)

14)

Up to the early 1970s, most Arab business people served as representatives of, and/or distributors for major multinational corporations

14)

15)

The globalization focus ignores the global market as the platform for action 15)

16)

In the process of globalization, the activities and involvement of the firms are determined by opportunities.

16)

17)

Both internationalization and global approaches have been essential in enabling Arab business to leave their mark on the world economy

17)

18)

Arab companies are confronted with various issues as part of their global expansion 18)

19)

The methods of tackling various issues due to global expansion are product of a single factor 19)

20)

In today’s business, executives have ample access to information provided by various sources 20)

21)

The World Factbook includes information related to the history, people, government, economy, geography,

communications, transportation, military, and transnational issues of 266 nation states

21)

22)

It is not so important for Arab executives to monitor global trends as long as they are familiar with general and economic conditions of the target country or region

22)

23)

Regardless of which country a company chooses to operate in, its executives must understand that differences do exist and must be approached with an open mind

23)

24)

Demographically, while some countries have experienced an acute shortage in youth population, the Arab world has a high ratio of youth

24)

25)

The IMF divides the world into three major groups advanced economies, old economies, and emerging/developing economies

25)

26)

The share of the United States in world exports of goods and services is 9.9 percent, while that of Saharan Africa (44 countries) is over 20 percent

sub-26)

27)

The economic growth in China and India, along with other emerging economies, especially Russia and Brazil, is expected to fuel world economic growth

27)

28)

With 60 percent of the world's population spread out over three continents, BRIC already accounts for 35 percent of global GDP

28)

29)

The growth of other emerging and developing economies was impressive as economically advanced countries struggled with the 2008 financial crisis

29)

30)

Emerging economies are becoming less and less important as they no longer offer attractive investment opportunities for global retailers

30)

31)

The Global Retail Development Index 2009 suggests that many Arab states have joined the ranks of the major emerging market countries

31)

32)

As cultural and economic differences always exist among countries, Arab executives have had to give-up surveillance and alert systems

32)

33)

In a world where global presence has become essential, Arab firms have no choice but to position themselves strategically

33)

34)

There are hundreds of markets, but which markets to focus on is a strategic decision that should top the marketing manager's list of priorities

34)

35)

Gupta and Govindarajan suggested that companies should engage in "directed opportunism" or opportunism led by a systematic and logical framework

35)

36)

When companies have multiproduct or multiple business units, the market might be attractive for a particular product or business but not for others

36)

37)

Market entry strategies rarely differ across industries and target markets

37)

38)

Angela Martins, international director of Banco ABC Brasil, states that Brazil's growth is easy for Arab estate investors to ignore

real-38)

39)

Export is the newest and possibly the least risky approach to foreign market expansion 39)

40)

Modern Arab firms in the early twentieth century, especially from Syria and Lebanon, were pioneers in export business

40)

41)

Under a franchising agreement, McDonalds or Hilton might supply a local businessman in Cairo with its intangible property and operational knowledge

41)

42)

Unlike licensing, franchising gives the franchiser more say in how the business should operate 42)

43)

Contract manufacturing gives the company the opportunity to increase its foreign investment 43)

44)

In 2005, UNESCO reported that the Arab world has spent U.S $1,000 billion on turnkey projects in the past three decades

44)

45)

Joint ventures with governments are often a good way to establish efficient operations 45)

46)

Companies utilize different modes for entering into a market and, depending on the situation, can use multiple modes simultaneously

46)

47)

Trade openness and the liberalization process, along with increasing numbers of MNCs from the Western world, have changed the nature of competition in the world market

non-47)

48)

In the global marketplace, strategy is not a vital instrument for competitively positioning a company 48)

49)

Multidomestic strategy is a strategic approach where the subsidiary company allows its parent company todecide how to compete in various markets

49)

50)

As companies operate globally, they utilize their production capacity and achieve lower production costs 50)

51)

Arab firms have many global brands 51)

52)

Recently, Saudi Arabia took the initiative in establishing several knowledge cities across the country 52)

53)

A global strategy is simply the leveraging of benefits of the firm’s country of origin 53)

54)

Porter argues that the scale of a firm used to be important for Arab firms to compete globally but this is no longer the case in a globalized market

54)

55)

Achieving superior performance relative to competitors requires an establishment and sustained comparative position over rivals, including domestic firms

55)

56)

The key to successful global strategy is to manage the interactions between the different goals and means.

56)

57)

Companies are endowed with various different capabilities and resources, and when they operate overseasthey are confronted with complex factors and demands

57)

58)

Instead of making efforts to adjust to differences in foreign markets, companies will often exploit those differences in order to create opportunities

58)

59)

The expansion of Arab companies into global markets constitutes an opportunity for growth and learning

59)

60)

The expansion of Arab companies into global markets eases prevailing management practices 60)

61)

There are many very large Arab firms operating globally 61)

62)

In the near future, more Arab corporations will expand their markets into Asia, Africa, Europe, and other regions

62)

63)

Arab corporations have to rethink their roles globally and embark on strategic initiatives to seize global opportunities

63)

64)

Arab corporations should not study the strategic approaches of their counterparts in emerging countries because those counterparts have found it hard to acheive success

