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| 1 | |
The time, effort, and money spent to learn the rules of the game in a foreign business system are a form of pioneering cost. |
| | A) | True |
| | B) | False |
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| 2 | |
It is impossible for "late movers" to compete once the early entrants have become well established. |
| | A) | True |
| | B) | False |
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| 3 | |
Firms using exporting as a means of serving a foreign market avoid the costs of setting up manufacturing operations in the host country and may be in a position to achieve experience curve and location economies. |
| | A) | True |
| | B) | False |
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| 4 | |
Turnkey operations are popular because they completely eliminate the risk of creating a competitor. |
| | A) | True |
| | B) | False |
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| 5 | |
A key advantage of a greenfield investment is that it gives the firm the ability to build the type of operation that it wants. |
| | A) | True |
| | B) | False |
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| 6 | |
A firm considering foreign expansion must make three basic decisions. Which of the following is not one of those three? |
| | A) | Which markets to enter? |
| | B) | Are product lines wide and deep enough with sufficient inventories? |
| | C) | When should markets be entered? |
| | D) | On what scale should it consider entering? |
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| 7 | |
When deciding which foreign markets to enter, ultimately the decision must be based on |
| | A) | the cultural match between the firm and the foreign market. |
| | B) | the strategic intentions of the firm's competitors. |
| | C) | legal restrictions and trade barriers. |
| | D) | an assessment of the nation's long-run profit potential. |
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| 8 | |
A company that enters a foreign market before other foreign firms will be able to capitalize on |
| | A) | economies of scale |
| | B) | pioneering costs |
| | C) | first mover advantages |
| | D) | early entrant advantages |
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| 9 | |
The scale of entry depends on strategic commitment. Which of the following is not true about a strategic commitment? |
| | A) | A strategic commitment has a long-term impact and is difficult to reverse. |
| | B) | A strategic commitment such as a rapid, large-scale entry can affect competitors and the market as a whole. |
| | C) | The strategic commitment will not affect the firms strategic flexibility as long as it is successful. |
| | D) | A strategic commitment is distinct from a small-scale, slow entry. |
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| 10 | |
In _______________________, a firm grants to rights to intangible property to another entity for a specified period and receives a royalty fee in return. |
| | A) | licensing |
| | B) | franchising |
| | C) | intellectual property agreements |
| | D) | turnkey projects |
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| 11 | |
An arrangement whereby one firm sells a trademark to another company and insists that the buying company agree to strict rules as to how to do business is a ______ arrangement. |
| | A) | franchising |
| | B) | a joint venture |
| | C) | a strategic alliance |
| | D) | a turnkey operation |
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| 12 | |
If a company wants to share the development costs and/or risks of opening a foreign market, the firms should choose |
| | A) | a joint venture |
| | B) | a turnkey operation |
| | C) | exporting |
| | D) | licensing |
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| 13 | |
By establishing a ______ in a foreign market, a firm can control local marketing, sales, and service while simultaneously capitalizing on location advantages. |
| | A) | a turnkey project |
| | B) | a joint venture with a local enterprise |
| | C) | licensing arrangement |
| | D) | a wholly owned subsidiary |
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| 14 | |
Which of the following characteristics is not an issue when selecting an entry mode into a foreign market: |
| | A) | knowledge and know-how |
| | B) | development costs and risks |
| | C) | exchange rates |
| | D) | ability to realize location and experience economies |
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| 15 | |
Firms often expand internationally to gain greater returns from their _____________, transferring the skills and related products to foreign markets where indigenous competitors lack those skills. |
| | A) | processes |
| | B) | intellectual property |
| | C) | people skills and assets |
| | D) | core competencies |
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| 16 | |
The greater the pressures for cost reductions, the more likely a firm will want to pursue: |
| | A) | some combination of exporting and wholly owned subsidiaries |
| | B) | joint ventures |
| | C) | licensing |
| | D) | franchising |
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| 17 | |
If a firm wants to quickly establish a sizeable presence in a foreign market, the firm should consider |
| | A) | exporting |
| | B) | a joint venture |
| | C) | a greenfield investment |
| | D) | an acquisition |
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| 18 | |
Acquisitions fail for all of the following reasons except |
| | A) | the acquiring firm often overpays for the assets of the acquired firm |
| | B) | there is a clash of cultures between the acquiring and the acquired firm |
| | C) | anticipated synergies prove to be more significant than anticipated |
| | D) | there is inadequate pre-acquisition screening |
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| 19 | |
In general, a greenfield investment will be preferred when: |
| | A) | there are strict environmental standards in the host country. |
| | B) | there are established competitors in the host country market. |
| | C) | when the market seems attractive but there are no incumbent firms to be acquired. |
| | D) | embedded competencies, skills, routines and cultures are not at issue. |
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| 20 | |
_______________ refer(s) to cooperative agreements between potential or actual competitors. |
| | A) | Licensing agreements |
| | B) | Franchising agreements |
| | C) | Collusion |
| | D) | Strategic alliances |
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| 21 | |
Which of the following is not considered an advantage of strategic alliances? |
| | A) | Strategic alliances facilitate entry into a foreign market. |
| | B) | Strategic alliances do not take much management time and attention once they are set up. |
| | C) | Strategic alliances allow firms to share costs and risks. |
| | D) | Strategic alliances bring together complementary skills and assets. |
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| 22 | |
A good strategic alliance partner should have all of the following characteristics except |
| | A) | shared vision |
| | B) | the capabilities that the firm lacks |
| | C) | behavior that is not opportunistic |
| | D) | being a relative stranger to the firm |
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| 23 | |
A good strategic alliance is structured so that |
| | A) | clear policies are developed to keep employees from partners from sharing too much. |
| | B) | safeguards against opportunism are build into the agreement. |
| | C) | technology can be shared openly. |
| | D) | the originating firm maintains a strong and dominant role. |
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| 24 | |
Building interpersonal relationships between managers of firms that are involved in a strategic alliance is known as |
| | A) | interpersonal value |
| | B) | relational capital |
| | C) | corporate culture |
| | D) | interpersonal harmony |
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| 25 | |
A company that is concerned that technology that should remain proprietary will be transferred to a strategic alliance partner should do all of the following except |
| | A) | wall off critical technology |
| | B) | establish contractual safeguards |
| | C) | seek credible commitments |
| | D) | avoid cross licensing agreements |
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