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200. Political/ country Risk is Defined as Exposure to potential loss or adverse effects on company operations and profitability, caused by developments and/or legal systems Operate interdependently of each other 201. What is democracy? A system which at a minimum is based on accountability to the v...
200. Political/ country Risk is Defined as Exposure to potential loss or adverse effects on company operations and profitability, caused by developments and/or legal systems Operate interdependently of each other 201. What is democracy? A system which at a minimum is based on accountability to the voting public through regular, fair, and free elections 202. Sources of Political System Country Risk are Government, Political bodies, Legislative bodies, Lobbying groups, & Trade unions 203. The political systems role is To integrate the various parts of its society into a viable, functioning whole 204. Sources of Legal System Country Risk are Tax economic outcomes. Laws, regulations, and rules aim to Ensure order in commercial activities Protect intellectual property 205. Civil Society is the presence of freely functioning voluntary groups (including religious, political and labour) is a substantive indicator of genuine pluralism. 206. Two party system Are two broadly based parties dominate, alternating between government and opposition, reflecting electoral fortunes 207. Multi party systems Are many parties representing a wide spectrum of views and where the government is to be a coalition of parties 208. Types of Political Risk are Ownership risk, Operating risk & Transfer risk 209. Ownership risk means government could change governance structure or at extreme expropriation. Firms could be forced to reduce their stake by sharing ownership with local firm 210. Operational Risk are changes to the rules of the game - new and arbitrary change to the tax system 211. Legal Systems of the world: Common law system - UK, USA. Independent judiciary relying on case precedents Civil law is in Europe it relies on legal code applied universally Theocratic law - relies on religious code -Iran & Saudi Arabia 212. Transfer risk are impediments to the transfer of factors of production such as capital Sources of political risk Systematic, procedural, Distributive & Catastrophic 213. Systematic Risk is created by shifts in public policy, such as a new political leadership that may adopt a different approach than its predecessor 214. Procedural Risk is when Political actions can sometimes create frictions that interfere with the procedural transactions between unit 215. Distributive Risk are Political actions that aim to claim a greater share of rewards 216. Catastrophic Risk are random political developments that adversely affect the operations of every company in a country 217. Facets of Culture are Outward Expression Values & Beliefs Norms Communication 218. Strategic Management is a process of setting long term direction for the organisation 219. A global strategy involves a single strategy for the entire global network of subsidiaries and partners 220. Examples of a global strategy is IKEA, IKEA sells standardised, Swedish designed, self-assembly furniture for a low price Walmart withdrawing from Germany to avoid changing its selling low-priced products 221. Four industry globalizing factors are Market, Cost, Government & Competitive 222. Governments can encourage globalization of industries by Creating common, international technical standards 223. Which statements on civil law systems would be seen as an advantage by business Relevant areas of law are much easier to find than common law systems 224. What is the legal basis for common law systems? Precedents and Statutes 225. Which could be seen as a breach of contract Supplying computer chips that do not match the agreed product specifications 226. Laws relating to the Single Market Programme allow EU-based companies To move G&S from any member state to another To transfer managers to any member state To invest anywhere in the EU 227. A PEST analysis is A broad framework to help managers understand the environment in which their business operates 228. The four drivers in Porter's Diamond arise from: 1. Local factor conditions; 2. Local demand conditions; 3. Local related and supporting industries; 4. Local firm strategy, industry structure and rivalry 229. The Diamond model assumes that The national home base of a firm plays a key role in shaping that firm's competitive advantage in global markets 230. Which is NOT a strategic alliance? Merger 231. Which are examples of strategic alliance? Joint Marketing Campaign, Cooperative Product development & Joint Venture 232. A partnership between companies in different lines of business is called Diversification Alliance 233. An alliance between a supplier and a buyer that agree to use and share skills and capabilities in the supply chain is called Vertical integration alliance 234. What is the most important criterion for selecting an alliance partner? The alliance partner must help the company towards a competitive advantage 235. An optimal business partner in a successful international strategic should have two key qualities, they are Strategic and Cultural Fit 236. Why do alliances between a large multinational firm and an emerging economy often fail? The partner objectives are very divergent 237. What is strategic control? Control over the means and methods on which the whole conduct of an organisation depends 238. Internationalization stimuli refer to Internal and external factors that influence a firm’s decision to initiate, develop and sustain international business 239. First mover advantage suggests that Pioneering businesses can obtain higher profits and other benefits as the consequences of early market entry 240. Liability of Foreignness means that The difficulties because of the different norms and rules that constrain human behaviour are called Key MNC obstacle 241. First mover’s advantage 1. Opportunity to build up strong market share 2. Opportunity to create barriers to entry (economies of scale) 3. Allows the firm to set the standards and norms of the market 4. Allows cost advantages to develop such as access to resources, patents, and employee expertise 5. Potential for developing consumer loyalty is higher 6. Greater pre-emptive opportunities 7. More strategic options are open to first move 242. Second Movers Disadvantages: 1. Potential to be late to market 2. Playing catch up 3. Higher entry barriers 4. Gaining market share through imitation is difficult & can increase costs if money is spent on designing a new product. 