Question 1

Establishing a _____ gives international firms a 100 percent share in the profits generated in a foreign market.

Accepted Answer

A)   franchising agreement
B)   licensing deal
C)   joint venture
D)   wholly owned subsidiary
E)   turnkey projectF) A) and B)
G) None of the above

Question 2

In terms of international business,briefly describe pioneering costs.

Accepted Answer

Pioneering costs are costs that an early...

Question 3

A _____,a mode of entry into foreign markets,entails establishing a firm that is collectively owned by two or more otherwise independent firms.

Accepted Answer

A)   licensing agreement
B)   wholly owned subsidiary
C)   franchising agreement
D)   joint venture
E)   greenfield investmentF) A) and C)
G) B) and C)

Question 4

Which of the following is true of strategic commitments for an international firm considering foreign expansion?

Accepted Answer

A)   They have a short-term impact.
B)   They are frequently subject to change.
C)   They fail to have a significant influence on business decisions.
D)   They are difficult to reverse.
E)   They are made on a day-to-day basis by employees at various levels in an organization.F) A) and E)
G) A) and D)

Question 5

The probability of survival decreases if an international business enters a national market after several other foreign firms have already done so.

Accepted Answer

A) True 
 B)False

Question 6

An advantage of licensing and franchising is the low development costs and risks.

Accepted Answer

A) True 
 B)False

Question 7

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 8

In which of the following situations can an international business command higher prices for a particular product in a foreign market?

Accepted Answer

A)   When the product is widely available in the foreign market
B)   When sales volumes is relatively low in the foreign market
C)   When the product offers greater value to customers in the foreign market
D)   When the product is more suitable to other foreign markets
E)   When domestic competitors are selling alternatives at reduced pricesF) All of the above
G) A) and E)

Question 9

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) D) and E)
G) B) and E)

Question 10

In international business,the benefits frequently associated with entering a foreign market early are known as _____.

Accepted Answer

A)   pioneering costs
B)   first-mover advantages
C)   absolute advantages
D)   bandwagon effects
E)   factor endowmentsF) A) and C)
G) A) and D)

Question 11

_____ arise when the business system in a foreign country is so different from that in a firm's home market that the enterprise has to devote considerable effort,time,and expense to learning the rules of the game.

Accepted Answer

A)   Sunk costs
B)   Variable costs
C)   Pioneering costs
D)   Opportunity costs
E)   Standard costsF) A) and B)
G) B) and D)

Question 12

To reduce the risks of failure of an acquisition,managers must:

Accepted Answer

A)   pay more for the acquired unit to please its existing employees.
B)   encourage and facilitate management turnover.
C)   acquire a firm without wasting time on screening.
D)   move rapidly after an acquisition to put an integration plan in place.
E)   ensure that the work cultures are significantly different from each other.F) A) and B)
G) C) and D)

Question 13

In a typical international licensing deal,a licensor puts up most of the capital necessary to get an overseas operation going.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following can be used to overcome quality control problems associated with franchising as a mode of entry into foreign markets?

Accepted Answer

A)   Licensing agreements
B)   Subsidiaries
C)   Turnkey projects
D)   Export licenses
E)   Cross-licensing agreementsF) B) and D)
G) B) and C)

Question 15

An advantage of a(n) _____,a mode of entry into foreign markets,is that it provides a firm with much greater ability to build the kind of subsidiary company that it wants.

Accepted Answer

A)   acquisition
B)   merger
C)   franchise
D)   greenfield venture
E)   turnkey projectF) A) and B)
G) C) and D)

Question 16

Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets?

Accepted Answer

A)   It is an ideal way to gain entry into a country where FDI is not limited by government regulations.
B)   It is a useful strategy to earn great returns from the know-how of a technologically complex process.
C)   It is an ideal way to establish a firm's long-term presence in a foreign country.
D)   It helps protect a firm's competitive advantage.
E)   The firm that enters into a turnkey project with a foreign enterprise avoids giving rise to potential competitors.F) B) and C)
G) A) and D)

Question 17

What are the advantages and disadvantages of exporting as a mode of entry into foreign markets?

Accepted Answer

Exporting has two distinct advantages.Fi...

Question 18

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

Accepted Answer

A)   A licensor grants the rights to tangible property to a licensee.
B)   A licensing agreement grants rights to intangible property to a licensee for an unspecified period.
C)   The licensor receives a royalty fee from the licensee.
D)   The licensor puts up all of the capital necessary to start a business.
E)   The licensor maintains control over its technological know-how.F) C) and E)
G) A) and B)

Question 19

One of the advantages of acquisitions is that they are quick to execute.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following modes of entry into foreign markets has the distinct advantages of protection of technology,the ability to engage in global strategic coordination,and the ability to realize location and experience curve economies?

Accepted Answer

A)   Franchising
B)   Wholly owned subsidiaries
C)   Joint ventures
D)   Licensing
E)   ExportingF) C) and D)
G) B) and E)

Exam 13: Entering Foreign Markets

The probability of survival decreases if an international business enters a national market after several other foreign firms have already done so.

Correct AnswerverifiedShow Answer

Which of the following is true of strategic commitments for an international firm considering foreign expansion?

Correct AnswerverifiedShow Answer

In which of the following situations can an international business command higher prices for a particular product in a foreign market?

Correct AnswerverifiedShow Answer

What are the advantages and disadvantages of exporting as a mode of entry into foreign markets?

Correct AnswerverifiedExporting has two distinct advantages.Fi...View AnswerShow Answer

Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets?

Correct AnswerverifiedShow Answer

Which of the following modes of entry into foreign markets has the distinct advantages of protection of technology,the ability to engage in global strategic coordination,and the ability to realize location and experience curve economies?

Correct AnswerverifiedShow Answer

An advantage of licensing and franchising is the low development costs and risks.

Correct AnswerverifiedShow Answer

_____ arise when the business system in a foreign country is so different from that in a firm's home market that the enterprise has to devote considerable effort,time,and expense to learning the rules of the game.

Correct AnswerverifiedShow Answer

A _____,a mode of entry into foreign markets,entails establishing a firm that is collectively owned by two or more otherwise independent firms.

Correct AnswerverifiedShow Answer

In international business,the benefits frequently associated with entering a foreign market early are known as _____.

Correct AnswerverifiedShow Answer

One of the advantages of acquisitions is that they are quick to execute.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

To reduce the risks of failure of an acquisition,managers must:

Correct AnswerverifiedShow Answer

In a typical international licensing deal,a licensor puts up most of the capital necessary to get an overseas operation going.

Correct AnswerverifiedShow Answer

Establishing a _____ gives international firms a 100 percent share in the profits generated in a foreign market.

Correct AnswerverifiedShow Answer

In terms of international business,briefly describe pioneering costs.

Correct AnswerverifiedPioneering costs are costs that an early...View AnswerShow Answer

Which of the following can be used to overcome quality control problems associated with franchising as a mode of entry into foreign markets?

Correct AnswerverifiedShow Answer

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 true of licensing as a mode of entry into foreign markets?

Correct AnswerverifiedShow Answer

An advantage of a(n) _____,a mode of entry into foreign markets,is that it provides a firm with much greater ability to build the kind of subsidiary company that it wants.

Correct AnswerverifiedShow Answer

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Exporting has two distinct advantages.Fi...
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Pioneering costs are costs that an early...
View Answer

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