Answer of Multiple Choice Questions 1. (D) 2. (D) 3. (D) 4. (D) 5. (B) 6. (C) 7. (B) 8 (B) 9 (D) 10 (B)

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1 1. Outsourcing technically means: A. moving functions or activities out of an organizations B. the delegation of non-core operations from internal production to an external entity specializing in the management of that operation C. buying resources from outside a company's main domestic market D. A or B 2. Outsourcing is used by an organization in the interest of: A. making more efficient use of worldwide labor, capital, technology and resources B. lowering firm costs or to make more efficient use of worldwide labor, capital, technology and resources C. redirecting or conserving energy directed at the competencies of a particular business D. any of the above 3. Under conditions of globalization, outsourcing and offshoring are not mutually exclusive, however, outsourcing differs from offshoring in that: A. outsourcing is relative to the nation while offshoring is relative to the restructuring of the firm B. offshoring represents a relocation of an organizational function to a foreign country, not necessarily a transformation of internal organizational control, while outsourcing means sharing organizational control with another organization, or a process of establishing network relations within an organizational field C. outsourcing is relative to the restructuring of the firm while offshoring is relative to the nation D. B and C 4. 'Developing countries' such as China or India benefit from the patronage of companies that outsource to them in terms of: A. increased wages B. job prestige and education C. increased quality of life D. all the above 5. According to the case study information, in which three international distinct but integrated segments does Ralph Lauren operate? A. wholesale, joint-venture and exporting B. wholesale, retail and licensing C. Internet retailing, licensing and exporting D. Internet retailing, indirect exporting and strategic alliances 6. One criticism of outsourcing is that: A. there are delays in meeting the demand B. the interaction bears no flexibility C. product quality suffers D. the price paid by the customer is very high 7. American giants such as: IBM, Gillette, Dow Chemical, Hewlett-Packard and Xerox get the majority of their sales from: A. from Asia B. outside the US C. within the US D. from each other's customers 8. Strategic alliances are: A. not at all favored by SMEs as they are perceived to be too risky B. one of the many ways in which firms may enter foreign markets C. the most common market entry mode used by known multinationals D. more successful than other market entry modes

2 9. Adidas is an example of a: A. diversified multinational corporation B. horizontally integrated multinational corporation C. diagonally integrated multinational corporation D. vertically integrated multinational corporation 10. McDonald's is an example of a: A. vertically integrated multinational corporation B. horizontally integrated multinational corporation C. diagonally integrated multinational corporation D. diversified multinational corporation 1. (D) 2. (D) 3. (D) 4. (D) 5. (B) 6. (C) 7. (B) 8 (B) 9 (D) 10 (B) 1. Microsoft is an example of a: A. vertically integrated multinational corporation B. horizontally integrated multinational corporation C. diversified multinational corporation D. diagonally integrated multinational corporation 2. Which of the following are core competitive strengths of LM Glasfiber? A. leading technology and know-how B. customized product offerings and supply system C. global capacity and supply chain as well as economies of scale D. all the above 3. One of LM Glasfiber's main competitive strengths lies in the global capacity and supply chain. In this respect, the global player has: A. 2 locations in key markets B. 10 locations in 8 countries C. over 150 locations across the globe D. one key location in Denmark, from which all the products are exported to the key markets 4. In South East Asia Polo Ralph Lauren adopted a of entry instead of licensing. A. piggybacking mode B. an exporting mode C. joint venture method D. hierarchical mode 5. Outsourcing on the American continents is supported by, in that there are provision with reference to workers from low-labor cost countries, such as Mexico, working in the US or Canada. A. NATFA B. MERCOSUR C. OECD D. G8 6. Which two of the following are examples of Porters Five Forces analysis suggesting that the firm must position itself to operate in a more difficult trading environment? A. More substitutes to the firm s products are available to consumers after technological change. B. Significant barriers to entry exist. C. Few substitutes to the firm s products are available to consumers. D. Suppliers of the firm s raw materials and components operate in a competitive market. E. Buyers of a firm s products combine to be better able to bargain for larger discounts from the firm.

3 7. The Boston matrix essentially supports: A. a concentration on question marks. B. an unbalanced portfolio of products. C. process specialisation. D. a balanced portfolio of products. 8. Brand extension strategies are often used to delay the onset of the: A. Cash Cow phase of the Boston matrix. B. introduction phase of the product life cycle. C. decline phase of the product life cycle. D. growth phase of the product life cycle. 9. Under which of the following circumstances is the firm most likely to consider a price cutting strategy? A. Relatively inelastic demand. B. Perfectly inelastic demand. C. Other firms raising their prices. D. Relatively elastic demand. 10. Which three of the following strategies were identified by Porter as generic strategies open to firms? A. Cheap and Cheerful strategy. B. Price discrimination strategy. C. Focus strategy. D. Product differentiation strategy. 1. (C) 2. (D) 3. (B) 4. (D) 5. (A) 6. (A) 7. (D) 8 (C) 9 (D) 10 (C) 1. Which one of the following international strategies involves an MNE in responding to high cost pressures and high local responsiveness pressures in a way which often involves a more geographically dispersed value chain? A. Transnational. B. International. C. Multi domestic. D. Global. 2. Which one of the following international strategies involves an MNE in responding to high cost pressures and low local responsiveness pressures so that core competencies remain centralised and a standardised product is sold worldwide? A. Global. B. Transnational. C. Multi domestic. D. International. 3. Here you ll see a description of a particular strategy and a list of Porter s five forces. Try to match the description with its correct term. Price warfare breaks out as competing firms try to protect their established market shares. A. High degree of competitive rivalry in industry. B. Low degree of competitive rivalry in industry. C. Threat of potential entrants increases. D. Power of buyers increases. 4. Price elasticity of demand is high for this industry s products since consumers can readily switch to alternatives. A. Low degree of competitive rivalry in industry. B. Threat of substitutes is significant.

4 C. Threat of potential entrants increases. D. Power of buyers increases. 5. There are few economies of scale and there has been little branding by incumbent firms. A. Power of sellers increases. B. Power of buyers increases. C. Threat of substitutes is significant. D. Low degree of competitive rivalry in industry. 6. Retail and wholesale outlets combine together to force manufacturers of toys and games to offer bigger discounts for displaying their products. A. High degree of competitive rivalry in industry. B. Low degree of competitive rivalry in industry. C. Power of buyers increases. D. Threat of potential entrants increases. 7. The few large producers in the industry form a price-fixing agreement and issue quotas to their members. A. Power of buyers increases. B. Low degree of competitive rivalry in industry. C. Power of sellers increases. D. Threat of substitutes is significant. 8. The internationalization of a retail concept may occur: A. without an international organization directly transferring a concept through a physical presence in a market. B. only when an international organization directly transfers a concept through a physical presence in a market. C. when an international organization directly transfers a concept through a physical presence or agent in a market. D. when an international organization directly transfers a concept through export activity. 9. Which of the following is correct? International retailing is the meeting of consumers' needs in international markets by: A. domestic retailers adopting a concept. B. export agents in international markets. C. international retail organizations. D. wholesalers in international markets. 10. International activity is: A. servicing customers in nondomestic markets. B. resource-seeking in international markets. C. foreign sourcing and importing. D. servicing customers' need for international merchandise. 1. (A) 2. (A) 3. (A) 4. (B) 5. (C) 6. (C) 7. (B) 8 (A) 9 (C) 10 (A) 1. International retailing is: A. the export of retail concepts to markets that are different from each other in their regulation, economic development, social conditions, cultural environment, and retail structures. B. the management of retail operations in markets that are different from each other in their regulation, economic development, social conditions, cultural environment, and retail structures. C. the introduction of retail operational formats in markets that are different from each other in their regulation, economic development, social conditions, cultural environment, and retail structures.

5 D. the management of wholesale operations in markets that are different from each other in their regulation, economic development, social conditions, cultural environment, and retail structures. 2. The internationalization of retailing is: A. only the transfer of retail management technology that bring to a retail organization a level of international integration that establishes the retailer within the international environment in such a way as to transcend regulatory, economic, social, cultural, and retail structural boundaries. B. the transfer of retail management technology or the establishment of international trading relationships that bring to a retail organization a level of international integration that establishes the retailer within the international environment in such a way as to transcend regulatory, economic, social, cultural, and retail structural boundaries. C. only the establishment of international trading relationships that bring to a retail organization a level of international integration that establishes the retailer within the international environment in such a way as to transcend regulatory, economic, social, cultural, and retail structural boundaries. D. neither the transfer of retail management technology or the establishment of international trading relationships that bring to a retail organization a level of international integration that establishes the retailer within the international environment in such a way as to transcend regulatory, economic, social, cultural, and retail structural boundaries. 3. David Ricardo recognized that there were advantages in specialization: A. only when absolute advantage did not exist. B. when comparative advantage did not exist. C. only when comparative advantage did not exist. D. even when absolute advantage did not exist. 4. Which of the following is correct? Linder (1961) identified a fundamental difference in the trade of: A. Primary and service sector products B. Retail and manufactured products C. Primary and manufactured products D. Primary and retail products 5. Vernon (1966) identified the importance of: A. the market of origin in determining the characteristics of the product. B. the market of destination in determining the characteristics of the product. C. the host market in determining the characteristics of the product. D. the global marketplace in determining the characteristics of the product. 6. The eclectic paradigm proposes that international production is contingent on three sets of advantages: A. Marketing Advantages, Management Advantages, and Internalization Advantages B. Ownership Advantages, Locational Advantages, and Internalization Advantages C. Ownership Advantages, Locational Advantages, and Internationalization Advantages D. Retailing Advantages, Locational Advantages, and Internalization Advantages 7. The stages theory of the firm is sometimes known as: A. The Linder Model B. The Uppsala Model C. The New York Model D. The Dunning Model 8. How many categories of international retailers did Hollander (1970) suggest? A. Four B. Five C. Six D. Seven 9. Treadgold observed (1988) that:

