The Drawbacks of a Localized Multidomestic Strategy Include

question 72

Multiple Choice

The drawbacks of a localized multidomestic strategy include

• A) hindering the use of cross-border coordination of a company's activities and increasing company vulnerability to adverse shifts in currency exchange rates.
• B) making it very difficult to take into account significant country-to-country differences in distribution channels and marketing methods.
• C) making it difficult and costly to be responsive to country-to-country differences in customer needs, buying habits, cultural traditions, and market conditions.
• D) hindering transfer of a company's competencies and resources across country boundaries and hindering the pursuit of a single, uniform competitive advantage in all country markets where a company operates.
• E) being unsuitable for competing in the markets of emerging countries and posing added difficulty in modifying a company's business model to compete on the basis of low price.

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Definitions:

Credit Risk

The risk of loss resulting from a borrower's failure to repay a loan or meet contractual obligations.

Compounded Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Annual Interest Rate

The percentage increase in money charged per year for the use of borrowed funds or for delaying the repayment of a debt.

Interest Rate

The cost of borrowing money or the reward for saving, usually expressed as a percentage of the principal amount per period.