93 Questions
What is the key word used to describe the basic economic problem that all societies face?
Scarcity
In the PEST framework for environmental analysis, what does the 'E' stand for?
Economic
What does the term 'third sector' refer to?
Voluntary sector
What is Political/Country Risk defined as?
Exposure to potential loss or adverse effects on company operations and profitability caused by developments and legal systems
What is the role of the political system?
To integrate the various parts of its society into a viable, functioning whole
What does a two-party system entail?
Two broadly based parties dominate, alternating between government and opposition, reflecting electoral fortunes
What is meant by 'Civil Society'?
The presence of freely functioning voluntary groups, including religious, political, and labor, indicating genuine pluralism
What is the average lifespan of a strategic alliance?
7 years
What does strategic control refer to?
Control over the means and methods on which the whole conduct of an organization depends
According to Michael Porter, what is the most important determinant of a firm’s profitability?
Industry attractiveness
What does the international product life cycle suggest about a developed country's product export/import cycle?
Developed country initially exports, loses its expected markets, and then becomes an importer of the product from developing countries
What does trust between alliance partners lead to?
More willingness to share information
What does strategic group analysis involve?
Identifying firms with similar strategies or competing bases
What does the 5 forces model analyze?
A firm's competitive position in a specific market segment or similar market segments
What do mobility barriers prevent?
Other firms from entering the strategic group and threatening existing members
What facilitates globalization according to the text?
Improvements in communication
Who are stakeholders according to the text?
Individuals, groups, or organizations that are affected by or can affect the activities of a business
What can hinder potential newcomers from entering a market according to the text?
Economies of scale
Why do strategic alliances between large Western MNFs and emerging economy firms often fail according to the text?
Divergent partner objectives
What does Operational Risk refer to?
Changes in rules affecting business operations
Which legal systems are mentioned in the text?
Common law, Civil law, Theocratic law
What does Transfer risk involve?
Impediments to factors of production transfer, such as capital
What are the sources of Political risk mentioned in the text?
Systematic, procedural, distributive, and catastrophic factors
What does Systematic Risk arise from?
Shifts in public policy, like changes in political leadership
What does Strategic Management involve?
Setting long-term direction for an organization
Which companies are mentioned as global strategy examples?
IKEA and Walmart's withdrawal from Germany
What are the industry globalizing factors mentioned in the text?
Market, cost, government, and competitive factors
What are the drivers of Porter's Diamond model?
Local factor and demand conditions, related industries, and firm strategy
What are examples of strategic alliances mentioned in the text?
Joint marketing campaigns, cooperative product development, and joint ventures
What does First mover advantage include?
Building strong market share and setting market standards
What does the Uppsala model help understand?
A firm’s initial choice of international location and mode of entry into foreign markets
What is the key word used to describe the basic economic problem that all societies face?
Scarcity
In the PEST framework for environmental analysis, what does the 'E' stand for?
Economic
What does the term 'third sector' refer to?
Voluntary sector
What is the main role of the political system as mentioned in the text?
To integrate the various parts of its society into a viable, functioning whole
What does Civil Society indicate according to the text?
Presence of freely functioning voluntary groups
What does Ownership risk entail according to the text?
Government could change governance structure or expropriate
What characterizes a Multi-party system based on the text?
Many parties representing a wide spectrum of views and coalition government
What does the Uppsala model help understand?
The process of internationalization and mode of entry into foreign markets
What does Transfer risk involve?
Impediments to factors of production transfer, such as capital
What is Political/Country Risk defined as?
The risk of loss due to political changes in a country
What does Strategic Management involve?
Setting long-term direction for an organization
What are the sources of Political risk mentioned in the text?
Systematic, procedural, distributive, and catastrophic factors
What does Operational Risk refer to?
Changes in rules affecting business operations
What are the drivers of Porter's Diamond model?
Local factor and demand conditions, related industries, and firm strategy
What does First mover advantage include?
Building strong market share and setting market standards
Which legal systems are mentioned in the text?
Common law (UK, USA), Civil law (Europe), and Theocratic law (Iran, Saudi Arabia)
What does the term 'Civil Society' refer to?
Organizations and institutions independent of the government
What facilitates globalization according to the text?
Strategic alliances and global market access
What does trust between alliance partners lead to?
Enhanced collaboration and mutual benefit
What does the international product life cycle suggest about a developed country's product export/import cycle?
It initially exports, loses its expected markets, and then becomes an importer of the product from developing countries
What is the most important determinant of a firm’s profitability according to Michael Porter?
Industry attractiveness
What does the 5 forces model analyze?
A firm’s competitive position in a specific market segment or similar market segments
What is the average lifespan of a strategic alliance?
About 7 years
What does strategic group analysis involve?
Identifying firms with similar strategies or competing bases
What do mobility barriers prevent?
Other firms from entering the strategic group and threatening existing members
What facilitates globalization according to the text?
Improvements in communication, looser immigration laws, and the removal of controls on movement of capital across borders
What is meant by 'Stakeholders'?
Individuals, groups, or organizations affected by or affecting the activities of a business
What does strategic control refer to?
Control over the means and methods on which the whole conduct of an organization depends
What does the term 'Globalization' entail according to the text?
Integration and interconnectedness of economies, cultures, and societies
What does the Uppsala model help understand?
The internationalization process of firms
What does trust between alliance partners lead to?
Increased willingness to share information
What is the main role of the political system as mentioned in the text?
Ensuring social welfare and economic stability
What does the term 'Civil Society' refer to?
Non-profit organizations
What does Systematic Risk arise from?
Market-wide factors
What is the key role of Civil Society as mentioned in the text?
Promoting pluralism and freedom of expression
What does a Multi-party system entail based on the text?
