Exam 14: Foreign Direct Investment and Collaborative Ventures

FDI is the most taxing entry strategy that a firm can choose.

Which of the following is the most likely motive behind firms in the mining industry wanting to enter new foreign markets?

Which of the following represents an infrastructural factor that firms must consider when selecting an FDI location?

Ciao Manufacturing Location (Scenario) An Italian car company, Ciao, has made plans to expand its operations by building a manufacturing facility in a foreign market. Ciao has been very successful selling its small, economical, and stylish cars in Italy and Spain, and firm managers believe that Ciao cars will be equally profitable in other markets. Ciao managers are trying to determine whether Canada or Russia would be the best location for a new automobile manufacturing facility. -Which of the following should be considered in the decision regarding where to build a new Ciao plant?

International Business Class (Scenario) Students in Professor Manning's international business class have been assigned the task of explaining the different types of FDI. Professor Manning formed groups among students. The groups are to research their assigned topic and present their information to the class using examples of real-world firms for illustration. Jessica Hanson is the leader of Group A; Manu Patel is the leader of Group B; and Mario Witherspoon is the leader of Group C. -During her presentation, Jessica describes how two automakers joined forces and formed a separate firm by pooling their assets. Which of the following topics was most likely assigned to Group A?

Governments encourage inward FDI because it transfers skill and technologies.

Cross-licensing agreements are a type of project-based, nonequity venture in which the partners agree to allow access to licensed intellectual property developed by the other on preferential terms.

A joint venture is a form of collaboration between two or more firms to create a new, jointly owned enterprise.

ABC Appliance (Scenario) The ABC Appliance Corporation is a Florida-based manufacturer of refrigerators, dishwashers, and other large household appliances. ABC takes advantage of NAFTA, and as a result, the firm has loyal customers across North America. ABC managers would like to expand into the Asian market, but are unsure of the best way to do so. ABC managers are meeting to discuss various possibilities for entering the Asian market. -Which of the following should most likely be considered in making the decision to expand ABC operations into the Asian market?

Equity joint ventures have the simplest management structure.

While franchising facilitates rapid internationalization, compared to FDI, it affords the firm less control over its foreign operations.

An arrangement whereby the firm owns, or seeks to own, multiple stages of a value chain for producing, selling, and delivering a product or service is termed as ________.

International expansion invariably results in a decrease in a firm's economies of scale.

One of the key advantages to an equity joint venture is that the management structure is very simple, which allows for easy adjustments and modifications.

A consortium is defined as ________.

Firms that engage in FDI avoid problematic trade barriers because the physical presence of a foreign firm earns it the same privileges as a local firm.

Which of the following best explains why some service industry firms most likely enter foreign markets through FDI?

Discuss four strategies that managers can employ in order to increase the chances of a successful collaborative venture.

Which of the following must be considered in selecting foreign direct investment locations?

Collaborative ventures benefit SMEs by providing them with ________.