Question 1

A firm that owns the activities performed in a single stage of its value chain is demonstrating ________.

Accepted Answer

A)  centralization 
B)  decentralization 
C)  horizontal integration 
D)  reverse integration 
A)  centralization 
B)  decentralization 
C)  horizontal integration 
D)  reverse integration

Question 2

Describe the four primary challenges faced by retailers when they expand overseas. Provide examples of mistakes made by retailers in foreign markets.

Accepted Answer

1. Culture and language are a significan

Question 3

Economies of scale are decreases in per-unit cost of production resulting from increasing output.

Accepted Answer

A) True 
 B)False

Question 4

The strategic purpose behind firms competing with rivals in their own market is to force them to expend resources and thus, defend the firm's own market.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a characteristic of project-based, nonequity ventures?

Accepted Answer

A)  a broad scope of product development 
B)  a specific agenda and timeframe 
C)  long-term sharing of resources 
D)  formation of a new legal entity 
A)  a broad scope of product development 
B)  a specific agenda and timeframe 
C)  long-term sharing of resources 
D)  formation of a new legal entity

Question 6

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 most likely supports the decision by Ciao managers to build a plant in Russia?

Accepted Answer

A)  The Russian government is transparent and totally corruption-free. 
B)  Ciao would be able to take advantage of the North American Free Trade Agreement. 
C)  Intellectual property lawsuits are common in Russia. 
D)  Land and construction costs are relatively inexpensive in Russia. 
A)  The Russian government is transparent and totally corruption-free. 
B)  Ciao would be able to take advantage of the North American Free Trade Agreement. 
C)  Intellectual property lawsuits are common in Russia. 
D)  Land and construction costs are relatively inexpensive in Russia.

Question 7

By establishing a physical presence inside a country or an economic bloc, the foreign company obtains the same advantages as local firms.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following terms is used to refer to a focal firm's partial ownership of an existing firm?

Accepted Answer

A)  turnkey operation 
B)  greenfield investment 
C)  direct investment 
D)  equity participation 
A)  turnkey operation 
B)  greenfield investment 
C)  direct investment 
D)  equity participation

Question 9

FDI is also known as foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 10

How does the acquisition of a foreign company most likely benefit a focal firm in the foreign market?

Accepted Answer

A)  The focal firm can extend its market reach through readily available distribution networks. 
B)  The MNE avoids domestic and foreign taxation, which enables the firm to invest more resources in the foreign market. 
C)  Firm managers can reduce their workload by ensuring that all decision-making responsibilities are taken up by foreign managers. 
D)  The firm eliminates the need to train its own employees by utilizing the workers previously hired by the foreign firm. 
A)  The focal firm can extend its market reach through readily available distribution networks. 
B)  The MNE avoids domestic and foreign taxation, which enables the firm to invest more resources in the foreign market. 
C)  Firm managers can reduce their workload by ensuring that all decision-making responsibilities are taken up by foreign managers. 
D)  The firm eliminates the need to train its own employees by utilizing the workers previously hired by the foreign firm.

Question 11

Project-based, nonequity ventures are difficult to set up.

Accepted Answer

A) True 
 B)False

Question 12

A firm that pursues foreign direct investment to take advantage of government incentives is demonstrating a(n) ________ motive.

Accepted Answer

A)  efficiency-seeking 
B)  novelty-seeking 
C)  asset-seeking 
D)  market-seeking 
A)  efficiency-seeking 
B)  novelty-seeking 
C)  asset-seeking 
D)  market-seeking

Question 13

Vertical integration is 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.

Accepted Answer

A) True 
 B)False

Question 14

Discuss resource and asset-seeking motives for FDI. Why might a company favor acquisition over greenfield investment as an FDI approach?

Accepted Answer

Firms frequently want to acquire product

Question 15

The challenges faced due to FDI differ from country to country.

