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| 1 | |
The three decisions that a firm contemplating foreign expansion must make are which markets to enter, when to enter those markets, and on what scale. |
| | A) | True |
| | B) | False |
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| 2 | |
Other things being equal, the benefit, cost, risk trade-off is likely to be most favourable in the case of politically stable developed and developing nations that have free market systems, and where there is a dramatic upsurge in either inflation rates or private sector debt. |
| | A) | True |
| | B) | False |
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| 3 | |
Tariff barriers can make exporting uneconomical. |
| | A) | True |
| | B) | False |
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| 4 | |
One advantage of exporting is that it helps a firm achieve experience curve and location economies. |
| | A) | True |
| | B) | False |
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| 5 | |
Because it exposes the firm to unacceptable political and/or economic risks for a longer-term, a turnkey strategy is more risky than the conventional FDI. |
| | A) | True |
| | B) | False |
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| 6 | |
Under a franchising 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 license some of its valuable know-how to the firm. |
| | A) | True |
| | B) | False |
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| 7 | |
Well known franchiser “Boston Pizza” originated in Boston. |
| | A) | True |
| | B) | False |
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| 8 | |
Quality control is a more significant disadvantage of franchising. |
| | A) | True |
| | B) | False |
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| 9 | |
The fact that it gives a firm the tight control over subsidiaries whereby realizing experience curve and location economies is a significant advantage of a joint venture entry mode. |
| | A) | True |
| | B) | False |
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| 10 | |
The greater the pressures for cost reductions are, the more likely a firm will want to pursue some combination of exporting and wholly owned subsidiaries. |
| | A) | True |
| | B) | False |
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| 11 | |
The hubris hypothesis of why acquisitions fail postulates that top management underestimates their ability to create value from an acquisition, so they do not put as much effort as they should to make the acquisition succeed. |
| | A) | True |
| | B) | False |
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| 12 | |
If a firm is seeking to enter 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 a green-field venture. |
| | A) | True |
| | B) | False |
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