Question 1

_____ refer to costs that an early entrant in a foreign market has to bear that a later entrant can avoid.

Accepted Answer

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

Question 2

Turnkey projects being short-term propositions can be disadvantageous for a firm if a country subsequently proves to be a major market for the output of the process that has been exported.The firm can get around this problem by:

Accepted Answer

A)   selling competitive advantage to competitors.
B)   competing with the local firm in the global market.
C)   taking a minority equity interest in the operation.
D)   withholding vital process technology from the local firm.
E)   establishing a joint venture with a local firm.

Question 3

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

Accepted Answer

A)   It helps a firm to realize substantial experience curve and location economies.
B)   It gives the firm tight control over manufacturing, marketing, and strategy.
C)   The licensor does not have to bear the development costs and risks associated with opening a foreign market.
D)   Firms can easily maintain control over how their technological know-how is used by a licensee.
E)   Licensing allows a foreign firm to use profits earned in one country to support competitive attacks in another.

Question 4

What is meant by first-mover advantages? Describe three first-mover advantages for international businesses.

Accepted Answer

The advantages frequently associated wit...

Question 5

Which of the following is true of significant strategic commitments to foreign expansion made by an international firm?

Accepted Answer

A)   Significant strategic commitments of a foreign firm have little or no influence on the nature of competition in a market.
B)   The large-scale entry of a foreign firm does not give other foreign institutions considering entry into the market a reason to pause.
C)   The large-scale entry of a foreign firm gives customers reasons for believing that the foreign firm will not remain in the market for the long run.
D)   Significant strategic commitments are associated with higher strategic flexibility of the international firm.
E)   Significant strategic commitments are neither unambiguously good nor bad.

Question 6

First-mover advantages refer to the advantages frequently associated with entering a market early.

Accepted Answer

A) True 
 B)False

Question 7

How should a firm choose between a greenfield venture and an acquisition?

Accepted Answer

The choice between acquisitions and gree...

Question 8

Describe the pros and cons of greenfield ventures.

Accepted Answer

The advantage of establishing a greenfie...

Question 9

For an international firm,entering a foreign market before other international businesses does not have any drawbacks.

Accepted Answer

A) True 
 B)False

Question 10

_____ with a foreign firm are believed to reduce the risks associated with licensing technological know-how.

Accepted Answer

A)   Compulsory licensing agreements
B)   Reciprocal licensing agreements
C)   Open source licensing agreements
D)   Cross-licensing agreements
E)   Exclusive licensing agreements

Question 11

Which of the following is true of foreign expansion?

Accepted Answer

A)   The timing and scale of entry for foreign expansion are minor details in comparison with the choice of foreign market.
B)   The long-run economic benefits of doing business in a country are a function of the country's population size.
C)   All the nations in the world do not all hold the same profit potential for a firm contemplating foreign expansion.
D)   The costs and risks associated with foreign expansion are higher in economically advanced nations.
E)   Other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in politically unstable nations.

Question 12

A joint venture in which both parties hold equal ownership stakes is known as a(n) _____.

Accepted Answer

A)   offshore joint venture
B)   50/50 joint venture
C)   25/75 joint venture
D)   marketing joint venture
E)   fully integrated joint venture

Question 13

The attractiveness of a country as a potential market for an international business depends solely on the size of its consumer market.

Accepted Answer

A) True 
 B)False

Question 14

In terms of an international firm considering foreign expansion,_____ include the costs of promoting and establishing a product offering,and educating customers.

Accepted Answer

A)   Sunk costs
B)   Pioneering costs
C)   Opportunity costs
D)   Intangible costs
E)   Standard costs

Question 15

If a firm is seeking to enter a market via a wholly owned subsidiary where there are already well-established incumbent enterprises,and where global competitors are also interested in establishing a presence,a(n) _____ is a suitable mode of entry.

Accepted Answer

A)   acquisition
B)   licensing deal
C)   greenfield venture
D)   turnkey project
E)   exporting deal

Question 16

Which of the following is true of the factors regarding the selection of a foreign market?