6 A. high cost entry strategies allow retailers to retain high control over their non-domestic operation while low cost entry strategies will demand the loss of some control. B. low cost entry strategies allow retailers to retain high control over their non-domestic operation while high cost entry strategies will demand the loss of some control. C. high cost entry strategies allow retailers to retain a medium level of control over their non-domestic operation while low cost entry strategies will demand the loss of all control. D. high cost entry strategies allow retailers to retain low control over their non-domestic operation while low cost entry strategies will allow the retention of high control. 10. What were the three fundamental strategies identified by Salmon and Tordjman (1989)? A. Global, multinational, and transnational B. Global, multinational, and investment C. Global, proximate, and multinational D. Acquired, global and multinational 1. (B) 2. (B) 3. (D) 4. (C) 5. (A) 6. (B) 7. (B) 8 (B) 9 (A) 10 (B) 1. Simpson and Thorpe's (1995) PLIN model referred to four factors. What were they? A. Product, Lifestyle, Image, and Niche B. Product, Language, Internationalization, and Niche C. Product, Language, Internalization, and Niche D. Product, Language, Image, and Niche 2. What are the five factors identified by Vida, Reardon, and Fairhurst (2000) that they suggest act as determinants of international retail involvement? A. Competitive advantages, international knowledge, experience in the domestic market, management attitudes, retailer size B. Competitive advantages, internal knowledge, international experience, management attitudes, retailer size C. Competitive advantages, international knowledge, international experience, marketing attitudes, retailer size D. Competitive advantages, international knowledge, international experience, management attitudes, retailer size 3. The Q ratio shows the relationship between capitalization and asset value. Therefore, if a company scores above one or, to express it another way, parity, it has managed to: A. generate intangible value such as brand value, which means the retailer is worth, or capitalization is considered to be, more than its simple stock of tangible assets. B. generate tangible value such as brand value, which means the retailer is worth, or capitalization is considered to be, more than its simple stock of tangible assets. C. generate intangible value which means that the retailer is worth more than the stock of its intangible assets. D. generate intangible value which means that the retailer is worth less than the stock of its intangible assets. 4. Toys R Us and Ikea are examples of which of the following? A. Department store B. Variety store C. Category killer D. Supermarket 5. Walmart operates four formats. These are: A. Walmart discount stores, Walmart department stores, Walmart neighbourhood markets and Sam's Club B. Walmart variety stores, Walmart supercentres, Walmart neighbourhood markets and Sam's Club C. Walmart discount stores, Walmart supercentres, Walmart neighbourhood markets and Sam's Club

