International Business
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Questions and Answers

What is the primary concern regarding the growth of wearable technology?

  • Wearable technology is too expensive for most people.
  • People are unaware they already use wearable technology. (correct)
  • Companies are losing interest in developing wearable technology.
  • Wearable technology is not beneficial for health.

    • Which statement accurately describes the function of augmented reality (AR)?

  • AR is only used for entertainment and has no practical applications.
  • AR requires the use of virtual reality headsets for interaction.
  • AR adds a new layer of information to the existing reality. (correct)
  • AR completely replaces the real world with a virtual one.

    • What is a significant issue related to the communication technologies like smart glasses?

  • Privacy concerns arise from their potential to record everything. (correct)
  • They are too complicated for users to understand their functions.
  • They can only be used as heavy electronics without practical value.
  • They are inaccurately marketed to business users.

    • How can Google glasses be effectively utilized in the business world?

    <p>They assist in hands-free scanning of items.</p> Signup and view all the answers

    What is the expected advancement indicated for virtual assistants?

    <p>They are expected to have more complex functionalities.</p> Signup and view all the answers

    What is recognized as the 6th force in market analysis?

    <p>Government regulation</p> Signup and view all the answers

    In the context of company ecosystems, what is a key characteristic of such arrangements?

    <p>Collaboration to create collective value.</p> Signup and view all the answers

    Which stage in the Capability Maturity model implies a chaotic process?

    <p>Initial</p> Signup and view all the answers

    What does the BCG matrix utilize to divide companies?

    <p>Strategic business units</p> Signup and view all the answers

    Which question helps determine if something is a core competence?

    <p>Is it difficult to replicate?</p> Signup and view all the answers

    What is the purpose of performing a STEEPLE analysis?

    <p>To analyze market attractiveness</p> Signup and view all the answers

    What does the KPMG Innovation Lab Methodology primarily help with?

    <p>Identifying ecosystem opportunities</p> Signup and view all the answers

    What is typically NOT a characteristic of the 'Managed' stage in the Capability Maturity model?

    <p>Processes lack performance measurement</p> Signup and view all the answers

    What is a common misconception about the roles of subsidiaries within multinational enterprises (MNEs)?

    <p>All subsidiaries should be treated equally to maintain unity.</p> Signup and view all the answers

    Which principle of procedural justice ensures that local managers can express differing views?

    <p>Possibility for subsidiary managers to challenge perspectives</p> Signup and view all the answers

    What is a consequence of treating important markets similarly to unimportant ones?

    <p>Important subsidiaries may not receive adequate support.</p> Signup and view all the answers

    What is a recommended solution to manage subsidiary roles effectively?

    <p>Differentiate subsidiary roles based on market strategy.</p> Signup and view all the answers

    Which approach optimizes the exploitation of functional strengths at subsidiaries?

    <p>Selective decentralization of decision-making.</p> Signup and view all the answers

    What leads to a loss of entrepreneurial motivation in subsidiaries?

    <p>Complete dependence on corporate headquarters.</p> Signup and view all the answers

    Which method ensures consistency in decision-making across subsidiaries?

    <p>Adopting a uniform approach to all subsidiaries.</p> Signup and view all the answers

    Which principle is essential for supporting effective communication with local managers?

    <p>Transparent explanation of headquarters' decisions.</p> Signup and view all the answers

    What is a key characteristic of a contributor factory?

    <p>It is primarily oriented towards the host country’s output market.</p> Signup and view all the answers

    What is a primary function of a lead factory?

    <p>Playing a key role in localized manufacturing innovation.</p> Signup and view all the answers

    Which obstacle can hinder the upgrading of foreign factories?

    <p>Treating overseas factories as cash cows without long-term investment.</p> Signup and view all the answers

    What approach should multinational enterprises (MNEs) take with their foreign plants?

    <p>Recognize each factory's unique role in the portfolio.</p> Signup and view all the answers

    Which role is associated with factories that develop a 'best practice' model within an MNE?

    <p>Source factories.</p> Signup and view all the answers

    What outcome is expected from upgrading offshore and outpost factories?

    <p>Development of a robust network of factories.</p> Signup and view all the answers

    What can create instability in foreign factory operations?

    <p>Shifting production in response to fluctuating costs.</p> Signup and view all the answers

    How should MNEs assess their portfolio of international operations?

    <p>By recognizing evolving market conditions and drivers for expansion.</p> Signup and view all the answers

    What is the role of location-bound FSAs in the international business strategy?

    <p>They are crucial for accessing and benefiting from location advantages.</p> Signup and view all the answers

    Which constraint affects a firm's strategy for deploying its non-location-bound FSAs across borders?

    <p>Bounded reliability</p> Signup and view all the answers

    In the context of international business strategy, what might a firm do if it has insufficient internal FSAs?

    <p>Utilize complementary resources from external economic actors.</p> Signup and view all the answers

    What is the significance of developing new location-bound FSAs in the host country?

    <p>They are vital for capitalizing on the host country's location advantages.</p> Signup and view all the answers

    What does the term FSAs refer to in the context of international business?

    <p>Firm-Specific Advantages</p> Signup and view all the answers

    Which of the following statements is true regarding location advantages?

    <p>They complement the firm's existing advantages to enhance performance.</p> Signup and view all the answers

    What may influence how effectively a firm exploits its non-location-bound FSAs?

    <p>Strategic decision-making processes within the firm.</p> Signup and view all the answers

    How are non-location-bound FSAs characterized in the context of international operations?

    <p>They can be deployed across borders with appropriate strategies.</p> Signup and view all the answers

    What is the purpose of due diligence in relation to EBITDA?

    <p>To assist in negotiations over value and headline price</p> Signup and view all the answers

    Which of the following best describes normalization in financial analysis?

    <p>Adjusting historical performance for non-recurring items</p> Signup and view all the answers

    What does a data room provide during a company sale?

    <p>Information selectively disclosed to buyers</p> Signup and view all the answers

    What is the primary function of a Share Purchase Agreement (SPA)?

    <p>To define the legal framework of the transaction</p> Signup and view all the answers

    How does working capital affect a company's valuation?

    <p>Fluctuations in working capital can add to company value</p> Signup and view all the answers

    What are the indicative structures included in a Share Purchase Agreement?

    <p>Definitions, transaction structure, and closing mechanisms</p> Signup and view all the answers

    What role does the risk/value model play in mergers and acquisitions?

    <p>To evaluate how much to pay for a company based on risk and value</p> Signup and view all the answers

    What can be a consequence of including unfavorable information in a data room?

    <p>It can damage the relationship between the buyer and seller</p> Signup and view all the answers

    Study Notes

    International Business Strategy

    • A multi-national enterprise (MNE) effectively matches internal strengths with global opportunities and challenges
    • Essential for creating value and satisfying stakeholder goals

    5 Steps in Strategy

    • Define purpose with stakeholders
    • Conduct external analysis (industry forces, market attractiveness, cyclical analysis, disruptor analysis)
    • Conduct internal analysis (core competencies, people, finances, reputation)
    • Define strategy (integrating elements from analysis)
    • Implement strategy (implementation program, result monitoring, plan adaptation when needed)

    Stakeholders Analysis

    • Categories:
      • Shareholders (active and non-active family members, PE houses, stock exchange, STAKs, family offices, generations)
      • Management (key personnel, future shareholders, company continuity, culture, management style)
      • Key clients (long-term contracts, reputation for quality)
      • Funding (banks, shareholders' loans, suppliers, government)

    Business Purpose vs. Social Purpose

    • Clear purpose increases efficiency
    • Examples:
      • Business related: making the best lemonade, enabling energy efficiencies
      • Societal related: solving a global problem

    Social Purpose

    • Loss vs. Profit in relation to community
    • Examples: loss (healthcare crisis, wars, traditional economy), profit (value added, healthy communities, prospects)

    UN Sustainable Development Goals

    • Framework for aligning CSR activities with host country business objectives

    Impact Investment

    • Investment in companies that contribute socially and environmentally

    Purpose or Greenwash

    • Presenting actions as environmentally friendly for public image rather than genuine impact

    External Factors - Porter 5 Forces

    • Framework for evaluating industry competition

    External Factors - STEEPLE

    • Framework for analyzing competitive factors in specific markets (e.g., India)
      • Social, Technological, Ethical, Economical, Political, Legal, Ecological

    External Factors - KPMG Innovation Lab Methodology

    • Way to look at the position in the market, and look for opportunities

    Company vs. Ecosystem

    • Companies are increasingly part of ecosystems to create shared value for customers

    Internal Factors - Core Competences

    • Three questions to evaluate core competence (e.g., Miele appliances)
      • Access to multiple markets?
      • Perceived benefits to customers?
      • Difficult to imitate?

    Internal Factors - Metrics/Evaluation Framework

    • Evaluating factors like: Strength of assets, brand strength, market share growth, customer loyalty; Profit margins & competitive cost position
      • Methods such as GE-McKinsey Matrix are utilised

    Internal Factors - Reputation

    • Factors such as leadership vision, emotional connection, product quality, financial performance, corporate social responsibility

    External & Internal Factors Combined

    • Portfolio overview using methods such as the GE-McKensiy Matrix

    Value Drivers

    • Evaluation of factors like (e.g., product leadership, operational excellence, customer intimacy)
      • Cost per unit, number of units sold, direct material costs; People, market, products, infrastructure/technology, customers, operating environment

    9 Levers of Value

    • Financial outcomes, Markets, Propositions, Brands, Customers, Core processes, Technology/Operations, Governance, Culture, and Incentives

    Definition of Strategy

    • Focus on one key strategy area (e.g., cost leadership, differentiation, market niche)

    Value Discipline

    • Three types of strategy
      • Product leadership
      • Operational excellence
      • Customer intimacy

    Ansoff Matrix

    • Developing new products for existing customers & markets, penetrating existing markets, developing new markets

    Motivations for Foreign Expansion

    • The allocation of resources to conduct business activities in a given country

    8 Themes of New Reality

    • Key themes and questions raised by fast-paced global change
      • Work styles, Labour Force, Supply chains & Manufacturing, Customer Behaviour, ESG, Debt Burden, Globalization

    MNE's Resource Base

    • Physical, financial, human, upstream knowledge, downstream knowledge, administrative, reputational

    Routines

    • Stable procedures that use resources effectively

    Recombination

    • Artful orchestration of resources to adjust to international and local demands

    International Transferability of Firm-Specific Advantages

    • Adapting resources to overcome international challenges

    Location Advantages

    • Assessing location resources in a comparative format

    Types of Multinational Enterprises

    • Four types of structure
      • Centralized exporters
      • International projectors
      • International coordinators
      • Multi-centred enterprises - multiple bases

    Bounded Rationality

    • Decision-making with imperfect/incomplete information

    Bounded Reliability

    • Risk associated with incomplete fulfilment of promises

    Financing Options

    • Financing options (self-financing, venture capital, banks, etc.) that are utilised at various stages in the business' lifecycle
      • Different financing options appropriate for different stages in any business

    Data Room

    • Secure online space for sharing confidential documents in deals (e.g., an M&A).

    Share Purchase Agreement (SPA)

    • Detailed contract outlining terms, price, and conditions
      • Protecting and managing risk

    Quality of Earnings

    • Assessing a company's fundamental performance based on financial considerations.
      • Adjust items to include one-off or cyclical information

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    International Business Concepts 1-25 PDF

    Description

    Explore essential questions regarding wearable technology, augmented reality, and their business applications. This quiz delves into market analysis forces, the Capability Maturity model, and strategic frameworks like the BCG matrix. Test your understanding of innovation methodologies and the characteristics of company ecosystems.

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