Question 1

Firms pursuing global standardization or transnational strategies tend to prefer setting up wholly owned marketing subsidiaries.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following is a disadvantage of franchising?

Accepted Answer

A)  The franchiser has to bear development costs and risks associated with foreign expansion.
B)  Franchising leads to undesirable results for service firms.
C)  It is difficult to maintain quality control across foreign franchisees that are distant from the franchiser.
D)  The franchiser has no long-term interests in the foreign country.
E)  It forces a franchiser to take out profits from one country to support competitive attacks in another.F) All of the above
G) None of the above

Question 3

What are the consequences of an international firm entering a foreign market on a significant scale?

Accepted Answer

The consequences of entering on a signif...

Question 4

The risk of failure of an acquisition can be reduced by:

Accepted Answer

A)  undervaluing the assets of an acquired firm.
B)  ensuring that firms are acquired in the home country.
C)  replacing high-level managers of an acquired firm.
D)  a detailed auditing of operations, financial position, and management culture.
E)  investing only in a firm that is managing to break even.F) A) and D)
G) A) and C)

Question 5

Which of the following countries presents a favorable benefit-cost-risk trade-off scenario for foreign expansion?

Accepted Answer

A)  A country ridden by private-sector debt
B)  A country with a free market system
C)  A country experiencing a dramatic upsurge in inflation rates
D)  A country that is heavily populated
E)  A country that is less developed and politically unstableF) A) and E)
G) All of the above

Question 6

In which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational?

Accepted Answer

A)  Franchising agreement
B)  Turnkey project
C)  Licensing agreement
D)  Wholly owned subsidiary
E)  Joint ventureF) B) and C)
G) D) and E)

Question 7

Describe the entry modes that a firm with core competency in technological know-how can choose.

Accepted Answer

If a firm's competitive advantage (its c...

Question 8

An early entrant find may find itself at a disadvantage if it:

Accepted Answer

A)  is trying to realize location and experience curve economies.
B)  incurs low development costs.
C)  faces a subsequent change in business regulations in the host-country.
D)  has a core competence based on control over technological know-how.
E)  considers a greenfield strategy.F) All of the above
G) B) and D)

Question 9

When should a firm configure its value chain to maximize value at each stage?

Accepted Answer

A)  When government regulations relax
B)  When cost pressures are intense
C)  When rapid imitation is expected
D)  When the number of consumers increases
E)  When incumbent competitors existF) C) and E)
G) A) and B)

Question 10

In international business, a product that is not widely available in a foreign market and satisfies an unmet need:

Accepted Answer

A)  is likely to have greater value.
B)  will have to be priced relatively low.
C)  will see a decrease in sales volume.
D)  is not suited to that particular market.
E)  will fail to make a profit.F) B) and D)
G) A) and E)

Question 11

According to Christopher Bartlett and Sumantra Ghoshal, how can local companies differentiate themselves from foreign multinationals?

Accepted Answer

A)  By licensing their core technologies
B)  By entering into turnkey projects
C)  By standardizing their product offerings
D)  By focusing on market niches
E)  By raising trade barriersF) B) and E)
G) B) and C)

Question 12

Which of the following is true of the costs and risks associated with doing business in a foreign country?

Accepted Answer

A)  They are greater for late entrants.
B)  They are higher in politically democratic nations.
C)  They are less pronounced in the case of licensing.
D)  They are lower in economically advanced nations.
E)  They are called opportunity costs.F) A) and D)
G) A) and C)

Question 13

Which of the following describes a turnkey project?

Accepted Answer

A)  Granting rights to intangible property to other firms
B)  Establishing firms that are jointly owned by two or more otherwise independent firms
C)  Exporting process technology to other countries
D)  Setting up wholly owned subsidiaries in foreign nations
E)  Selling products produced in one country to residents of other countriesF) C) and D)
G) A) and E) C

Question 14

An international firm that perceives its technological advantage to be transitory and susceptive to rapid imitation might want to license its technology to foreign firms.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a drawback of licensing as a mode of entry into foreign markets?

Accepted Answer

A)  The licensor has to bear all costs and risks associated with developing a foreign market.
B)  Licensing does not give a firm tight control over manufacturing, marketing, and strategy.
C)  Licensing does not benefit firms lacking the capital to expand operations overseas.
D)  Licensing deals fail when there are barriers to foreign investment in a particular country.
E)  A firm that enters into a licensing deal with a foreign country will have no long-term interest in that country.F) C) and D)
G) A) and B)

Question 16

Which of the following is a risk of entering developing nations like India and China on a large scale?

Accepted Answer

A)  Lower potential for long-term rewards
B)  Absence of prior foreign entrants
C)  Lack of control over quality
D)  Fear of rapid imitation of technology
E)  High management turnoverF) B) and C)
G) D) and E)

Question 17

The probability of survival for an international business increases if it:

Accepted Answer

A)  enters a national market after several other foreign firms have already done so.
B)  avoids the use of countertrade agreements.
C)  enters a national market early.
D)  enters a foreign market via turnkey projects.
E)  avoids engaging in joint ventures.F) A) and B)
G) All of the above

Question 18

Which types of firms do NOT risk the loss of management control? What entry modes should such firms employ? Give examples.

