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Exam 8: Global Management

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Question 31

Multiple Choice

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Two factors help determine the growth potential of foreign markets. They are foreign competition and:

A) communications and transportation systems
B) purchasing power
C) political stability
D) creative differences
E) product diffusion rate

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Question 32

Multiple Choice

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The purpose of pre-departure language and cross-cultural training is to .

A) cater to employees who require affective learning
B) increase job empathy
C) encourage job specialization
D) reduce the uncertainty for those becoming expatriates
E) avoid legal problems in the future

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Question 33

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A joint venture is an example of a strategic alliance.

Starbucks is a chain that is rapidly expanding its global operation. As it expanded into South America, its research showed that Chileans on average drink only 150 cups of coffee annually, and people in Argentina only drink about half that amount. An average citizen of the United States drinks 345 cups annually. These differences in annual coffee consumption most likely reflect .

The Green Giant consumer products company learned that it could not use their Jolly Green Giant character in parts of Asia where a green hat worn by a man signifies that he has an unfaithful wife. This is an example of a(n) that influenced global marketing.

An attractive business climate is defined by one single dimension: Does the business minimize the political risk to the company?

Ernst & Young, an international accounting and management consulting company, entered Hungary first by establishing a joint venture with a local firm. Ernst & Young later acquired the company with which it had the alliance. As a result Ernst & Young then had a(n) in Hungary.

The three strategies used to minimize or to adapt to the political risk inherent to global business are avoidance, control, and cooperation.

Coca-Cola In recent years, Georgia­based Coca­Cola attempted to reenter the Indian market. Coke was attracted to India's market because India's per capita consumption of carbonated beverages is less than half of Pakistan and about five percent of China's, yet India has the fastest­growing demand for consumer products in the world. Coke's first attempt to enter the Indian market a decade earlier was plagued by gross mismanagement, and the company lost 20 billion Indian rupies. In that first attempt, Coke purchased Thumbs Up, the leading India-based carbonated soft drink. The company hoped to replace Thumbs Up with Coke, while maintaining the Thumbs Up distribution strategy. For its return to the market, Coke built five plants, cut costly staff, revamped transport, and reduced the size and weight of bottles in order to increase a truck's carrying capacity. It also increased its number of distributors and dumped a global advertising campaign that proved irrelevant to the Indian market. -Refer to Coca-Cola. What kind of strategy has Coca-Cola used for its second entry into the Indian market?

Which of the following is a trend that has allowed companies to skip the phase model when going global?

A country or region that has an attractive business climate for companies that want to go global has found an .

Identify the two basic types of political risk facing organizations when conducting global business. Which one is more common?

Identify and discuss the basic components of an attractive business climate. Comment on the extent to which a fast food restaurant franchise might make a different assessment of relevant factors than would a capital-intensive business such as an oil refinery and pipeline company.

The two general kinds of trade barriers are:

According to Hofstede's research on cultural dimensions, modesty, caring for the weak, and quality of life.

Export restraints, government subsidies, and quotas are all examples of nontariff trade barriers.

As Malta got ready for its admittance into the European Union (EU) , all taxes on the importation of goods manufactured in Malta were eliminated. Malta was preparing to become part of a(n) .

Historically, companies have generally followed the phase model of globalization.

A cosmetics company that is considering entering the South American market would be especially interested in the discretionary income within that region. In other words, which of the following would be a determining factor in its global strategy?

Coca-Cola In recent years, Georgia­based Coca­Cola attempted to reenter the Indian market. Coke was attracted to India's market because India's per capita consumption of carbonated beverages is less than half of Pakistan and about five percent of China's, yet India has the fastest­growing demand for consumer products in the world. Coke's first attempt to enter the Indian market a decade earlier was plagued by gross mismanagement, and the company lost 20 billion Indian rupies. In that first attempt, Coke purchased Thumbs Up, the leading India-based carbonated soft drink. The company hoped to replace Thumbs Up with Coke, while maintaining the Thumbs Up distribution strategy. For its return to the market, Coke built five plants, cut costly staff, revamped transport, and reduced the size and weight of bottles in order to increase a truck's carrying capacity. It also increased its number of distributors and dumped a global advertising campaign that proved irrelevant to the Indian market. -Refer to Coca-Cola. As a multinational company, Coca-Cola .