International Business Risks and Strategies

Questions and Answers

What is the primary reason firms must customize their marketing mix?

To address varying consumer needs and market segments. (correct)

To satisfy universal consumer preferences.

To ensure product is identical across all markets.

To reduce costs associated with marketing.

Which factors contribute to the variation of consumer needs across countries?

Global technological standards.

Color and texture preferences only.

Marketing strategies used globally.

Legal requirements and economic development. (correct)

How do legal considerations affect product attributes?

They mandate specific labeling and safety standards. (correct)

They encourage a single marketing strategy.

They only impact advertising, not product design.

They allow for a uniform product design worldwide.

What impact do national differences in standards have on firms?

They require firms to adapt their marketing strategies. Signup and view all the answers

Which of the following is NOT mentioned as a factor causing variation in consumer preferences?

Pricing strategies. Signup and view all the answers

What evidence points towards a change in consumer behavior globally?

Increasingly cosmopolitan tastes and preferences. Signup and view all the answers

What must firms consider when marketing their products internationally?

The existence of cross-national segments. Signup and view all the answers

How can technical standards affect marketing strategies?

By complicating mass production across borders. Signup and view all the answers

What is the relationship between product attributes and consumer satisfaction?

Products must align with consumer needs to sell successfully. Signup and view all the answers

Which of the following statements best summarizes the challenges of global product marketing?

Differences in culture and law limit the ability to sell the same product worldwide. Signup and view all the answers

Study Notes

International Business Risks

Political changes can significantly impact international operations.
Foreign exchange risk involves fluctuations affecting exporting or producing abroad.
Natural disasters, exemplified by the 2011 tsunami, can disrupt supply chains and operations.
Pandemics, like COVID-19, can severely affect global trade and business continuity.

Analyzing Country Aspects

Assign grades to countries based on specified aspects related to international business.
Weight each aspect to formulate a comprehensive score.
Exclude countries that meet "no-go" conditions early in the analysis.

Porter’s Generic Strategies

Cost Leadership focuses on low costs and pricing, targeting average customers with minimal differentiation.
Differentiation aims to provide unique products that offer perceived value, targeting niche markets willing to pay higher prices.
Differentiation can be tangible (observable product traits) or focus on unique attributes like quality or prestige.

Organizational Structures

Functional Structure organizes the company by functions, beneficial for companies with limited product ranges but may hinder cross-functional knowledge.
Divisional Structures specify roles by product or market, allowing for international divisions or product-based divisions, though they can create inefficiencies.

International Division Structure

Isolates international operations as a stand-alone unit; may create tensions between domestic and international divisions.

Worldwide Product Division Structure

Groups products by worldwide divisions, commonly used by multinational enterprises (MNEs) but can cause coordination issues.

Worldwide Area Division Structure

Divides operations by geographic areas, facilitating distribution but may lead to redundant efforts.

Global Matrix Structure

Aimed at balancing global integration and local responsiveness, allowing for decision-making across multiple perspectives; can lead to complexity in supervision.

Boundaryless Companies

Feature flatter organizational formats promoting egalitarian access to information and decision-making with a focus on self-organizing teams.

Network Structure

Delegates people and resources to decentralized projects, optimizing outsourcing and supported by advanced communication technologies.

Virtual Organizations

Operate across geographies with links reinforced by technology. Employees are often viewed as free agents, moving across projects rather than adhering to rigid hierarchies.

Market Segmentation

Marketing strategies must adapt to diverse segments, recognizing cross-national differences and customizing products or packaging accordingly.

Product Attributes

Successful products align attributes with consumer preferences, influenced by legal, cultural, and economic factors.
Legal considerations and technical standards may necessitate product modifications across different markets.

Cultural Differences in Product Attributes

Cultural factors such as tradition, language, and religion can vastly affect consumer preferences, showing that a truly global culture remains elusive.

Description

This quiz explores the various risks faced by international businesses, including political, economic, and environmental challenges. Additionally, it delves into strategies such as cost leadership and differentiation that companies can adopt to navigate these risks effectively. Test your knowledge on the intricacies of global commerce and strategic management.