Exam 13: Entering Foreign Markets

A) capturing first-mover advantages
B) higher pioneering costs
C) rapid increase in market share
D) limited future growth potential
E) increase in sales volume

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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.

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The greater the pressures for cost reduc...

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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.

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A) infrastructure
B) machinery
C) leased equipment
D) advanced computing systems
E) patent

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

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A) possibility of escalating commitment leading to major financial losses
B) limited availability of resources for use in other markets
C) lack of flexibility associated with strategic commitments
D) increase in economic exposure due to minimal time spent in evaluating a foreign market
E) difficulty of building market share and capturing first-mover advantages

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A) engages in global strategic coordination.
B) imposes strict marketing guidelines on how to do business.
C) enters a greenfield venture in the host country.
D) realizes substantial location economies.
E) acquires an established host-country enterprise.

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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 unstable

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A) selling intangible property to a franchisee and insisting on rules to conduct the business.
B) changing agents frequently.
C) engaging in turnkey projects and exporting process technology to foreign firms.
D) entering into cross-licensing agreements with foreign firms.
E) setting up wholly owned subsidiaries in foreign nations to handle local marketing.

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A) disadvantages associated with entering a foreign market before other international businesses.
B) costs that a late entrant to a foreign market has to bear.
C) a direct restriction on the quantity of a good that can be imported into a country.
D) imperfections in the operation of the market mechanism.
E) disadvantages experienced by being a late entrant in a foreign market.

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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.

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A) managers overestimate their ability to create value from an acquisition.
B) integration of operations between the two firms takes longer than forecasted.
C) there is a clash between the cultures of the acquired and the acquiring firm.
D) an acquiring firm overpays for the assets of an acquired firm.
E) inadequate pre-acquisition screening has been done.

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A) firms lacking the capital to develop operations overseas
B) firms unwilling to commit substantial financial resources to an unfamiliar market
C) firms requiring tight control of operations for realizing experience curve and location economies
D) firms wanting to explore markets but prohibited from doing so by investment barriers
E) firms with intangible properties with business applications that it does not want to develop itself

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

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