question

Which of the following is NOT a basic decision that a firm contemplating foreign expansion must make?

answer

How to withdraw from markets

question

When making basic entry decisions, the benefit-cost0risk trade-off is likely to be favorable in which type of country?

answer

A country with a free market system

question

The advantages frequently associated with entering a market early are commonly known as:

answer

first-mover advantages

question

Which of the following is a first-mover advantage?

answer

Create switching costs that tie customers into their products or services

question

_______ arises 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.

answer

Pioneering costs

question

A decision that has a long-term impact and is difficult to reverse is a:

answer

strategic commitment

question

The _____ entrant is more likely than the _____ entrant to be able to capture the first-mover advantages associated with demand preemption, scale economies, and switching costs.

answer

large scale: small scale

question

What type of entry allows a firm to learn about a foreign market while limiting the firm's exposure to that market?

answer

Small-scale

question

Which of the following is NOT a mode of entry that firms can use to enter foreign markets?

answer

Initial public offering

question

Which of the following is an advantage of exporting?

answer

allows a firm to achieve experience curve and location economies

question

All of the following statements are disadvantages of exporting EXCEPT:

answer

exporting may help a firm achieve experience curve economies

question

Tariff barriers can make it uneconomical to use which mode of entry?

answer

Exporting

question

Turnkey projects are means of exporting _____ to other countries

answer

process technology

question

Turnkey projects are most common in the following industries:

answer

chemical, pharmaceutical, petroleum refining, and metal refining

question

An advantage of ____ is that they are a way of earning great economic returns from technological assets

answer

turnkey projects

question

Creating competitors and lack of long-term market presence are disadvantages of:

answer

turnkey projects

question

In which of the strategy does a foreign client have the least input in details of a project?

answer

Turnkety strategy

question

An arrangement where by a s licensor grants the right to intangible property to another entity for a specified time period in exchange for royalties is a _____ agreement

answer

licensing

question

Examples of ____ property include patents, inventions, formulas, processes, designs, copyrights, and trademarks

answer

intangible

question

A primary advantage of _____ is that the firm does not have to bear the development costs and risks associated with opening a foreign market

answer

licensing

question

Which of the following is NOT a drawback of licensing?

answer

Licensing can become unprofitable due to trade barriers and transportation costs

question

Under a _____ agreement, a firm might license some valuable intangible property to a foreign partner, but in addition to a royalty payment, the firm might also request that the foreign partner licensing some of its valuable know-how to the firm

answer

cross-licensing

question

Cross-licensing agreements are increasingly common in:

answer

high-technology industries

question

Although they are similar, ____ tends to involve longer-term commitments than:

answer

franchising: licensing

question

Franchising is employed primarily by:

answer

service firms

question

Advantages of ___ are low development costs and risks

answer

franchising and licensing

question

Because the ____ typically assumes most costs and risks, he or she has the incentive to build a profitable operation as quickly as possible.

answer

franchisee

question

In franchises, the result of ____ can extend beyond lost sales in a particular foreign market to a decline in the firm's worldwide reputation.

answer

poor quality

question

A ____ entails establishment of a firm that is jointly owned by two or more otherwise independent firms.

answer

joint venture

question

The most typical joint venture is:

answer

50/50, in which there are two partners and each partner holds an equal shar

question

____ has the following advantages: firms benefit from a local partner's Knowledge pf the host country's competitive conditions, a firm shares development costs with a local partner, and in many countries political considerations necessitate this form of entry.

answer

A joint venture

question

Which of the following is NOT a disadvantage of joint ventures?

answer

A joint venture is the most costly and risky choice

question

Which of the following is a disadvantage of joint ventures?

answer

The shared ownership arrangement can lead to conflicts and battles for control between the investing firms

question

In a _____, the firm owns 100 percent of the stock

answer

wholly owned subsidiary

question

Establishing a wholly owned subsidiary in a foreign country can be done:

answer

by setting up a new operation or by acquiring an established firm

question

ING's strategy for entering the US market was to acquire established US enterprises, rather than try to build an operation from the ground floor. ING follows which strategy?

answer

Wholly owned subsidiary strategy

question

A _______ is the preferred mode of foreign market entry for high-tech firms that want to minimize the risk of losing control over its technological competence; and maintain tight control over its operations

answer

wholly owned subsidiary

question

Protection of technology, the ability to engage in global strategic coordination, and the ability to realize location and experience curve economies are distinct advantages of:

answer

wholly owned subsidiaries

question

What is the most costly form of foreign market entry?

answer

wholly owned subsidiary

question

Which entry mode has low development costs and risks?

answer

Franchising

question

Which entry mode has the ability to realize location and experience curve economies?

answer

Exporting

question

Which entry mode has high costs and risks

answer

wholly owned subsidiaries

question

Which entry mode has a lack of control over quality

answer

franchising

question

The greatest the pressures for costs reductions are, the most likely a firm will want to pursue some combination of:

answer

Exporting and wholly owned subsidiaries

question

Why are wholly owned subsidiaries preferred by the firms pursuing global or transnational strategies?

answer

For these firms risk of losing control over the management skills o franchise or joint-venture partners is not that great?>?>?>?>?>?>?>?>?>?>

question

Which of the following is an advantage of acquisitions?

answer

They are quick to execute and establish a sizable presence in the target market

question

Which of the following is NOT an advantage of acquisitions?

answer

They are the least expensive form of expansion

question

If a firm is entering a market where there are already well-established incumbent enterprises, and where global competitors are also interested in establishing a presence, it may pay the firm to enter via an:

answer

Acquisition

question

Which term refers to the situation when the management of the acquisition and is willing to pay a significant premium over a target firm's market capitalization?

answer

The hubris hypothesis

question

Differences in ____ can slow the integration of operations in acquisitions

answer

management philosophy

question

After the DaimlerChrysler merger, many senior managers left Chrysler because they disliked the dominance in decision making by Damiler's German managers. This illustrates what type of acquisition disadvantage?

answer

Acquisitions may fail because there is a clash between the cultures of the two firms

question

What can be done to reduce the risk of failure of an acquisition?

answer

Ensure that the firm does not pay too much for the acquired unit

question

______ are less risky than _______ in the sense that there is less potential for unpleasant surprises

answer

Green-field ventures; acquisitions

question

THe big advantage of establishing a ________ in a foreign country is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants

answer

greenfield venture

question

AN advantage of establishing a greenfield venture in a foreign country is that it give the firm a much ______ to build the kind of subsidiary company that it wants.

answer

greater ability

question

It is much easier to build an organization culture from ________ than it is to change the culture of an acquired unit

answer

scratch

question

Suzi's Sleds, Inc. is considering establishing a subsidiary in Japan, where there are no other incumbent competitors acquire. Suzi's would do best in Japan with a:

answer

green-field venture

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