Managing Across Borders Study Guide

1. The value of a product (Willingness to Pay) to an average consumer is V; and the average price that the firm can charge a consumer for that product is P. Here, V - P can be termed as:

A. consumer surplus per unit.

B. producer surplus per unit.

C. profit growth.

D. profit per unit sold.

2. Which of the following is an example of a support activity in a firm's value chain?

A. Production

B. Customer service

C. Human resources

D. Marketing and sales

3. A firm benefits by basing each value creation activity it performs at that location where economic, political, and cultural conditions, including relative factor costs, are most conducive to the performance of that activity. Firms that pursue such a strategy can realize:

A. differentiation.

B. location economies.

C. vertical integration.

D. horizontal integration.

4. Lenovo's ThinkPad laptop computers is designed in the United States, the case, keyboard, and hard drive are made in Thailand; the display screen and memory in South Korea; the built-in wireless card in Malaysia; and the microprocessor in the United States. In each case, these components are manufactured and sourced from the optimal location given current factor costs. In this example, Lenovo has:

A. vertical integration advantages.

B. a global web of value creation activities.

C. learning effects.

D. high local responsiveness.

5. Which of the following is less likely to add to the pressure for a firm to be locally responsive?

A. National differences in consumer tastes and preferences

B. Differences in infrastructure and traditional practices

C. Switching costs for consumers

D. Host-government demands

6. Which of the following is an argument favoring centralization?

A. It permits greater flexibility.

B. Motivational research favors it.

C. It can avoid the duplication of activities.

D. It gives top management time to focus on critical issues by delegating routine issues to lower-level...