A coalition of parties representing a wide spectrum of views
What does Ownership risk entail according to the text?
Potential forced reduction of stake by sharing ownership with local firm
What is Political/Country Risk defined as based on the text?
Exposure to potential loss caused by developments in the political system
What is the primary focus of Operational Risk?
Changes in tax system
Which of the following is an example of a legal system mentioned in the text?
Religious law
What does Transfer risk involve?
Impediments to capital transfer
What are the sources of Political risk mentioned in the text?
Systematic, procedural, and distributive factors
What does Systematic Risk arise from?
Shifts in public policy
Which of the following is an example of a global strategy mentioned in the text?
IKEA and Walmart's withdrawal from Germany
What are the industry globalizing factors mentioned in the text?
Market, cost, and government factors
What do Porter's Diamond model drivers include?
Local factor and demand conditions, related industries, and firm strategy
What are examples of strategic alliances mentioned in the text?
Joint marketing campaigns, cooperative product development, and joint ventures
What does First mover advantage include?
Building strong market share and setting market standards
What does the Uppsala model help understand?
A firm’s initial choice of international location and mode of entry into foreign markets
What does Strategic Management involve?
Setting long-term direction for an organization
What is the average lifespan of a strategic alliance?
7 years
According to Michael Porter, what is the most important determinant of a firm’s profitability?
Industry attractiveness
What does the international product life cycle suggest about a developed country's product export/import cycle?
It initially exports, then becomes an importer
What does the 5 forces model analyze?
Competitive position in a specific market segment
What is the role of trust between alliance partners?
Makes partners more willing to share information
What are mobility barriers designed to prevent?
Entry of new firms into a strategic group
What facilitates globalization according to the text?
Improvements in communication
What does the term 'stakeholders' refer to?
Individuals, groups, or organizations affected by or affecting a business
What does strategic control refer to?
Control over the means and methods on which the whole conduct of an organization depends
What does the term 'globalization' entail according to the text?
Improvements in communication and looser immigration laws
What does the term 'strategic group analysis' involve?
Identifying firms with similar strategies or competing bases
What does the term 'barriers to entry' hinder in the market?
Potential newcomers from entering a market
Study Notes
International Business and Risk Management
- Operational Risk refers to changes in rules, like arbitrary tax system changes, affecting business operations
- Legal systems include Common law (UK, USA), Civil law (Europe), and Theocratic law (Iran, Saudi Arabia)
- Transfer risk involves impediments to factors of production transfer, such as capital
- Political risk sources include systematic, procedural, distributive, and catastrophic factors
- Systematic Risk arises from shifts in public policy, like changes in political leadership
- Strategic Management involves setting long-term direction for an organization
- Global strategy examples include IKEA and Walmart's withdrawal from Germany
- Four industry globalizing factors are market, cost, government, and competitive factors
- Porter's Diamond model drivers include local factor and demand conditions, related industries, and firm strategy
- Strategic alliances examples include joint marketing campaigns, cooperative product development, and joint ventures
- First mover advantage includes building strong market share and setting market standards
- Uppsala model helps understand a firm’s initial choice of international location and mode of entry into foreign markets
Global Business Management Key Points
- Strategic alliances between large Western MNFs and emerging economy firms often fail due to divergent partner objectives.
- Strategic control refers to control over the means and methods on which the whole conduct of an organization depends.
- The average lifespan of a strategic alliance is about 7 years.
- Trust between alliance partners makes them more willing to share information.
- Strategic group analysis involves identifying firms with similar strategies or competing bases.
- Mobility barriers prevent other firms from entering the strategic group and threatening existing members.
- Michael Porter argues that the most important determinant of a firm’s profitability is industry attractiveness.
- The 5 forces model can be used to analyze a firm’s competitive position in a specific market segment or similar market segments.
- Barriers to entry, such as economies of scale, production differentiation, and expected retaliation, can hinder potential newcomers from entering a market.
- The international product life cycle suggests that a developed country initially exports, loses its expected markets, and then becomes an importer of the product from developing countries.
- Globalization is facilitated by improvements in communication, looser immigration laws, and the removal of controls on movement of capital across borders.
- Stakeholders are individuals, groups, or organizations that are affected by or can affect the activities of a business.
Global Business Management Key Points
- Strategic alliances between large Western MNFs and emerging economy firms often fail due to divergent partner objectives.
- Strategic control refers to control over the means and methods on which the whole conduct of an organization depends.
- The average lifespan of a strategic alliance is about 7 years.
- Trust between alliance partners makes them more willing to share information.
- Strategic group analysis involves identifying firms with similar strategies or competing bases.
- Mobility barriers prevent other firms from entering the strategic group and threatening existing members.
- Michael Porter argues that the most important determinant of a firm’s profitability is industry attractiveness.
- The 5 forces model can be used to analyze a firm’s competitive position in a specific market segment or similar market segments.
- Barriers to entry, such as economies of scale, production differentiation, and expected retaliation, can hinder potential newcomers from entering a market.
- The international product life cycle suggests that a developed country initially exports, loses its expected markets, and then becomes an importer of the product from developing countries.
- Globalization is facilitated by improvements in communication, looser immigration laws, and the removal of controls on movement of capital across borders.
- Stakeholders are individuals, groups, or organizations that are affected by or can affect the activities of a business.
Test your knowledge of international business and risk management with this quiz. Explore topics such as operational risk, legal systems, transfer risk, political risk, strategic management, global strategy, industry globalizing factors, Porter's Diamond model, strategic alliances, first mover advantage, and the Uppsala model. Whether you're a student or a professional, this quiz will challenge your understanding of key concepts in the field.
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