243. The "second mover advantage" is When a company gets advantage from following others into a market or mimicking an existing product Facebook. Google. Microsoft. Amazon 244. Second Mover Advantages: 1. Firm can learn from the mistakes and experience of Mover No.1 2. Less risk is involved 3. More time to evaluate options 4. Possibility of 'free rider' or coat tails momentum 5. Lower marketing and R&D co 245. High psychic distance can Discourage the firm's use of strategic alliances 246. The Uppsala model can help to understand A firm’s initial choice of international location and its mode of entry into the foreign markets 247. Which are modes of entry into foreign markets Export International joint venture Franchising 248. Which is NOT a mode of entry into foreign markets? Internationalisation 249. franchising involves the transfer of a business concept, with corresponding operational guidelines, to non-domestic parties for a fee 250. De-internationalization involves the company failure and strategic decision making 251. Why do alliances between a large Western MNF and an emerging economy firm often fail? The partner objectives are very divergent 252. What is strategic control? It is control over the means and methods on which the whole conduct of an organisation depends 253. The average lifespan of a strategic alliance is about 7 years 254. What advantage comes from trust between alliance partners? It makes partners more willing to share information 255. Strategic group analysis refers to identifying firms with similar strategies or competing bases 256. Mobility barriers are Ones in which prevent other firms from entering the strategic group and threatening the existing members 257. Michael Porter has argued that the most important determinant of a firm’s profitability is / are Industry attractiveness 258. The 5 forces model can be used to Analyse a firm’s competitive position in a specific market segment or similar market segments 259. Obstacles which potential newcomers would encounter when entering a market is called Barriers to entry 260. Which of these are barriers to entry? Economies of Scale Production differentiation Expected retaliation 261. Which of these are NOT barriers to entry? Buyer switching costs 262. International Product life cycle suggests a developed country is initially an exporter then loses its expected markets and then finally become an importer of the product from developing countries 263. The international product life cycle does not apply to non-standard industrial products such as Luxury products 264. Forecasts are Educated assumptions about future trends and events 265. the process of training, planning and reassignment of employees to their home countries is called repatriation 266. Globalisation refers to a more integrated and interdependent world 267. What is a push factor in emigration? War 268. What does NOT facilitate globalization? barriers to trade and investment 269. What factors facilitate globalization 1. Improvements in communication 2. Looser immigration laws 3. Removal of controls on movement of capital across borders 270. What constitutes FDI? A UK energy company buying territory abroad where it expects to find oil reserves 271. What could be defined as an MNC? A firm owning a chain of supermarkets outlets outside its country of origin 272. What are drivers of globalization? 1. Technological advances 2. Reduction of trade barriers 3. A will for market liberalization 4. Integration of world financial markets 273. What are NOT drivers of globalization? 1. Trade barriers and controls on in flows of FDI 2. Weak competition 3. Economies of scale being exploited to the max 274. Globalisation is beneficial for firms because it opens new market opportunities 275. The internet facilitates globalization by Cutting the cost for firms of communicating across borders 276. Globalization can create problems for businesses because It can result in more competition 277. An environment which is increasingly complex and turbulent displays Increased speed of innovation 278. Strategy involves the following 1. Allocating resources to take advantage of opportunities arising from the organisations ext. environment 2. Determining the long-term direction of the org. 3. Understanding the goals of the org. 279. Stakeholders can be best defined as Any. individual group or org. that is affected by or can affect the activities of a business 280. In stakeholder mapping, one with a high level of power but low interest Should be kept satisfied 281. An impact analysis helps Firms to prioritize responses to the forces of the external environment 282. Exploring the strategic implications of global warming is best described as Scenario planning 283. PEST is an analytical tool which helps to undertake An external analysis 284. An analysis of the external environment enables a firm to identify Opportunities and Threats 285. Raising income taxes would be included in which section(s) of a PESTLE analysis? Political, Economic, Social, Financial and Legal 286. Applying EUC definition of a SME (200 employees / 30€million turnover) Medium size 287. Which primary activity would be used to describe assembly work? Operations 288. Which primary activity would be used to describe "channel management" work? Marketing and Sales 289. What statements are correct when considering the concept of globalization It is the opposite of protectionism It refers to the growing inter dependency between It is a trend away from distinct national economic units 290. Porter identified 4 elements (porters diamond) present to varying degrees in every country that form the basis of the national competitiveness. Which refers to the four elements 1. Factor conditions 2. Firm strategy, structure, and rivalry 3. Demand conditions 4. Related and supporting industries 291. Porter identified 4 elements (porters diamond) present to varying degrees in every country that form the basis of the national competitiveness. Which DOES NOT refer to the four elements free trade 292. The resource-based approach has been attributed to several scholars > which would be associated with the theory? Barney Penrose Wernerfelt 293. The resource-based approach has been attributed to several scholars > which would NOT be associated with the theory? Porter 294. of the top 100 TNCS, 58 belonged to 6 industries, select the industry NOT part of the six> banking 295. of the top 100 TNCS, 58 belonged to 6 industries> motor vehicles pharmaceuticals petroleum electrical and electronic equipment telecommunications 296. Consider Competitive strategy and strategic positioning. which are true about positioning and what it can be based on on serving most or all the needs of a particular group of custom on segmenting customers who are accessible in different ways on producing a subset og an industry's products / services (variety) 297. Consider Competitive strategy and strategic positioning. which is the least true about positioning and what it can be based on is choosing activities that are like rivals but perform better 298. In the PEST framework for environmental analysis what does E stand for Economic 299. analysing processes of change in the business environment involves conceptualising it as Dynamic 300. The performance of businesses in the private sector is conventionally measured on Profitability 301. what key word can be used to describe the basic economic problem that all societies face scarcity 302. What does the Term "third sector" refer to>? Voluntary sector 303. The idea that consumers oversee the economic system because their preferences drive business decisions about what to produce is called Consumer Sovereignty 304. A multinational corp. is defined as carrying out production in more than 1 country