Two Major Drawbacks of a Think Local,act Local Multidomestic Strategy

question 30

Multiple Choice

Two major drawbacks of a think local,act local multidomestic strategy are

• A)that it is especially vulnerable to fluctuating exchange rates and can usually be defeated by companies employing cross-market subsidization tactics.
• B)excessive vulnerability to fluctuating exchange rates and having to craft a separate strategy for each country market in which the company competes.
• C)hindering a company's transfer of competencies and resources across country boundaries (since somewhat different competencies and capabilities are likely to be employed in different host countries)and not promoting the building of a single,unified competitive advantage in all country markets where a company competes.
• D)greater exposure to both increases in tariffs and restrictive trade barriers,and added difficulty in accommodating the diverse trade restrictions and regulatory requirements of host governments.
• E)not being able to export products manufactured in one country to markets in other countries and being largely unsuitable for competing in the markets of emerging countries.

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Definitions:

Externalities

Effects of a production or consumption decision on third parties not directly involved in the transaction, which can be positive or negative.

Home Landscaping

The practice of altering the visible features of an area of land surrounding a home to enhance its appearance or functionality.

Price

The amount of money required to purchase a good or service.

Positive Externality

A benefit that is enjoyed by a third-party as a result of an economic transaction, without them necessarily being involved in the transaction.