A Multinational Enterprise (MNE)is Said to Be Pursuing a Multidomestic

question 26

Multiple Choice

A multinational enterprise (MNE) is said to be pursuing a multidomestic strategy when it

• A) is pursued in response to low pressure for local responsiveness and low pressure for cost reduction.
• B) attempts to reap significant economies of scale by pursuing a global division of labor based on wherever best-of-class capabilities reside at the lowest cost.
• C) attempts to maximize local responsiveness, hoping that the host country consumers will perceive it to be a local company.
• D) operates on the assumptions made in the globalization hypothesis in order to lower costs.

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Definitions:

Selling Price

The price at which a product or service is offered to consumers, determined by factors such as cost, market demand, and competition.

Markup Percentage

The percentage added to the cost price of goods to cover overhead and profit, determining the selling price.

Total Cost Concept

A management accounting concept that includes all direct costs, indirect costs, fixed, and variable costs associated with producing and selling a product.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much revenue contributes towards covering fixed costs and generating profit.