International Business: The New Realities 5th edition by S Tamer Cavusgil test bank
Objective: 1-4: Describe why firms internationalize
AACSB: Analytical Thinking
61) A U.S. shoe manufacturer is considering internationalizing to promote growth by diversifying its markets. Which of the following, if TRUE, would most strongly support the claim that moving to France would help the company grow through market diversification?
A) Doing business in France would likely expose the company to new ideas for product innovation.
B) French women tend to purchase shoes more frequently than do French men.
C) French consumers represent a sizeable market that could significantly boost the company's sales.
D) Many of the company's U.S. customers have moved overseas to Europe.
Answer: C
Diff: 2: Moderate
Skill: Critical Thinking
Objective: 1-4: Describe why firms internationalize
AACSB: Analytical Thinking
62) Which of the following contributes LEAST to increasing a company's profit margins?
A) increasing demand
B) increasing global competition
C) high-growth markets
D) underserved economies
Answer: B
Diff: 2: Moderate
Skill: Application
Objective: 1-4: Describe why firms internationalize
AACSB: Analytical Thinking
63) Which of the following best explains why the Japanese firm Canon relocated much of its production to China?
A) low-cost financial capital
B) low-cost labor
C) access to raw materials
D) lack of skilled managerial talent in home country
Answer: B
Diff: 1: Easy
Skill: Application
Objective: 1-4: Describe why firms internationalize
AACSB: Analytical Thinking
64) Which of the following best explains why Taiwanese computer manufacturers established subsidiaries in the United States?
A) low-cost financial capital
B) low-cost labor
C) access to raw materials
D) lack of skilled managerial talent in home country
Answer: A
Diff: 2: Moderate
Skill: Application
Objective: 1-4: Describe why firms internationalize
AACSB: Analytical Thinking
Sterling Auto International (Scenario)
Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts.
65) One shareholder questioned the CEO's rationale for beginning an exploratory effort to establish a new manufacturing plant in India. The CEO responded by explaining that India was an untapped market with a high demand for products such as those produced by Sterling. His rationale represented an example of which of the following reasons for international expansion?
A) investing in a potentially rewarding relationship with a foreign partner
B) gaining access to lower-cost or better-value factors of production
C) seeking opportunities for growth through market diversification
D) better serving key customers that have relocated abroad
Answer: C
Diff: 2: Moderate
Skill: Critical Thinking
Objective: 1-4: Describe why firms internationalize
AACSB: Analytical Thinking
66) The CEO introduced another overseas effort by noting that it represented an attempt to confront an international competitor. The CEO was most likely referring to which of the following efforts?
A) a new plant established in Vietnam to benefit from low-cost labor