Prior to the last twenty years, the involvement of Arab firms in the global market place were primarily limited to specific sectors that include

65)

A)

energy, petrochemicals, and trade

B)

energy, petrochemicals, and transportation

C)

energy, trade, and transportation

D)

energy, transportation, and space 66)

The various reasons why Arab executives from Morocco to Oman are interested in expanding beyond domestic and regional markets include

66)

A)

new market exploration

B)

technology advancement

C)

accessibility to low cost materials

D)

market expansion

E)

all the above 67)

The major Arab companies that have established a presence in attractive markets in emerging economies and the western world are

67)

A)

Aramco, EPCO, and the National Bank of Kuwait

B)

Aramco, ADNOC, and the National Bank of Kuwait

C)

Aramco, SABIC, and the National Bank of Kuwait

D)

Aramco, Qatar Petrochemicals, and the National Bank of Kuwait

68)

Two strategic focal points for expansion are 68)

A)

globalization and privatization

B) globalization and nationalization

C)

globalization and localization

D)

globalization and internationalization

69)

The is limited to expansion to a few countries 69)

A)

vertical integration strategy

B) global strategy

C)

international strategy

D) low-cost leader strategy

70)

Executives who subscribe to orientations tend to project the beliefs and values of the parent company on its subsidiaries and offices abroad

70)

A)

regiocentric

B)

polycentric

C)

geocentric

D)

ethnocentric

E)

None of the above 71)

Executives who consider the culture of the host country as appropriate to guide the operation and decisionmaking are from orientations

71)

A)

regiocentric

B)

geocentric

C)

polycentric

D)

ethnocentric

E)

All of the above 72)

Under orientations, executives are guided by the best practice globally and tend to prefer an integrated approach to managing operations

72)

A)

regiocentric

B)

polycentric

C)

geocentric

D)

ethnocentric

E)

None of the above 73)

Managers, who subscribe to orientations, find it useful to let the general beliefs and values prevailing in a particular region guide the operations there

73)

A)

regiocentric

B)

polycentric

C)

ethnocentric

D)

geocentric

E)

All of the above 74)

The following UN agencies provide detailed and relevant information about conditions in many countries 74)

A)

World Health Organization (WHO), World Trade Organization (WTO), and World Bank

B)

World Bank, World Trade Organization (WTO), and International Monetary Fund (IMF)

C)

World Bank, World Health Organization (WHO), and International Monetary Fund (IMF)

D)

World Health Organization (WHO), World Trade Organization (WTO), and International Monetary Fund (IMF) 75)

Which of the following is not a global trend that was specified in the Mckinsey & Company study? 75)

A)

A growing number of consumers in emerging economies

B)

Growth of public sector

C)

Growing global demographic trends

D)

Increasingly global labor and talent markets

E)

Increasing constraints in supply or usage of natural resources 76)

Which global trends should be integrated into strategic planning? 76)

A)

The increasing influence of emerging economies in the global marketplace, and the growth of the public sector

B)

The growth of the public sector, and integration in business and social realms

C)

The increasing influence of emerging economies in the global marketplace, and increasingly global labor and talent markets

D)

The influence of emerging economies in the global marketplace, and interaction in business and social realms

77)

Investing in emerging economies can bring what immediate benefits to Arab businesses? 77)

A)

increasing communication and greater ease of obtaining and developing knowledge

B)

Application of scientific techniques and approaches to business management

C)

Diversification of portfolios, and access to natural resources and untapped markets

D)

Diversification of portfolios and greater ease of obtaining and developing knowledge 78)

From Brazil to Japan, and from Spain to China, cultural differences are apparent in religious beliefs and 78)

A)

regard for time and work

B)

dress

C)

eating habits

D)

personal interaction

E)

all the above 79)

Firms in the Gulf Cooperation Council (GCC) states lack a competitive advantage when positioning themselves strategically This is due to

79)

A)

a shortage of qualified manpower

B)

an inability to deal with staggering opportunities

C)

an inability to project the global market growth

D)

inadequate ability to exploit the market 80)

Gupta and Govindarajan suggested which of the following as a choice available for companies considering entering a foreign market?

80)

A)

Establish reasonable foothold

B)

Gradual entry

C)

Disregard for now

D)

Rapid entry

E)

All the above 81)

Which city is not a popular choice among international property investors scouting for locations to build a signature office tower?

81)

A)

Guatemala city

B) Mexico city

C) Panama city

D) New York city

82)

Which of the following is not a way of entering foreign markets?

82)

A)

Investment

B) Merging

C)

Contractual approaches

D) Exporting

83)

The oldest and possibly the least risky approach to foreign market expansion is 83)

A)

turnkey operations

B) licensing

C)

franchising

D) export

84)

In the last three decades, many Arab firms have utilized as an ideal way to enter international markets and accumulate experience abroad

84)

A)

turnkey operations

B) licensing

C)

export

D) joint venture

85)

Which of the following is not an advantage of export?

85)

A)

It is easy to carry out without investing scarce resources

B)

The company has full ownership of profits

C)

It is low-cost and low-risk

D)

It is easy to arrange suitable distribution channels 86)

Which type of agreement represents a producer giving the rights of their intellectual property in return for royalties?

86)

A)