A "Think Global,act Global" Approach to Strategy-Making Is Preferable to a "Think

question 42

Multiple Choice

A "think global,act global" approach to strategy-making is preferable to a "think local,act local" approach when:

• A) a big majority of the company's rivals are pursuing localized multidomestic strategies.
• B) country-to-country differences are small enough to be accommodated with the framework of a mostly uniform global strategy.
• C) plants need to be scattered across many countries to avoid high shipping costs.
• D) market growth rates vary considerably from country to country.
• E) host governments enact regulations requiring that products sold locally meet strict manufacturing specifications or performance standards.

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Definitions:

Return On Investment

A measure of the profitability of an investment, calculated as the net profit from the investment divided by the cost of the investment.

Residual Income

The amount of income that an individual or business has after all personal debts and expenses, including the cost capital, have been paid.

Financial Performance

An indicator of how well an entity can use assets from its primary mode of business and generate revenues.

Residual Income

A measure of performance that calculates the income an investment generates above the minimum required return.