It is imprudent to simply focus on international revenues or to just expand inte

Question

It is imprudent to simply focus on international revenues or to just expand internationally and hope it will pay off. It would be much wiser to...

a)Determine global expansion by sizeism

b)Use a capitalization/product return analysis

c)Apply a cross learning and innovation potential analysis

d)Use a value-focused perspective

It used to be easy to figure out which industries were of national strategic importance to the host country. The consumer products industry, for instance, was not, but arms manufacturing was. In the new guarded globalization any sector could prove strategic. Accordingly companies must realize….

a)These changes will have an impact on their strategies

b)Numerous companies are drawing fresh levels of official scrutiny

c)State’s reach now extends well beyond traditionally key sector of arms

d)Host countries are working more closely with multinational companies to help avoid sensitive areas

Explanation / Answer

Sizeism leads to focus on narrow metrics like percentage of a company's revenue earned outside its home country.

capitalization/product return analysis is a broader analysis of the amount of money invested in a product and the return expected thereoff. Its a wise analysis and helps a firm determine whether it will be profitable to expand internationally based on the ROI analysis. capitalization/product return analysis is a type of ROI analysis. This will help the firm make rational and logical decisions.

Hence the answer is option "b".

The answer to the subject of industries which are of strategic importance is that the companies must realize that the changes will have an impact on their strategies. For example many Chinese telecom equipment manufacturers are not allowed to participate in Government telecom tenders for handsets, network and other hardware requirements in India. This is because this area is considered as of strategic importance and Chinese equipment makers have a perceived danger in terms of privacy. So the Chinese makers concentrate on retailing the handsets and equipments in India.

So the answer is option "a".

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