Accepted Answer

A) True 
 B)False

Question 16

Discuss three reasons for firms seeking new market opportunities. Illustrate each with an example of a firm that sought a new foreign market for that particular motive.

Accepted Answer

a. Gain access to new markets or opportu

Question 17

Tariff and other trade barriers for exports and FDI are identical.

Accepted Answer

A) True 
 B)False

Question 18

Compared to small firms, large companies usually can access capital at lower cost.

Accepted Answer

A) True 
 B)False

Question 19

Firms often follow their key customers abroad to preempt other vendors from serving them.

Accepted Answer

A) True 
 B)False

Question 20

Describe the advantages of international collaborative ventures, and describe the potential risks of collaboration.

Accepted Answer

An international collaborative venture i

A firm that owns the activities performed in a single stage of its value chain is demonstrating ________.

Describe the four primary challenges faced by retailers when they expand overseas. Provide examples of mistakes made by retailers in foreign markets.

Economies of scale are decreases in per-unit cost of production resulting from increasing output.

The strategic purpose behind firms competing with rivals in their own market is to force them to expend resources and thus, defend the firm's own market.

Which of the following is a characteristic of project-based, nonequity ventures?

By establishing a physical presence inside a country or an economic bloc, the foreign company obtains the same advantages as local firms.

Which of the following terms is used to refer to a focal firm's partial ownership of an existing firm?

FDI is also known as foreign direct investment.

How does the acquisition of a foreign company most likely benefit a focal firm in the foreign market?

Project-based, nonequity ventures are difficult to set up.

A firm that pursues foreign direct investment to take advantage of government incentives is demonstrating a(n) ________ motive.

Vertical integration is 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.

Discuss resource and asset-seeking motives for FDI. Why might a company favor acquisition over greenfield investment as an FDI approach?

The challenges faced due to FDI differ from country to country.

Discuss three reasons for firms seeking new market opportunities. Illustrate each with an example of a firm that sought a new foreign market for that particular motive.

Tariff and other trade barriers for exports and FDI are identical.

Compared to small firms, large companies usually can access capital at lower cost.

Firms often follow their key customers abroad to preempt other vendors from serving them.

Describe the advantages of international collaborative ventures, and describe the potential risks of collaboration.

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance in International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Financial Management and Accounting in the Global Firm

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Global Sourcing

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters

Exam 14: Foreign Direct Investment and Collaborative Ventures

A firm that owns the activities performed in a single stage of its value chain is demonstrating ________.

Describe the four primary challenges faced by retailers when they expand overseas. Provide examples of mistakes made by retailers in foreign markets.

Economies of scale are decreases in per-unit cost of production resulting from increasing output.

The strategic purpose behind firms competing with rivals in their own market is to force them to expend resources and thus, defend the firm's own market.

Which of the following is a characteristic of project-based, nonequity ventures?

By establishing a physical presence inside a country or an economic bloc, the foreign company obtains the same advantages as local firms.

Which of the following terms is used to refer to a focal firm's partial ownership of an existing firm?

FDI is also known as foreign direct investment.

How does the acquisition of a foreign company most likely benefit a focal firm in the foreign market?

Project-based, nonequity ventures are difficult to set up.

A firm that pursues foreign direct investment to take advantage of government incentives is demonstrating a(n) ________ motive.

Vertical integration is 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.

Discuss resource and asset-seeking motives for FDI. Why might a company favor acquisition over greenfield investment as an FDI approach?

The challenges faced due to FDI differ from country to country.

Discuss three reasons for firms seeking new market opportunities. Illustrate each with an example of a firm that sought a new foreign market for that particular motive.

Tariff and other trade barriers for exports and FDI are identical.

Compared to small firms, large companies usually can access capital at lower cost.

Firms often follow their key customers abroad to preempt other vendors from serving them.

Describe the advantages of international collaborative ventures, and describe the potential risks of collaboration.

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance in International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Financial Management and Accounting in the Global Firm

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Global Sourcing

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters