Question 1

Shared ownership agreements can lead to conflicts and battles for control between investing firms.

Accepted Answer

A) True 
 B)False

Question 2

Omega,Inc.,a U.S.-based maker of personal fitness trackers,is not sure about the attractiveness of entering the country of Mattica.Mattica had recently emerged as a democracy after nearly one hundred years of dictatorship.Which of the following types of entry into Mattica would allow Omega,Inc.to learn about the foreign market while limiting the firm's exposure to that market?

Accepted Answer

A)  early entry
B)  small-scale entry
C)  large-scale entry
D)  late entry
E)  rapid entry

Question 3

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 4

In international business,an early entrant to a foreign market may be at a disadvantage relative to a later entrant,if regulations change in a way that diminishes the value of an early entrant's investments.

Accepted Answer

A) True 
 B)False

Question 5

A firm contemplating expansion should choose a foreign market based on an assessment of the nation's long-run profit potential.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following modes of entry into foreign markets can result in a lack of control over quality?

Accepted Answer

A)  exporting
B)  franchising
C)  turnkey projects
D)  wholly owned subsidiaries
E)  joint ventures

Question 7

Small-scale entry into a foreign market makes it difficult to build market share because it

Accepted Answer

A)  necessitates rapid entry into a foreign market.
B)  is associated with a lack of commitment demonstrated by the foreign firm.
C)  leads to escalating strategic commitments.
D)  requires that extra time be spent in analyzing a foreign market.
E)  leads to increased exposure to a foreign market.

Question 8

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 9

Omega,Inc.,a maker of personal fitness trackers (like Fitbit) was the first mover into the country of Malnesia.As the first mover in a new product area,Omega,Inc.had to spend a lot of money educating the population of Malnesia about fitness and tracking one's fitness.In addition,they also had to spend money in developing a distribution channel.The costs that Omega,Inc.incurred in Malnesia as the first mover are called

Accepted Answer

A)  retail costs.
B)  competitive costs.
C)  greenfield costs.
D)  pioneering costs.
E)  moving costs.

Question 10

Which of the following is a disadvantage of greenfield ventures?

Accepted Answer

A)  They have a higher potential for throwing up unpleasant surprises.
B)  It is much more difficult to build an organizational culture from scratch than to change the culture of an existing unit.
C)  Companies find it difficult to avoid falling into the trap of the hubris hypothesis.
D)  It is slower to establish than acquisitions.
E)  A firm does not have the freedom to build the kind of subsidiary that it wants.

Question 11

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

Accepted Answer

The choice between acquisitions and gree...

Question 12

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

Accepted Answer

A)  The franchiser is relieved of many of the costs and risks of opening a foreign market on its own.
B)  The franchiser is allowed to take profits out of one country to support competitive attacks in another.
C)  The franchiser can easily maintain uniform quality across many geographically dispersed franchisees.
D)  Manufacturing concerns can be effectively coordinated across adjacent processes.
E)  The franchiser can support its short-term interests in a country with an unstable economy.

Question 13

When a firm's competitive advantage is based on technological competence,a joint venture is the preferred mode of entry into a foreign market because it reduces the risk of losing control over that competence.

Accepted Answer

A) True 
 B)False

Question 14

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 countries

Question 15

In exporting,problems with local marketing agents can be overcome by

Accepted Answer

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.

Question 16

Which of the following modes of entry is suitable for service firms where the risk of losing control over the management skills or technological know-how is not much of a concern,and where the firms' valuable asset is their brand name?

Accepted Answer

A)  exporting
B)  franchising
C)  licensing
D)  turnkey projects
E)  cross-licensing

Question 17

Why do acquisitions fail sometimes?

Accepted Answer

A)  There is a clash between the cultures of the acquiring and acquired firm.
B)  Acquisitions take a long time to execute.
C)  Acquisitions are easily preempted by making greenfield investments.
D)  The revenue and profit stream generated by an acquisition's resources is usually unknown.
E)  Losses produced by intangible assets outweigh profits from acquired tangible assets.

Question 18

What gives a firm tight control for coordinating a globally dispersed value chain?

Accepted Answer

A)  signing joint-venture agreements
B)  installing manufacturing units in locations with optimal factor conditions
C)  setting up wholly owned marketing subsidiaries
D)  establishing a greenfield venture
E)  using foreign marketing agents

Question 19

What is a wholly owned subsidiary? List its advantages.

Accepted Answer

In a wholly owned subsidiary,the firm ow...

Question 20

Which of the following is a reason why firms often overpay for the assets of an acquired firm?

Accepted Answer

A)  studies supporting the rise of failed companies post acquisitions
B)  evidence of high management turnover post acquisitions
C)  the success rate of acquisitions exceeding that of failures
D)  interest of more than one party in acquiring a particular firm
E)  inevitable clash between cultures of acquiring and acquired firms

Exam 13: Entering Foreign Markets

Correct Answer
verified

When a firm's competitive advantage is based on technological competence,a joint venture is the preferred mode of entry into a foreign market because it reduces the risk of losing control over that competence.

Correct Answer
verified

Which of the following modes of entry into foreign markets can result in a lack of control over quality?

Correct Answer
verified

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 Answer
verified

Small-scale entry into a foreign market makes it difficult to build market share because it

Correct Answer
verified

Why do acquisitions fail sometimes?

Correct Answer
verified

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

Correct Answer
verified

Which of the following is a disadvantage of greenfield ventures?

Correct Answer
verified

In international business,an early entrant to a foreign market may be at a disadvantage relative to a later entrant,if regulations change in a way that diminishes the value of an early entrant's investments.

Correct Answer
verified

Shared ownership agreements can lead to conflicts and battles for control between investing firms.

Correct Answer
verified

Which of the following describes a turnkey project?

Correct Answer
verified

Which of the following modes of entry is suitable for service firms where the risk of losing control over the management skills or technological know-how is not much of a concern,and where the firms' valuable asset is their brand name?

Correct Answer
verified

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

Correct Answer
verified
The choice between acquisitions and gree...
View Answer

A firm contemplating expansion should choose a foreign market based on an assessment of the nation's long-run profit potential.

Correct Answer
verified

What is a wholly owned subsidiary? List its advantages.

Correct Answer
verified
In a wholly owned subsidiary,the firm ow...
View Answer

Which of the following is a reason why firms often overpay for the assets of an acquired firm?

Correct Answer
verified

In exporting,problems with local marketing agents can be overcome by

Correct Answer
verified

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

Correct Answer
verified

What gives a firm tight control for coordinating a globally dispersed value chain?

Correct Answer
verified

Correct Answer
verified

Exam 13: Entering Foreign Markets

Correct AnswerverifiedShow Answer

When a firm's competitive advantage is based on technological competence,a joint venture is the preferred mode of entry into a foreign market because it reduces the risk of losing control over that competence.

Correct AnswerverifiedShow Answer

Which of the following modes of entry into foreign markets can result in a lack of control over quality?

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

Small-scale entry into a foreign market makes it difficult to build market share because it

Correct AnswerverifiedShow Answer

Why do acquisitions fail sometimes?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of greenfield ventures?

Correct AnswerverifiedShow Answer

In international business,an early entrant to a foreign market may be at a disadvantage relative to a later entrant,if regulations change in a way that diminishes the value of an early entrant's investments.

Correct AnswerverifiedShow Answer

Shared ownership agreements can lead to conflicts and battles for control between investing firms.

Correct AnswerverifiedShow Answer

Which of the following describes a turnkey project?

Correct AnswerverifiedShow Answer

Which of the following modes of entry is suitable for service firms where the risk of losing control over the management skills or technological know-how is not much of a concern,and where the firms' valuable asset is their brand name?

Correct AnswerverifiedShow Answer

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

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

A firm contemplating expansion should choose a foreign market based on an assessment of the nation's long-run profit potential.

Correct AnswerverifiedShow Answer

What is a wholly owned subsidiary? List its advantages.

Correct AnswerverifiedIn a wholly owned subsidiary,the firm ow...View AnswerShow Answer

Which of the following is a reason why firms often overpay for the assets of an acquired firm?

Correct AnswerverifiedShow Answer

In exporting,problems with local marketing agents can be overcome by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What gives a firm tight control for coordinating a globally dispersed value chain?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The choice between acquisitions and gree...
View Answer

Correct Answer
verified

Correct Answer
verified
In a wholly owned subsidiary,the firm ow...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified