Question 1

A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label.

Accepted Answer

A) True 
 B)False

Question 2

When consumers buy counterfeit goods, payments accrue to the firm that invented the product and not to illicit enterprises.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements is true about international franchisors?

Accepted Answer

A)  Entry into numerous foreign markets is tough and costly. 
B)  Maintaining control over franchisee is seldom difficult. 
C)  Franchisors need to invest substantial capital. 
D)  Franchisees may use franchise knowledge to start a competing business. 
A)  Entry into numerous foreign markets is tough and costly. 
B)  Maintaining control over franchisee is seldom difficult. 
C)  Franchisors need to invest substantial capital. 
D)  Franchisees may use franchise knowledge to start a competing business.

Question 4

Wonder Cat Licensing (Scenario)
Wonder Cat is a popular, new cartoon series created by the U.S-based All Cartoon Channel (ACC). Currently, the only Wonder Cat item available for sale are shirts that are sold exclusively through the ACC Web site. The cartoon series is a big hit in China, and as a result ACC has been approached by a Chinese firm about a licensing agreement. ACC executives are considering the pros and cons of such an agreement before making any final decisions.
-Which of the following questions would be more important to evaluate before ACC enters a licensing agreement with the Chinese firm?

Accepted Answer

A)  What other cartoon characters in the U.S. have been licensed to Chinese firms? 
B)  Should the Wonder Cat shirts that were available on the firm's Web site be removed from sale? 
C)  Will the Wonder Cat products made by the Chinese firm be available for sale on the ACC Web site? 
D)  How much control will ACC be able to maintain over the use of the Wonder Cat brand? 
A)  What other cartoon characters in the U.S. have been licensed to Chinese firms? 
B)  Should the Wonder Cat shirts that were available on the firm's Web site be removed from sale? 
C)  Will the Wonder Cat products made by the Chinese firm be available for sale on the ACC Web site? 
D)  How much control will ACC be able to maintain over the use of the Wonder Cat brand?

Question 5

Which of the following is an advantage of franchising to the franchisor?

Accepted Answer

A)  It is easier to maintain control over a franchisee. 
B)  It is a low-risk, low-cost entry strategy. 
C)  There is seldom any risk of franchisees becoming future competitors. 
D)  There is seldom requirement for the franchisor to become familiar with foreign laws and regulations. 
A)  It is easier to maintain control over a franchisee. 
B)  It is a low-risk, low-cost entry strategy. 
C)  There is seldom any risk of franchisees becoming future competitors. 
D)  There is seldom requirement for the franchisor to become familiar with foreign laws and regulations.

Question 6

The reputation of a licensor will be jeopardized by a licensing agreement if the licensee ________.

Accepted Answer

A)  markets competing products for significantly lower prices 
B)  uses the licensing asset to create products of poor quality 
C)  refuses to pay the agreed upon royalties to the licensor 
D)  does not guarantee future expansion in the market 
A)  markets competing products for significantly lower prices 
B)  uses the licensing asset to create products of poor quality 
C)  refuses to pay the agreed upon royalties to the licensor 
D)  does not guarantee future expansion in the market

Question 7

Which of the following countries is home to the largest number of franchisors?

Accepted Answer

A)  United States 
B)  Britain 
C)  China 
D)  Canada 
A)  United States 
B)  Britain 
C)  China 
D)  Canada

Question 8

Which of the following is true about cross-border contractual relationship?

Accepted Answer

A)  It is a more visible strategy than FDI and draws a lot of criticism from the local market. 
B)  They are more susceptible to volatility and risk compared to FDI. 
C)  A local firm allows the focal firm to blend into the local market, attracting less attention. 
D)  Focal firms use contractual relationships as an advanced entry strategy in foreign markets. 
A)  It is a more visible strategy than FDI and draws a lot of criticism from the local market. 
B)  They are more susceptible to volatility and risk compared to FDI. 
C)  A local firm allows the focal firm to blend into the local market, attracting less attention. 
D)  Focal firms use contractual relationships as an advanced entry strategy in foreign markets.

Question 9

A collective mark ________.

