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Organisational Advantage

100

Explain what is an O-Advantage

Resources of the firm that

are transferable across

borders and enable the

firm to attain competitive

advantages abroad

200

Give an example of O-advantage

Firm that have resources that have been able to use to make a competitive advantage out of it.

( Google,Toyota, etc.)

300

 Which of the following is an example of an O-advantage (Ownership Advantage)?

• A) A company establishes a manufacturing plant in a country with low labor costs to reduce production costs.
• B) A firm owns proprietary technology that gives it a competitive edge in international markets.
• C) A company chooses to outsource certain operations to reduce costs.
• D) A multinational enterprise establishes operations in a country due to favorable government incentives.

Answer: B) A firm owns proprietary technology that gives it a competitive edge in international markets.

400

Find the O-advantage that is not part of a normal MNE 

A) proprietary technological 

B) Delivery of know how

C)Experience in institutional imperfect environments

D) Enables resources to be boundary-less

Answer: C) Experience in institutional imperfect environments

Location Advantage

100

Explain what is an L-Advantage

An advantage enjoyed by

firms operating in certain

locations.

200

Give an example of L-advantage

The gains of getting in a specific location

(Nestlé in Switzerland)

300

What is an example of an L-advantage (Location Advantage) in the context of FDI?

• A) A company prefers to internalise its marketing efforts to protect intellectual property.
• B) A firm invests in a country because it has access to a skilled labor force and natural resources.
• C) A firm maintains ownership of its entire supply chain to reduce transaction costs.
• D) A company invests in a foreign country to avoid trade barriers and tariffs.

Answer: B) A firm invests in a country because it has access to a skilled labor force and natural resources.

400

An example of an agglomeration would be:

• A) Oil drilling operations in offshore sites
• B) Manufacturing plants located in rural areas
• C) Wind energy companies clustered in Denmark
• D) Retail stores in multiple suburban locations

Answer: C) Wind energy companies clustered in Denmark

Internalisation Advantage

100

Explain what is an L-Advantage

Advantages of organizing

activities within a

multinational firm rather

than using a market

transaction.

200

Give an example of I-advantage

firm benefit of keeping control over certain operations.

( Starbucks produce its own coffee)

300

Which scenario best illustrates an I-advantage (Internalization advantage) under the OLI framework?

• A) A company chooses to license its technology to a foreign company to avoid managing operations abroad
• B) A multinational firm builds its own distribution network in a foreign country to reduce transaction costs and protect intellectual property
• C) A company relies on local suppliers in a foreign country to reduce production costs
• D) A firm sells its products through independent distributors in foreign markets

Answer: B) A multinational firm builds its own distribution network in a foreign country to reduce transaction costs and protect intellectual property

400

Sometimes FDI is the best solution instead of other contracting methods that are used to expand abroad.Which of those factors FDI doesn't avoid?

A)Tacit knowledge

B) Dissemination Risk

C)Asset specificity

D) Cost monitoring

 Answer: A) Tacit knowledge