7 D. Walmart discount stores, Walmart supercentres, Walmart neighbourhood markets and Tom's Club 6. International food retailing is essentially a phenomenon that has emerged from: A. The US market B. European markets C. South America D. Asia 7. As we move in to the future, big box retailers will be better placed to compete in: A. emerging markets and depend on their brand strength as they compete head on with other retailers in their shared retail environment. B. more developed markets and depend on their brand strength as they compete head on with other retailers in their shared retail environment. C. emerging markets and depend on distribution efficiencies and location to ensure primary market impact. D. only developed markets and depend on their brand strength as they compete head on with other retailers in their shared retail environment. 8. When retailers move into neighbouring markets it is described as: A. Border removing B. Border leaping C. Border straddling D. Border hopping 9. Burt (1993) suggested that cultural proximity: A. discouraged expansion from one market to another. B. encouraged expansion from one market to another. C. was only relevant at later stages in a company's international development. D. was unimportant. 10. Economically, market attraction occurs where: A. either by a relatively high level of development or by a relatively low level of growth when measured against the domestic market. B. only by a relatively high level of development when measured against the domestic market. C. only by a relatively low level of growth when measured against the domestic market. D. Only where a market has a relatively high level of development and a relatively high level of growth when measured against the domestic market. 1. (A) 2. (D) 3. (A) 4. (C) 5. (C) 6. (B) 7. (C) 8 (D) 9 (B) 10 (A) 1. Thinking about retail structure, which would you expect? A. Retailers from both countries to be as successful as each other. B. Canadian retailers to me more successful than US retailers when moving across the Canadian/US border. C. US retailers to me less successful than Canadian retailers when moving across the Canadian/US border. D. Canadian retailers to me less successful than US retailers when moving across the Canadian/US border. 2. Where a number of markets exchange retail operations and a single market does not dominate the internationalisation process, the outcome is called: A. Bilateral integration B. Unbalanced integration C. Multifaceted integration D. Multilateral integration 3. The global political structure may be considered on how many levels:

8 A. Two B. Three C. Four D. Five 4. Recent research by Myers and Alexander (2007) has suggested that the emergence of a European retail structure is based around which EU markets? A. France and Germany B. France and Italy C. Germany and Italy D. The Netherlands and the UK 5. NAFTA stands for: A. North American Free Trade Area B. North American Free Tariff Area C. North American Free Trade Association D. New American Free Trade Area 6. On the basis of current population projections, if international retailers were to limit themselves to those markets that they primarily targeted in the fifty years , in the following fifty years ; would they be serving? A. A moderately increasing proportion of the world population B. Roughly the same proportion of the world population C. A declining proportion of the world population D. A rapidly expanding proportion of the world population 7.. Which of these statements is correct? A. In markets where there is a high GDP per capita figure, service industries make a far less significant contribution to GDP calculations than in markets with a low GDP per capita figure. B. In markets where there is a low GDP per capita figure, service industries make a far more significant contribution to GDP calculations than in markets with a high GDP per capita figure. C. In markets where there is a high GDP per capita figure, service industries make a far more significant contribution to GDP calculations than in markets with a low GDP per capita figure. D. In markets where there is a high GDP per capita figure, service industries tend to make either a high of low contribution to GDP calculations depending on the geographical size of the market. 8. Which of the following does modern retailing support? A. A rural environment B. An urbanized environment C. Markets with low levels of urbanization D. Neither urban or rural 9. In developed markets you would expect to find: A. the population under 15 years representing a large percentage of those aged 60 years or over. B. the population under 15 years representing a small percentage of those aged 60 years or over. C. the population under 15 years representing the same percentage of those aged 60 years or over. D. the population under 15 years representing a very large percentage of those aged 60 years or over. 10. Compared with markets in Southern Europe, household sizes in markets in North West Europe are? A. Small and the number of rooms per person is higher B. Large and the number of rooms per person is higher C. Large and the number of rooms per person is lower D. Small and the number of rooms per person is lower

9 1. (D) 2. (D) 3. (B) 4. (A) 5. (A) 6. (C) 7. (C) 8 (B) 9 (B) 10 (A) 1. Which of these statements is correct? A. A high number of inhabitants per retail outlet suggests a market with a undeveloped retail structure. B. A low number of inhabitants per retail outlet suggests a market with a developed retail structure. C. A high number of inhabitants per retail outlet suggests a market with a developed retail structure. D. A high number of inhabitants per retail outlet suggests a market with a retail structure that lacks modern retail operations. 2. Concentration calculations measure: A. the number of outlets one retailer has in a market. B. the number of retail businesses in a market. C. the share of a market held by one retailer or a group of retail enterprises. D. the number of consumers per retail outlet. 3. Which of these statements is correct? A. As enterprise density decreases, so the ratio of non-food to food retail outlets rises. B. As enterprise density increases, so the ratio of non-food to food retail outlets rises. C. As enterprise density decreases, so the ratio of non-food to food retail outlets decreases. D. As enterprise density increases, so the ratio of non-food to food retail outlets decreases. 4. Which of these statements is correct? A. Innovation will tend to flow to markets that are more advanced than the market that provides the innovation. B. Innovation will tend to flow to markets that are less advanced than the market that provides the innovation. C. Innovation will tend to originate in markets that are less advanced markets. D. Innovation will tend to originate in markets that are heavily regulated. 5. Emerging markets today are attractive to large retail enterprises from highly developed markets because: A. they provide risk free investment opportunities. B. they provide new sources of innovative retailing practices. C. they promise opportunities for international retailers' to experiment with new retail formats before transferring the concept to the domestic market. D. they promise to sustain the international retailers' levels and rate of growth. 6. Which of these statements is correct? A. A high number of inhabitants per retail outlet suggests a market with a undeveloped retail structure. B. A low number of inhabitants per retail outlet suggests a market with a developed retail structure. C. A high number of inhabitants per retail outlet suggests a market with a developed retail structure. D. A high number of inhabitants per retail outlet suggests a market with a retail structure that lacks modern retail operations. 7. Concentration calculations measure: A. the number of outlets one retailer has in a market. B. the number of retail businesses in a market. C. the share of a market held by one retailer or a group of retail enterprises. D. d) the number of consumers per retail outlet. 8. Which of these statements is correct? A. As enterprise density decreases, so the ratio of non-food to food retail outlets rises. B. As enterprise density increases, so the ratio of non-food to food retail outlets rises. C. As enterprise density decreases, so the ratio of non-food to food retail outlets decreases. D. As enterprise density increases, so the ratio of non-food to food retail outlets decreases.

