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Globus Final Exam | Latest Questions with 100% Correct Answers
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Globus Final Exam | Latest Questions with 100% Correct Answers
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Globus Final Exam | Latest Questionswith 100% Correct Answers
Factors That Shape Strategy Choices
in International Markets - ✔ ✔ The degree to which there are important country differences
in buyer tastes, market sizes, and growth potential.
Whether opportunities exist to gain a location-specific advantage based on wage rates,
worker productivity, inflation rates, energy costs, tax rates, and other factors that impact cost
structure.
The risks of adverse shifts in currency exchange rates.
The extent to which governmental policies affect the business environment .
Differences in local buyer tastes - ✔ ✔ Raise manufacturing and distribution costs.
Reduce scale economies and learning curve effects.
Differences in market growth potential - ✔ ✔ Demographics, income levels, and cultural
attitudes vary widely in emerging markets.
Lack of infrastructure, distribution systems,
and retail networks limits market growth.
The Risks of Adverse
Exchange Rate Shifts - ✔ ✔ Exporters gain in competitiveness when the currency of the
country in which the goods are manufactured is weak relative to the currency of the country
to which the goods are to be exported.
The Impact of Host-Government Policies on the Local Business Climate - ✔ ✔ Host-government
policies that create a business climate favorable to foreign firms agreeing to construct or
, expand production and distribution facilities in the host country include: Reduced taxes, Low-
cost loans, Site-development assistance.
The Impact of Host-Government Policies on the Local Business Climate (cont'd) - ✔ ✔
Host-government policies negatively affecting foreign-based firms include: Environmental
regulations, Customs requirements, tariffs, and quotas
Local content requirements, Requiring prior approval of capital spending projects, Limits on
repatriation of local funds, Local ownership or partner requirements, Subsidies for
domestic companies.
Advantages to exporting - ✔ ✔ Conservative way to test international waters
Minimizes both risk and capital requirements.
An export strategy is vulnerable when - ✔ ✔ Manufacturing costs in the home country are
higher than
in foreign countries where rivals have plants.
The costs of shipping the product to distant markets
are relatively high.
Adverse shifts can occur in currency exchange rates.
Licensing makes sense when a firm: - ✔ ✔ Has valuable technical know-how or a patented
product but has neither the internal capabilities nor resources to enter foreign markets.
Wants to avoid the risks of committing resources to country markets that are
unfamiliar, politically volatile, economically unstable, or otherwise risky.
Seeks to generate income from potential royalties.
Disadvantage of licensing: - ✔ ✔ Providing technical know-how to foreign firms creates risks
and difficulty in maintaining control over its use.
Franchising Strategies Advantages and Disadvantage - ✔ ✔ Advantages:
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