Accepted Answer

A)  is intended to improve the product's aesthetics and usability as well as increase its production efficiency, performance, or marketability 
B)  protects original works of authorship, giving the creator the exclusive right to reproduce the work, display and perform it publicly, and authorize others to perform these activities 
C)  is a distinctive design, symbol, logo, word, or series of words placed on a product label 
D)  is a logo belonging to an organization whose members use it to identify themselves and associate their products with a level of quality or accuracy, geographical origin, or other positive characteristic 
A)  is intended to improve the product's aesthetics and usability as well as increase its production efficiency, performance, or marketability 
B)  protects original works of authorship, giving the creator the exclusive right to reproduce the work, display and perform it publicly, and authorize others to perform these activities 
C)  is a distinctive design, symbol, logo, word, or series of words placed on a product label 
D)  is a logo belonging to an organization whose members use it to identify themselves and associate their products with a level of quality or accuracy, geographical origin, or other positive characteristic

Question 10

Big Boy Burgers (Scenario)
Big Boy Burgers (BBB) is an American fast food restaurant chain that has franchises around the world. Recently, BBB managers have been concerned about protecting the firm's intellectual property, which includes the recipes for its unique burger sauces and specialty burger buns. Although BBB has never experienced a theft of intellectual property, the firm's managers feel BBB should be more cautious. Managers are meeting with security and legal experts to discuss the options available to the firm which would protect BBB from future international problems.
-Which of the following statements most likely supports BBB legal experts fully investigating the intellectual property laws of each nation in which BBB has franchises?

Accepted Answer

A)  Intellectual property laws and its enforcement varies from country to country. 
B)  Patents and trademarks granted in one country will transfer to another country. 
C)  TRIPS protects the intellectual property of firms doing business in any nation. 
D)  Nations with numerous IPR violators are beginning to comply with the WTO. 
A)  Intellectual property laws and its enforcement varies from country to country. 
B)  Patents and trademarks granted in one country will transfer to another country. 
C)  TRIPS protects the intellectual property of firms doing business in any nation. 
D)  Nations with numerous IPR violators are beginning to comply with the WTO.

Question 11

When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________.

Accepted Answer

A)  industrial design rights 
B)  franchising 
C)  joint venture 
D)  equity venture 
A)  industrial design rights 
B)  franchising 
C)  joint venture 
D)  equity venture

Question 12

Under a build-operate-transfer (BOT) arrangement, a firm or consortium of firms contracts to build a major facility abroad and then transfers ownership to the project sponsor, typically the host-country government or public utility.

Accepted Answer

A) True 
 B)False

Question 13

Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract.

Accepted Answer

A) True 
 B)False

Question 14

Describe three challenges faced by professional service firms when they internationalize.

Accepted Answer

Professional service firms encounter thr

Question 15

In a licensing agreement, the licensee provides ________.

Accepted Answer

A)  the rights to use its industrial design 
B)  intellectual property, technical information and assistance 
C)  a combination of down-payment plus royalty 
D)  the know-how and supporting products such as, raw materials and components 
A)  the rights to use its industrial design 
B)  intellectual property, technical information and assistance 
C)  a combination of down-payment plus royalty 
D)  the know-how and supporting products such as, raw materials and components

Question 16

Which of the following is a disadvantage of licensing for technological firms?

Accepted Answer

A)  It is not appropriate for entering markets that pose substantial country risk. 
B)  It requires high capital investment and the presence of the technological firm in the foreign market. 
C)  It restricts flexibility in the foreign market due to the technological firm's ownership of key assets in the target market. 
D)  It increases the risk of creating a future competitor. 
A)  It is not appropriate for entering markets that pose substantial country risk. 
B)  It requires high capital investment and the presence of the technological firm in the foreign market. 
C)  It restricts flexibility in the foreign market due to the technological firm's ownership of key assets in the target market. 
D)  It increases the risk of creating a future competitor.

Question 17

Professional service firms, such as PriceWaterhouseCooper, often enter large international markets through FDI but usually use ________ to enter small markets.

Accepted Answer

A)  equity-based collaborative ventures 
B)  affiliates 
C)  BOT arrangement 
D)  turnkey contracting 
A)  equity-based collaborative ventures 
B)  affiliates 
C)  BOT arrangement 
D)  turnkey contracting

Question 18

In a master franchising agreement, the master franchisee has the right to subfranchise to other independent businesses and thus assume the role of the local franchisor.

