Companies That Compete Internationally Can Pursue Competitive Advantage in World

question 51

Multiple Choice

Companies that compete internationally can pursue competitive advantage in world markets (or offset domestic disadvantages) by

• A)using a differentiation-based competitive strategy in those country markets with superior resources.
• B)choosing not to compete in countries with high tariffs and high taxes (which then have to be passed along to buyers in the form of higher prices), thus keeping costs and prices lower than rivals.
• C)using an export strategy to circumvent the risks of adverse exchange rate fluctuations.
• D)locating value chain activities in whatever nations prove most advantageous in a manner that uses location to lower costs or achieve greater product differentiation, allow for the transfer of competitively valuable competencies and capabilities from one country to another, and allow for cross-border coordination.
• E)employing a multidomestic strategy instead of a global strategy.

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Definitions:

Risk Premium

The return in excess of the risk-free rate of return that an investment is expected to yield, compensating investors for taking on additional risk.

Treasury Bills

Short-term government securities issued at a discount from the face value and pay no interest, maturing in one year or less.

Small-company Stocks

Equity investments in companies with smaller market capitalization, often characterized by higher volatility and potential for growth.

Efficient Market

A financial market theory suggesting that asset prices fully reflect all available information at any given time, ensuring that securities are appropriately priced and investors cannot consistently achieve higher-than-average returns.