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Mgt 302 Exam 3
| Question | Answer |
|---|---|
| organizational architecture | a firms organization including formal structure, control systems, incentives, processes, culture and employees |
| What are the three conditions that must be fulfilled for superior enterprise profitability | 1. the elements of a firms organizational architecture must be internally consistent. 2.organizational architecture must match the strategy of firm 3. strategy and architecture must be consistent with each other and make sense with competitive environment |
| What are the three components of organizational structure | the formal division of the organization into subunits. The establishment of integrating mechanisms to coordinate the activity in the subunits. The location of decision making responsibilities in organization. |
| control systems | the metrics used to measure the performance of subunits and make judgements about how well managers are running those subunits. |
| incentives | devices used to reward appropriate employee/manager behavior |
| process | the manner in which decisions are made and work is performed in the organization |
| What is conceptually distinct from the location of decision-making responsibilities | processes |
| organizational culture | the norms and value systems at are shared among the employees of an organziation |
| people | the employees of the organization and the strategy used to recruit, compensate and retain those individuals and the type of people they are in terms of skills values and orientation |
| organization structure can be though of in terms of three dimensions. What are they | vertical, horizontal, and integrating mechanizms |
| vertical differentiation | the location of decision making repsonsibility within the structure |
| horizontal differention | the formal division of the organization into subunits. decision is normally made on basis of function, type of business or geographic area |
| integrating mechanizms | mechanisms for coordination subunits |
| Which strategy calls for centralizing some operating decisions | global standardization strategy. They must decide how to disperse the various value creation activities around the globe so location and experience economies can be realized |
| what strategy calls for decentralizing operating decisions | firms pursuing a localization strategy to give power to foreign subsidiaries |
| What strategy calls for centralizing core competencies and decentralizing other decisions to foreign subsidiaries. | firms pursuing an international strategy |
| What parts of the company are centralized and decentralized for the transnational strategy | centralize global production centers to experience location and experience curve economies. decentralizing many operating decisions, particularly marketing to foreign subsidiaries for local responsiveness. |
| what is the concept of global learning predicated upon | the notion that foreign subsidiaries have freedom to develop their own skills and competencies |
| What are some examples of processes | formulating strategy, deciding how to allocate resources, evaluating the performance of managers and giving feedback. |
| functional organizational structure | As a business grows from a single entrepreneur it is split into functions reflecting value creation activities such as purchasing, production, marketing, and finance. |
| product divisional organizational structure | when a company diversifies and outgrows a functional structure. each division is responsible for a distinct business area with its own functions. Operating decisions are decentralized to divisions |
| A firm's international division tends to be organized | geographically |
| Who is responsible for the overall strategic development and financial control of a firm under the product divisional structure | headquarters |
| international division | grouping all international activities by geography. functional structure replicates in every country, or product divisional organization replicates in every country. |
| What are the 4 types of control systems for multinational firms | personal controls, bureaucratic controls, output controls, and cultural controls |
| What is the ranking of need for coordination of subunits among the four strategies from lowest to highest | localization, international, global, transnational |
| performance ambiguity | exists when the causes of a subunits poor performance are not clear |
| What are the levels of performance ambiguity among the strategies from lowest to highest | localization, international, globalization, transnational |
| personal control | personal contact with subordinates |
| worldwide product division structure | adopted by reasonably diversified companies with product divisional domestic structures. Heaquarters maintains overall strategic development and financial control. each product division is responsible for value creation activities worldwide. |
| What are the benefits of the worldwide product division structure | enhances the consolidation of value creation activities at key locations. facilitates that transfer of core competencies within a divsions worldwide operations |