Accepted Answer

A) True 
 B)False

Question 19

Leasing is especially beneficial to ________.

Accepted Answer

A)  advanced economies 
B)  economies with high PPP 
C)  First World countries 
D)  developing economies 
A)  advanced economies 
B)  economies with high PPP 
C)  First World countries 
D)  developing economies

Question 20

Which of the following is characteristic of cross-border contractual relationships?

Accepted Answer

A)  When compared to FDI, they are less susceptible to volatility and risk, and tend to bring both parties a predictable stream of revenue. 
B)  The focal firm attains maximum control by establishing a physical presence, and ownership of key assets, in the foreign market. 
C)  It attracts high attention and criticism for the focal firm because of the local perception of foreign entities. 
D)  They are governed by a contract that provides the focal firm with no control over the foreign partner. 
A)  When compared to FDI, they are less susceptible to volatility and risk, and tend to bring both parties a predictable stream of revenue. 
B)  The focal firm attains maximum control by establishing a physical presence, and ownership of key assets, in the foreign market. 
C)  It attracts high attention and criticism for the focal firm because of the local perception of foreign entities. 
D)  They are governed by a contract that provides the focal firm with no control over the foreign partner.

A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label.

When consumers buy counterfeit goods, payments accrue to the firm that invented the product and not to illicit enterprises.

Which of the following statements is true about international franchisors?

Which of the following is an advantage of franchising to the franchisor?

The reputation of a licensor will be jeopardized by a licensing agreement if the licensee ________.

Which of the following countries is home to the largest number of franchisors?

Which of the following is true about cross-border contractual relationship?

A collective mark ________.

When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________.

Under a build-operate-transfer (BOT) arrangement, a firm or consortium of firms contracts to build a major facility abroad and then transfers ownership to the project sponsor, typically the host-country government or public utility.

Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract.

Describe three challenges faced by professional service firms when they internationalize.

In a licensing agreement, the licensee provides ________.

Which of the following is a disadvantage of licensing for technological firms?

Professional service firms, such as PriceWaterhouseCooper, often enter large international markets through FDI but usually use ________ to enter small markets.

In a master franchising agreement, the master franchisee has the right to subfranchise to other independent businesses and thus assume the role of the local franchisor.

Leasing is especially beneficial to ________.

Which of the following is characteristic of cross-border contractual relationships?

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

Organizational Participants That Make International Business Happen

The Cultural Environment of International Business

Ethics and International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention in International Business

Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Countertrade

Foreign Direct Investment and Collaborative Ventures

Global Sourcing

Marketing in the Global Firm

Human Resource Management in the Global Firm

Financial Management and Accounting in the Global Firm

Filters

Exam 16: Licensing, Franchising, and Other Contractual Strategies

A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label.

When consumers buy counterfeit goods, payments accrue to the firm that invented the product and not to illicit enterprises.

Which of the following statements is true about international franchisors?

Which of the following is an advantage of franchising to the franchisor?

The reputation of a licensor will be jeopardized by a licensing agreement if the licensee ________.

Which of the following countries is home to the largest number of franchisors?

Which of the following is true about cross-border contractual relationship?

A collective mark ________.

When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________.

Under a build-operate-transfer (BOT) arrangement, a firm or consortium of firms contracts to build a major facility abroad and then transfers ownership to the project sponsor, typically the host-country government or public utility.

Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract.

Describe three challenges faced by professional service firms when they internationalize.

In a licensing agreement, the licensee provides ________.

Which of the following is a disadvantage of licensing for technological firms?

Professional service firms, such as PriceWaterhouseCooper, often enter large international markets through FDI but usually use ________ to enter small markets.

In a master franchising agreement, the master franchisee has the right to subfranchise to other independent businesses and thus assume the role of the local franchisor.

Leasing is especially beneficial to ________.

Which of the following is characteristic of cross-border contractual relationships?

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

Organizational Participants That Make International Business Happen

The Cultural Environment of International Business

Ethics and International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention in International Business

Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Countertrade

Foreign Direct Investment and Collaborative Ventures

Global Sourcing

Marketing in the Global Firm

Human Resource Management in the Global Firm

Financial Management and Accounting in the Global Firm

Filters