10 9. Which of these statements is correct? A. Innovation will tend to flow to markets that are more advanced than the market that provides the innovation. B. Innovation will tend to flow to markets that are less advanced than the market that provides the innovation. C. Innovation will tend to originate in markets that are less advanced markets. D. Innovation will tend to originate in markets that are heavily regulated. 10. Emerging markets today are attractive to large retail enterprises from highly developed markets because: A. they provide risk free investment opportunities. B. they provide new sources of innovative retailing practices. C. they promise opportunities for international retailers' to experiment with new retail formats before transferring the concept to the domestic market. D. they promise to sustain the international retailers' levels and rate of growth. 1. (C) 2. (C) 3. (A) 4. (B) 5. (D) 6. (C) 7. (C) 8 (A) 9 (B) 10 (D) 1. According to Hofstede (1983) culture is: A. 'that part of our conditioning that we share with other members of our nation with members of groups like ours in other nations.' B. 'that part of our conditioning that we share with other members of our nation, region, or group and with members of other nations, regions, or groups.' C. 'that part of our conditioning that we share with other members of our group but not with members of other groups.' D. that part of our conditioning that we share with other members of our nation, region, or group but not with members of other nations, regions, or groups.' 2. What were the four general approaches to social interaction that emerged from Hofstede's research? A. Village market, family, social circle and well-oiled machine B. Village community, family, pyramid and well-oiled machine C. Village market, family, pyramid and well-oiled machine D. Village market, family, pyramid and dysfunctional machine 3. Alexander, Quinn, and Cairns (2005: 8) define international retail divestment as: A. company actions resulting in a reduced presence in a foreign market. This may take the form of closure of stores, sale of store chain, termination of a business contract/agreement (joint venture/franchising and so on) or organisational restructuring in the form of changing from corporate ownership to a franchising or licensing or distribution agreement. Divestment may or may not involve market exit. B. company actions resulting in a reduced presence in a foreign market. This always takes the form of closure of stores, sale of store chain, termination of a business contract/agreement (joint venture/franchising and so on) or organisational restructuring in the form of changing from corporate ownership to a franchising or licensing or distribution agreement. Divestment always involves market exit. C. company actions resulting in an increased presence in a foreign market. This may take the form of opening of stores, sale of store chain, termination of a business contract/agreement (joint venture/franchising and so on) or organisational restructuring in the form of changing from corporate ownership to a franchising or licensing or distribution agreement. Divestment never involves market exit. D. Competitors' actions that bring about a reduced presence in a foreign market. This may take the form of closure of stores, sale of store chain, termination of a business contract/agreement (joint venture/franchising and so on) or organisational restructuring in the form of changing from corporate ownership to a franchising or licensing or distribution agreement. Divestment may or may not involve market exit. 4. Chow and Hamilton (1993) originally classified the growing literature on domestic divestment into three strands based on the domain from which the work was emanating:

11 A. industrial organization, finance, and corporate strategy. B. industrial organization, market exit and corporate strategy. C. industrial organisation, finance and international marketing strategy. D. industrialization, finance, and corporate strategy. 5. Much international divestment research claims that: A. franchises are more likely to be divested than other modes of entry. B. acquisitions are more likely to be divested than other modes of entry. C. concessions are more likely to be divested than other modes of entry. D. Organically grown chains are more likely to be divested than other modes of entry. 1. (D) 2. (C) 3. (A) 4. (A) 5. (B)