| global matrix structure | horizontal differentiation proceeds along two dimensions: product division and geographic area. dual responsibility shared by product division and various areas of the firm. product division and geographic area have equal status to reinforce this. |
| decreasing performance ambiguity through data collection increases costs of | control because it is expensive and time consuming and diverts attention away from other issues |
| worldwide area structure | favored by firms with low diversification and domestic structure based on functions. World is divided into geographic areas. Each area is autonomous with its own set of value creation activities. decentralized operations. |
| knowledge network | network for transmitting information within an organization that is based not on formal organizational structure but on informal contacts between managers within an enterprise. |
| output controls | setting goals for subunits to achieve and expressing those goals in terms of relatively objective performance metrics such as profitability, growth, market share, and quality |
| The structure a global standardization strategy would pursue would be | worldwide product division structure |
| organizations | societies of individuals who come together to perform collective tasks and have their own distinctive culture and subculture |
| What are the basic principles for successful organizational change? | 1. unfreeze the organization through shock therapy. 2. move the organization to a new state through proactive change in architecture. 3. refreeze the organization in its new state |
| bureaucratic control | control through a system of rules and procedures that directs the actions of subunits. most important are budgets and capital spending rules. |
| budget | set of rules for allocating a firms financial resources |
| cultural controls | when employees buy into the norms and value systems of the firm. relies on self control and reduces the need for other control systems |
| Two techniques used to establish a knowledge network are | management development policies and information systems |
| What are the two types of socialization | formal and informal |
| formal socialization | training programs that educate employees in the core values of company |
| informal socialization | friendly advice from peers and bosses |
| capital spending rules | headquarters approve capital spending requests that are congruent with firm objectives |
| arguments for centralization of decision making | facilitating coordination, making it easier for top-level managers to bring about change, eliminating duplication of activities, and making decisions consistent with objectives |
| mechanisms used to maintain culture | hiring practices, reward strategies, socialization process, communication strategy |
| benefits of decentralizaton of decision making | greater flexibility, better decisions being made, and increase in motivation. |
| What are three decisions firms must consider when looking at foreign expansion | when to enter markets, what markets to enter, and on what scale to enter markets |
| early entry | entering a foreign market before other firms |
| late entry | when other international businesses have already established themselves |
| timing of entry | When a business enters the foreign market. Can be late or early |
| first mover advantages | preempt rivals, create switching costs, build sales volume |
| joint venture | establishing a firm that is owned by two or more independent firms |
| What are the advantages of a joint venture | firm benefits from partner's knowledge. share development costs, local partners face low risk of government interference |
| What are disadvantages of a joint venture | giving up control of technology to a local partners and not having tight control over the local partner that it might need to realize experience curve or location economies |
| wholly owned subsidiary | firm owns 100 percent of the stock |
| what two ways can a wholly owned subsidiary be done in a foreign market | starts a new operation called a greenfield venture or acquire an established company |
| what are some advantages to wholly owned subsidiaries | Keep control over technology if that's company's competence. tight control over operations which is necessary for global strategic coordination). in order to realize location and experience curve economies |
| pioneering costs | costs that an early entrant has to bear that a later entrant can avoid. |
| How do pioneering costs happen | arise when the business system in a foreign country is so different from that in a firm's home market that the enterprise has to devote considerable effort, time, and expense to learning the rules of the game. |
| What are also pioneering costs | the costs of promoting and establishing a product offering, including the costs of educating customers. |
| Franchising | a specialize form of licensing where the franchiser sells intangible property (trademark) to the franchisee but insists that franchisee follow strict rules on how to do business. |
| What are some other qualities of franchising | longer-term commitment than licensing. Franchiser receives royalties. typically employed by service firms. |
| why do acquisitions fail | indadequate preacquisition screening, overpayment for assets of acquired firm, not realizing gains from combining operations, culture clash between acquiring and acquired firm. |