Accepted Answer

The competitive advantage of many service firms is based on management know-how (e.g., McDonald's, Starbucks). For such firms, the risk of losing control over the management skills to franchisees or joint-venture partners is not that great. These firms' valuable asset is their brand name, and brand names are generally well protected by international laws pertaining to trademarks. Given this, many of the issues arising in the case of technological know-how are of less concern here. As a result, many service firms favor a combination of franchising and subsidiaries to control the franchises within particular countries or regions. The subsidiaries may be wholly owned or joint ventures, but most service firms have found that joint ventures with local partners work best for the controlling subsidiaries. A joint venture is often politically more acceptable and brings a degree of local knowledge to the subsidiary.

Question 19

Briefly describe the value that an international business can create in a foreign market.

Accepted Answer

An important factor in an international ...

Question 20

An advantage of establishing a greenfield venture in a foreign country is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants.

Accepted Answer

A) True 
 B)False

Exam 13: Entering Foreign Markets

Firms pursuing global standardization or transnational strategies tend to prefer setting up wholly owned marketing subsidiaries.

Correct Answer
verified
True

Which of the following is a disadvantage of franchising?

Correct Answer
verified

What are the consequences of an international firm entering a foreign market on a significant scale?

Correct Answer
verified
The consequences of entering on a signif...
View Answer

The risk of failure of an acquisition can be reduced by:

Correct Answer
verified

Which of the following countries presents a favorable benefit-cost-risk trade-off scenario for foreign expansion?

Correct Answer
verified

In which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational?

Correct Answer
verified

Describe the entry modes that a firm with core competency in technological know-how can choose.

Correct Answer
verified
If a firm's competitive advantage (its c...
View Answer

An early entrant find may find itself at a disadvantage if it:

Correct Answer
verified

When should a firm configure its value chain to maximize value at each stage?

Correct Answer
verified

In international business, a product that is not widely available in a foreign market and satisfies an unmet need:

Correct Answer
verified

According to Christopher Bartlett and Sumantra Ghoshal, how can local companies differentiate themselves from foreign multinationals?

Correct Answer
verified

Which of the following is true of the costs and risks associated with doing business in a foreign country?

Correct Answer
verified

Which of the following describes a turnkey project?

Correct Answer
verified
C

An international firm that perceives its technological advantage to be transitory and susceptive to rapid imitation might want to license its technology to foreign firms.

Correct Answer
verified

Which of the following is a drawback of licensing as a mode of entry into foreign markets?

Correct Answer
verified

Which of the following is a risk of entering developing nations like India and China on a large scale?

Correct Answer
verified

The probability of survival for an international business increases if it:

Correct Answer
verified

Which types of firms do NOT risk the loss of management control? What entry modes should such firms employ? Give examples.

Briefly describe the value that an international business can create in a foreign market.

Correct Answer
verified
An important factor in an international ...
View Answer

An advantage of establishing a greenfield venture in a foreign country is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants.

Correct Answer
verified

Exam 13: Entering Foreign Markets

Firms pursuing global standardization or transnational strategies tend to prefer setting up wholly owned marketing subsidiaries.

Correct AnswerverifiedTrue

Which of the following is a disadvantage of franchising?

Correct AnswerverifiedShow Answer

What are the consequences of an international firm entering a foreign market on a significant scale?

Correct AnswerverifiedThe consequences of entering on a signif...View AnswerShow Answer

The risk of failure of an acquisition can be reduced by:

Correct AnswerverifiedShow Answer

Which of the following countries presents a favorable benefit-cost-risk trade-off scenario for foreign expansion?

Correct AnswerverifiedShow Answer

In which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational?

Correct AnswerverifiedShow Answer

Describe the entry modes that a firm with core competency in technological know-how can choose.

Correct AnswerverifiedIf a firm's competitive advantage (its c...View AnswerShow Answer

An early entrant find may find itself at a disadvantage if it:

Correct AnswerverifiedShow Answer

When should a firm configure its value chain to maximize value at each stage?

Correct AnswerverifiedShow Answer

In international business, a product that is not widely available in a foreign market and satisfies an unmet need:

Correct AnswerverifiedShow Answer

According to Christopher Bartlett and Sumantra Ghoshal, how can local companies differentiate themselves from foreign multinationals?

Correct AnswerverifiedShow Answer

Which of the following is true of the costs and risks associated with doing business in a foreign country?

Correct AnswerverifiedShow Answer

Which of the following describes a turnkey project?

Correct AnswerverifiedC

An international firm that perceives its technological advantage to be transitory and susceptive to rapid imitation might want to license its technology to foreign firms.

Correct AnswerverifiedShow Answer

Which of the following is a drawback of licensing as a mode of entry into foreign markets?

Correct AnswerverifiedShow Answer

Which of the following is a risk of entering developing nations like India and China on a large scale?

Correct AnswerverifiedShow Answer

The probability of survival for an international business increases if it:

Correct AnswerverifiedShow Answer

Which types of firms do NOT risk the loss of management control? What entry modes should such firms employ? Give examples.

Briefly describe the value that an international business can create in a foreign market.

Correct AnswerverifiedAn important factor in an international ...View AnswerShow Answer

An advantage of establishing a greenfield venture in a foreign country is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants.

Correct AnswerverifiedShow Answer

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True

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The consequences of entering on a signif...
View Answer

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If a firm's competitive advantage (its c...
View Answer

Correct Answer
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Correct Answer
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C

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An important factor in an international ...
View Answer

Correct Answer
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