Chapter 2 Globalization of Markets and the Internationalization of the Firm

1) Globalization of production activities and services is a dimension of market globalization.
Answer: TRUE

2) Companies strive to drive down prices through economies of scale, by standardizing what they sell.
Answer: TRUE

3) Falling trade barriers are facilitated by the WTO.
Answer: TRUE

4) Technological advances have helped make internationalization affordable for all sizes of firms.
Answer: TRUE

5) The Internet has increased the cost of transmitting voices, data, and images.
Answer: FALSE

6) Mobile phones are the most transformative technology in developing economies.
Answer: TRUE

7) Today, the cost of transportation, as a proportion of the value of products shipped internationally, has increased dramatically.
Answer: FALSE

8) Globalization results in more demanding buyers who shop for the best deals worldwide.
Answer: TRUE

9) Which of the following is characteristic of globalization of markets?
A) lack of skilled labor
B) conservatism
C) declining trade barriers
D) diminishing gap between the rich and the poor
Answer: C

Global Operations Report (Scenario)
As Vice President of Global Expansion for Pax Telecom, Deva Mikiri is tasked with preparing a comprehensive report on the company's global operations over the past twenty years. Deva assigns three strategists to collaborate on the History portion of the report, which details the rationale behind Pax's decisions to expand operations in particular areas. Rashid Ahl focuses on early expansion to China, which occurred after China began to make its market more accessible to foreign companies. Markus Teller focuses on Pax's expansion to Eastern Europe, which was motivated by increased industry privatization in key countries. Lavonne Jackson focuses on expansion to