| hubris hypothesis | postulates that top managers typically overestimate their ability to create value from an acquisition primarily because rising to the top has given them an exaggerate sense of their own abilities. |
| when a company makes a commitment to enter a market on a large scale | the process usually takes place quickly |
| The disadvantages of a wholly owned subsidiary are | most costly entry mode and subject to full capital costs and risks |
| What is the major disadvantage of a strategic alliance | that it gives competitors a lowcost route to new technology and markets |
| benefits of franchising | relatively low costs because franchisee assumes those costs and risk. Able to build a global presence quickly |
| turnkey project | contractor agrees to handle every detail of the probject for a foreign client including training personnel |
| What are some disadvantages to licensing | doesn't have control over manufacturing marketing and strategy. Limits the ability to coordinate strategic moves across several countries. Can lose control over tech. |
| benefits of turnkey project | useful when entering markets where FDI is limited by host government, earn greater returns from valuable assets. Less risky than traditional FDI |
| advantages to acquisitions | less risk than greenfield venture, fast to execute, beat out competition |
| three ways to make alliances work | partner selection, alliance structure, manner in which alliance is managed |
| cross-licensing | a tool used to allow both parties to agree that certain coveted skills and technology will be swapped between the two companies |
| in order to maximize benefits of an alliance | building trust and learning from partners and being sensitive to cultural differences |
| which entry mode did many japanese automakers use to gain access to US markets | exporting |
| when selecting a good partner | gain public knowledge, conduct face to face meetings, check with informed third parties |
| What is the great promise of exporting | that large revenue and profit opportunities are to be found in foreign markets for most firms in most industries |
| What happens when a firm expands the size of its market through exporting | it enables a firm to achieve economies of scale thereby lowering unit costs |
| While large firms are proactive about seeing opportunities for profitable exporting, mediumsized and small firms wait until their domestic market is saturared and are | reactive |
| Another mistake that the small and medium sized firms do in regards to exporting is they | wait for the world to come to them rather than going into the world to seek opportunities |
| common pitfalls of exporting are | poor market analysis, poor understanding of competitive conditions in the foreign market, a failure to customize the product offering to the needs of foreign customers, a lack of an effective distribution program,poor promotions and financing problems. |
| Novice exporters understimate this | the time and expertise needed to cultivate business in foreign countries. |
| what might an exporter have to do before starting foreign exports | have face to face negotiations on customer's home turf. May have to spend months learning about country's trad regulations, business practices, and more before deal can be closed. |
| What does FCX systems in China suggest about foreign exporting | may take years before foreigners are comfortable enough to purchase in significant quantities |
| What is one of the biggest impediments to exporting | lack of knowledge of the opportunities available |
| What does Germany have that makes it one of the world's most successful exporting nations | trade associations, government agencies, and commercial banks gathering information to help small firms identify exporting opportunities |
| What is a similar function to Germany that Japan has for its businesses that want to export | Japanese Mininistry of International Trade (MITI) which is always on the lookout for export opprtunities. In additions most firms are affiliated with sogo shosha which is the great trading houses. Have offices all over the world that seek opportunities |
| Why doesn't the US have the same resources that Germany and Japan does for exporting companies | had mostly a self-contained continental economy where international trade played a minor role. |
| What is the most comprehensive source of information for US exporters | US department of commerce |
| What is the best prospects list that the US department of commerce provides to exporters | a list of names and addresses of potential distributors in foreign markets along with the businesses they are in, the products they handle, and their contact person |
| What is the comparison shopping service the US DOC offers for 14 countries that are major exporters of US products | A custom market survey for a small fee that includes information on marketability, the competition, comparative prices, distribution channels, and names of potential sales reps. |
| export management company (EMC) | export specialists that act as the export marketing department or international department for their client firms |
| what are the two types of exports assignments that EMC's normally accepts | Either start exporting operations for a firm with understanding that firm will take over operations when its established, or they will start services with understanding that EMC will have responsibility for selling the products |
| What is the advantage of an EMC | to help a new exporter identify opportunities and avoid pitfalls |
| What are the qualities of a good EMC | have a network of contacts in potential markets, have multilingual employees, have a good knowledge of different business mores, and be fully conversant with the ins and outs of the exporting process and with local business regulations. |
| What is a drawback of relying on an EMC | a company can fail to develop its own exporting capabilities |
| What are the strategic steps for successful exporting | hire an EMC. focus on one market. enter on a small scale. recognize time and commitment and hire more people. build strong relationships in the country. hire local personnel. seek export opportunities. |
| What is a problem that is particularly acute in international trade | lack of trust that exists when one must put faith in a stranger. |
| What are the devices that have evolved to help with lack of trust in international trade | letter of credit, the draft (or bill of exchange), the the bill of lading. |
| letter of credit | states that the bank will pay a specified sum of money to a beneficiary, normally the exporter on presentation of particular specified documents |
| How does an importer obtain a letter of credit | applies to local bank of the issuance of the letter of credit. Bank does a credit check and issues letter if satisfied with credit worthiness. |
| What are some other things a bank might require before issuing letter of credit | a cash deposit or some form of collateral. An importer fee between .5 and 2 percent of the value of the letter of credit depending on credit worthiness and size of transaction |
| How does the exporter get their money with the letter of credit | Importer bank sends letter of credit to exporter's bank. After the exporter has shipped merchandise according to directions he draws a draft and attaches required docs and presents to his bank for payment. |
| What is the great advantage of the letter of credit | Both importer and exporter will trust a reputable bank even if they do not trust each other |
| What are the advantages for the exporter with a letter of credit | Is guaranteed payment for merchandise, can facilitate pre-import financing. |
| What are the advantages for the importer with a letter of credit | doesn't have to pay back until documents have arrives and all conditions in letter have been satisfied. |
| What is the drawback for the importer with a letter of credit | the fee that they must pay to the bank for the letter of credit. The letter of credit is also a financial liability which may reduce their ability to borrow funds for other purposes |
| bill of exchange (also known as a draft) | the instrument normally used in international commerce to effect payment. It is an order written by an exporter instructing an importer or importer's agent to pay a specified amount of money at a specified time |
| sight draft | payable on presentation to the drawee |
| time draft | allows for a delay in payment - normally 30, 60, 90, or 120 days. |
| bankers acceptance | a time draft drawn on and accepted by a bank. Bank promises to pay within time specified |
| trade acceptance | a time draft drawn on and accepted by a business. Business promises to pay within time specified |
| Why is a time draft a negotiable intrument | once the draft is stamped with an acceptance the maker can sell the draft to an investor at a discount from its face value |
| bill of lading | issued to the exporter by the common carrier transporting the merchandise |
| What are the purposes of the bill of lading | serves as a receipt, a contract, and a document of title |
| bill of lading as receipt | indicates carrier has received the merchandise describe on the face of the document |
| bill of lading as contract | it specifies that the carrier is obligated to provide transportation service in return for a certain charge |
| bill of lading as document of title | used to obtain payment or a written promise of payment before merchandise is released to the importer. |
| What are two ways that US exporters can finance their export programs | financing aid from Export-Import bank, or export credit insurance from Foreign Credit Insurance Association |
| Export-Import Bank | independent agency of the US government. provides financing aid that will facilitate exports, imports, and the exchange of commodities |
| How does Export-Import bank pursue its mission | with various loan and loan guarantee programs. Guarantees repayment of medium and long-term loans US commercial banks make to foreign borrowers for purchase US goods. |
| What is another service the Export-Import banks has | a direct lending program where it lends foreign borrowers for use in purchasing exports. In some cases it grants loans that commercial banks would not if it sees a potential benefit to the United States. |
| Export Credit Insurance | insurance for exporter if a letter of credit is not in place due to possiblity of losing an order to an exporter that doesn't require one. |
| countertrade | a range of barter-like agreements. trading goods and services for other goods and services when they can't be traded for money. |
| When did countertrade arise in the modern era | in the 1960's when the soviet union and the communist states of eastern europe wanted to purchase imports |
| When did countertrade grow in popularity | in the 1980's the technique grew in popularity among many developing nations that lacked foreign exchange reserves required to purchase imports |
| Why did countertrade increase after 1997 | The asian financial crisis left many asian nations with little hard currency to finance international trade |
| Barter | direct exchange of goods and/or services between two parties without a cash transaction |
| Why is barter uncommon as a form of countertrade | 1. if goods not exchange simultaneously one party ends up financing the other for a period. 2. firms engage in barter run risk of having to accept goods they don't want, can't use, or have difficulty reselling at a reasonable price. |
| counterpurchase | a reciprocal buying agreement. occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made. China buys stuff from us in dollars, we agree to buy some chinese textiles with proceeds. |
| offset | similar to counterpurchase as one firm agrees to purchase goods and services with percentage of proceeds. difference is that party can fulfill the obligation with any firm in the country to which the sale is being made. More flexibility |
| switchtrading | use of a specialized third-party trading house in a countertrade agreement. third party trading house buys the firms counterpurchase credits and sells them to another firm that can better use them. |
| buyback | occurs when a firm builds a plant in a country, or supplies technology, equipment, training, or other services to the country, and agrees to take a certain percentage of the plants output as partial payment for the contract |
| Pros of countertrade | gives a firm a way to finance an export deal when other means are unavailable. May be required by the government of that country. |
| drawbacks of countertrade | not getting hard currency, may involve exchange of unusable or poor quality goods that firm can't use. may not be able to dispose of goods profitablity |
| who are the masters of countertrade | the Japanese sogo shosha trading houses |
| What large US firm has established its own trading firm | 3M called 3M global trading |
| when an importer is in a strong bargaining position and able to play competing suppliers against each other... | an exporter may have to forego a letter of credit |
| Factors that lead to a lack of trust in an export transaction are | distance between the two parties and problems enforcing contractual obligations |
| In the US export credit insurance is provided by | Foreign Credit Insurance Association (FCIA) |
| What does the FCIA provide | coverage against commercial risks and political risks. Losses due to commercial risk result from buyers insolvency. Losses from political risk are not the fault of either buyer or seller. |
| What is another government agency that can help potential exporters | small business administration |
| What program does the SBA use to oversee some 11500 volunteers with international trade experience to provide one on one counseling to new exporter businesses | Service Corps of Retired Executives (SCORE) |
| What is another service the SBA also coordinates | The Export Legal Assistance Network (ELAN) |
| What is the Export Legal Assistance Network | a nationwide group of international trade attorneys who provide free legal consultations to small businesses on export-related matters. |
| What are two organizations within the US DOC that provide businesses with intelligence and assistance for attacking foreign markets | the international trade administration and the US Commercial services. |
| production | the activities involved in creating a product |
| What can be used to lower the costs of value creation and add value by better serving customer needs | production and logistics - 2 parts of the value chain |
| logistics | the activity that controls the transmission of physical materials through the value chain, from procurement through production and into distribution |
| Why are production and logistics closely linked | because a firm's ability to perform its production activities efficiently depends on a timely supply of high quality material inputs for which logistics is responsible. |
| What are the strategic objectives of logistics and production | to lower costs and to increase product quality by eliminating defective products from the supply chain and manufacturing process. |
| How can costs be lowered in logistics and production | dispersing production activities to various locations around the globe where the functions can be done efficiently, managing the global supply chain efficiently to better match supply and demand. |
| What is the benefit of efficient supply chain management? | It reduces the amount of inventory in the system and increases inventory turnover which means the firm has to invest less working capital in inventory and is less likely to find excessive inventory on hand |
| six sigma | a statistics based philosophy that aims to reduce defects, boost productivity, eliminate waste, and cut costs. |
| Who has adopted six sigma programs | motorola, general electric, honeywell |
| What is the meaning of the sigma in six sigma | a sigma is a standard deviation. The more sigmas, the small number of errors. |
| How many errors are at six sigma | 3.4 defects per million units or 99.99966 percent accurate |
| ISO 9000 | A quality standard for manufacturing processes that is required by the EU |
| What are the three groups of factors a firm must consider for international production | country factors, technological factors, and product factors |
| Where should a firm locate its various manufacturing activities | where the economic, political, and cultural conditions including relative factor costs are conducive to the performance of those activities. This strategy is also know as location economies |
| What are the three characteristics of a manufacturing technology that determines location decisions | the level of fixed costs, the minimum efficient scale, and the flexibilty of the technology |
| How do fixed costs affect manufacturing | high fixed costs force company to serve world market from single location and low fixed costs make it economical to perform an activitiy in several locations at once |
| minimum efficient scale of output | the level of output at which most plant-level scale economies are exhausted. It is the scale of output a plant must operate to realize all plant-level scale economies |
| flexible manufacturing technology (lean production) | covers a range of manufacturing technologies designed to reduce set up times for complex equipment, increas utilization of individual machines through better scheduling, and improve quality control at all states of the manufacturing process |
| mass customization | the ability of companies to use flexible manufacturing technology to reconcile two goals that were once incompatible - low cost and product customization |
| What is one of the most famous examples of flexible manufacturing technology | Toyota's production system |
| Who developed Toyota's flexible manufacturing system | Taiichi Ohno |
| flexible machine cells | a grouping of various types of machinery, a common materials handler, and a centralized cell controller (computer) |
| What is the function of a typical machine cell | dedicated to the production of a family of parts or products |
| What are the major effiency benefits of flexible machine cells | improved capacity utilization and reductions in work in progress and in waste |
| What are making it feasible and necessary for firms to concentrate manufacturing facilities at optimal locations | flexible manufacturing technology |
| when does spreading manufacturing capabilities make the most sense | when minimum efficient scale is low, flexible manufacturing tech is low, and increase local responsiveness more than offsets the cost disadvantages |
| What are two product features that affect location decisions | value to weight ratio and whether the product serves universal needs |
| Concentration of production makes most sense when | differences in factor costs, political economy and culture have impact on costs of manufacturing, low trade barriers, externalities of like enterprises, stable exchange rates, high fixed costs , value to weight is high, product serves universal needs |
| decentralization of production makes most sense when | differences in factor costs, politics, and culture don't have impact on costs of manufacture, trade barriers are high. volatile exchange rates, low fixed costs and minimum efficient scale, low value to weight ratio, does not serve universal needs |
| specialized asset | one whose value is contingent on a particular relationship persisting. It uses equipment that can be use only for one purpose |
| global learning | the idea that valuable knowledge does not reside just in a firm's domestic operations. it may also be found in its foreign subsidiaries |
| What are the arguments to make all or part of a product in house | lower costs, facilitate investments in highly specialized assets, protect product technology, engalbe the firm to assumulate valuable skills and capabilities, and ease the scheduling of adjacent processes |
| What are some arguments for buying component parts or an entire product from a supplier | greater flexibility, drive down firm's cost structure, may help firm capture orders from international customers |
| dynamic capablities | describes skills that become more valuable over time through learning |
| marketing mix | set of choices the firm offers to its targeted markets |
| market segmentation | refers to identifying distinct groups of consumers whose purchasing behavior differs from others in important ways |
| what can be defined as a bundle of attributes | a product. a hotel has atmosphere, quality, comfort, service. a hamburger has taste, texture, size |
| What are some cultural dimensions in which countries differ | social structure, language, religion, tradition, education |
| What is the most important cultural dimension in which countries differ | tradition |
| In what area is tradition most important | in foodstuffs and beverages |
| What can rule out mass production and marketing of standardized product | differing government-mandated product standards |
| Why does differences in technological standard constrain globalization of markets | because what works in one country may not work in others due to differing standards |
| distribution strategy | the means it chooses for delivering the product to the customer |