Accepted Answer

A)   All nation states in the world hold the same profit potential for a firm contemplating foreign expansion.
B)   The long-run economic benefits of foreign expansion are a function of factors such as the likely future wealth of consumers.
C)   Less populous nations have a higher potential for economic growth.
D)   Politically unstable nations by virtue of their higher potential for growth are the best foreign markets.
E)   The attractiveness of a country as a potential market for an international business depends only on its geographical location.

Question 17

Licensing,a mode of entry into a foreign market,gives an international firm tight control over manufacturing,marketing,and strategy that is required for realizing experience curve and location economies.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following entry modes into a foreign market best serves a high-tech firm?

Accepted Answer

A)   Turnkey projects
B)   Franchising
C)   Wholly owned subsidiaries
D)   Joint ventures
E)   Exporting

Question 19

Which of the following is an advantage of acquisitions as a means of entry into foreign markets?

Accepted Answer

A)   When a firm makes an acquisition, it buys a set of assets that are producing a known revenue.
B)   Acquiring firms underpay for the assets of the acquired firm.
C)   After an acquisition, many acquired companies face a rise in recruitments.
D)   Integrating the operations of the acquired and acquiring entities often takes a short period of time.
E)   Most acquisitions succeed due to detailed pre-acquisition screening.

Question 20

A drawback of a(n) _____,a mode of entry into foreign markets,is that the firm that uses this strategy will have no long-term interest in a foreign country.

Accepted Answer

A)   joint venture
B)   greenfield venture
C)   acquisition
D)   turnkey deal
E)   franchising agreement

Exam 13: Entering Foreign Markets

How should a firm choose between a greenfield venture and an acquisition?

Correct AnswerverifiedThe choice between acquisitions and gree...View AnswerShow Answer

In terms of an international firm considering foreign expansion,_____ include the costs of promoting and establishing a product offering,and educating customers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a firm is seeking to enter a market via a wholly owned subsidiary where there are already well-established incumbent enterprises,and where global competitors are also interested in establishing a presence,a(n) _____ is a suitable mode of entry.

Correct AnswerverifiedShow Answer

Which of the following is true of significant strategic commitments to foreign expansion made by an international firm?

Correct AnswerverifiedShow Answer

A joint venture in which both parties hold equal ownership stakes is known as a(n) _____.

Correct AnswerverifiedShow Answer

For an international firm,entering a foreign market before other international businesses does not have any drawbacks.

Correct AnswerverifiedShow Answer

Turnkey projects being short-term propositions can be disadvantageous for a firm if a country subsequently proves to be a major market for the output of the process that has been exported.The firm can get around this problem by:

Correct AnswerverifiedShow Answer

The attractiveness of a country as a potential market for an international business depends solely on the size of its consumer market.

Correct AnswerverifiedShow Answer

_____ refer to costs that an early entrant in a foreign market has to bear that a later entrant can avoid.

Correct AnswerverifiedShow Answer

First-mover advantages refer to the advantages frequently associated with entering a market early.

Correct AnswerverifiedShow Answer

Describe the pros and cons of greenfield ventures.

Correct AnswerverifiedThe advantage of establishing a greenfie...View AnswerShow Answer

Which of the following is true of the factors regarding the selection of a foreign market?

Correct AnswerverifiedShow Answer

_____ with a foreign firm are believed to reduce the risks associated with licensing technological know-how.

Correct AnswerverifiedShow Answer

A drawback of a(n) _____,a mode of entry into foreign markets,is that the firm that uses this strategy will have no long-term interest in a foreign country.

Correct AnswerverifiedShow Answer

Which of the following is true of foreign expansion?

Correct AnswerverifiedShow Answer

Which of the following is an advantage of acquisitions as a means of entry into foreign markets?

Correct AnswerverifiedShow Answer

Licensing,a mode of entry into a foreign market,gives an international firm tight control over manufacturing,marketing,and strategy that is required for realizing experience curve and location economies.

Correct AnswerverifiedShow Answer

Which of the following entry modes into a foreign market best serves a high-tech firm?

Correct AnswerverifiedShow Answer

What is meant by first-mover advantages? Describe three first-mover advantages for international businesses.

Correct AnswerverifiedThe advantages frequently associated wit...View AnswerShow Answer

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The advantage of establishing a greenfie...
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The advantages frequently associated wit...
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