| What is a typical distribution system | consists of a channel that includes a wholesale distributor and a retailer. A firm can decide to sell directly to the customer, the wholesaler, or the retailer. |
| concentrated retailing system | a few retailers supply the market |
| fragmented retailing system | there are many retailers none of which has a major share of the market |
| Which country has a legal system that protects small retailers | Japan |
| channel length | refers to the number of intemediaries between the producer and the consumer |
| which retailing system has a longer channel length | fragmented |
| exclusive distribution channel | one that is difficult for outsiders to access. |
| channel quality | the expertise, competencies, and skills of established retailers in a nation and their ability to sell and support the products of international business |
| communication strategy | communicating the attributes of the product to the prospective customer |
| communication channels include | direct selling, sales promotion, direct marketing, and advertising |
| What is a firms communication channel partly defined by | it's choice of distribution channel |
| source effects | occur when the receiver of a message evaluates the message on the basis of status or image of the sender |
| country of origin effects | the extent to which the place of manufacture influences product evaluations |
| noise | the amount of other messages competing for a potential consumer's attention |
| push strategy | emphasizes personal selling rather than mass media advertising in the promotional mix |
| pull strategy | emphasizes mass media advertising to communicate marketing messages |
| Push strategies tend to be emphasized for | industrial products or complex new products, when distribution channels are short, or when few print or electronic media are available |
| pull strategies tend to be emphasized for | consumers goodsd, when distribution channels are long, when sufficient print and electronic media sources are available to carry marketing message |
| price discrimination | exists whenever consumers in different countries are charged different prices for the same product or for slightly different variations of the product. involves charging whatever the market will bear |
| strategic pricing | predatory pricing, multipoint pricing, and experience curve pricing. Both predatory and experience curve pricing may violate antidumping laws. |
| predatory pricing | the use of price as a competitive weapon to drive weaker competitors out of a national market. Once competitor leaves market, the company can raise prices again |
| multipoint pricing | when one firm's pricing strategy in one market may have an impact on its rivals pricing strategy in another market. |
| experience curve pricing | firm will price product low on a global scale even if it means taking a loss because it might build global sales. Believes in several years when firm has moved down the experience curve it will make substantial profits and have a price advantage |
| a firm's freedom to set its own prices is constrained by | antidumping regulations and competition policy |
| What do antidumping rules do | sets a floor under export prices and limit firms ability to pursue strategic pricing |
| price elasticity of deman | measure of the responsiveness of demand for a product to change in price |
| price elaticity | when a small change in price produces a large change in demand |
| price inelastic | when a large change in price only produces a small change in demand |
| In which price elasticity of demand can countries charge a higher price | when demand is inelastic |
| What is the support for global standardized advertising | has significant economic advantages, where creative talent is scarce, one large effort will produce better results than 40 small ones. many brand names are global and recognized |
| what are arguments against global standardized advertising | cultural differences among nations are such that a message that works in one country can fail miserable in another. Advertising regulations may blaock implementation of standard advertising |
| What limits a firm's pull strategy in some countries | the availability of mass media. Media availability is limited by law in some cases especially in the case of tobacco and alcohol and pharmeceutical firms |
| What is the best way for a firm to overcome cultural barriers | to develop cross-cultural literacy, use local input, use a local sales force, |
| what is some benefits of using a longer distribution channel | it cuts selling costs when retailing is fragmented, market access - the ability to enter an exclusive channel. Import agents may have longterm relationships with wholesalers, distribs, and retail. |
| international communication | when a firm uses a marketing message to sell its products in another country |
| four elements that make up a firm's marketing mix | distribution strategy, pricing strategy, communication strategy, and product attributes |
| What is a factor that is shortening channel length in some countries | the entry of large discount superstores such as walmart |
| What is the business model of these large discount retailers | to cut out wholesalers and deal directly with manufacturers |
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