Question 1

Why should a firm be cautious about entering a licensing agreement?

Accepted Answer

In a licensing agreement, the licensor g

Question 2

Which of the following statements is true of strategic alliances?

Accepted Answer

A)  The fixed costs and associated risks of developing new products or processes are borne by the alliance partner. 
B)  They are a way to bring together complementary skills and assets that both companies develop. 
C)  They limit the entry of firms into foreign markets. 
D)  A firm risks giving away technological know-how and market access to its alliance partner. 
A)  The fixed costs and associated risks of developing new products or processes are borne by the alliance partner. 
B)  They are a way to bring together complementary skills and assets that both companies develop. 
C)  They limit the entry of firms into foreign markets. 
D)  A firm risks giving away technological know-how and market access to its alliance partner.

Question 3

________ is a way to bring together complementary skills and assets that neither company could easily develop on its own.

Accepted Answer

A)  An alliance 
B)  A turnkey contract 
C)  A wholly owned subsidiary 
D)  A licensing agreement 
A)  An alliance 
B)  A turnkey contract 
C)  A wholly owned subsidiary 
D)  A licensing agreement

Question 4

The valuable asset of firms, whose competitive advantage is based on management know-how, is their

Accepted Answer

A)  top management staff. 
B)  USP. 
C)  advertisements. 
D)  brand name. 
A)  top management staff. 
B)  USP. 
C)  advertisements. 
D)  brand name.

Question 5

What is true of acquisitions?

Accepted Answer

A)  It is a time-consuming process. 
B)  Managers view them as more risky than greenfield ventures. 
C)  They give the firm a much greater ability to build the kind of subsidiary company that it wants. 
D)  In many cases, firms make acquisitions to preempt their competitors. 
A)  It is a time-consuming process. 
B)  Managers view them as more risky than greenfield ventures. 
C)  They give the firm a much greater ability to build the kind of subsidiary company that it wants. 
D)  In many cases, firms make acquisitions to preempt their competitors.

Question 6

Which of the following is true of wholly owned subsidiaries?

Accepted Answer

A)  It is the least expensive method of serving a foreign market from a capital investment standpoint. 
B)  It the most feasible entry mode due to the political considerations. 
C)  It is required if a firm is trying to realize location and experience curve economies. 
D)  It is particularly useful where FDI is limited by host-government regulations. 
A)  It is the least expensive method of serving a foreign market from a capital investment standpoint. 
B)  It the most feasible entry mode due to the political considerations. 
C)  It is required if a firm is trying to realize location and experience curve economies. 
D)  It is particularly useful where FDI is limited by host-government regulations.

Question 7

Which of the following is true of licensing?

Accepted Answer

A)  Licensing is used when a firm possesses some tangible property but does not want to pursue a potential application itself. 
B)  The firm does not have to bear the development costs and risks associated with opening a foreign market. 
C)  It is an attractive option when a firm is interested in pursuing a foreign market and is ready to commit substantial resources to a foreign market. 
D)  It is an attractive option for firms that have the capital to open overseas markets. 
A)  Licensing is used when a firm possesses some tangible property but does not want to pursue a potential application itself. 
B)  The firm does not have to bear the development costs and risks associated with opening a foreign market. 
C)  It is an attractive option when a firm is interested in pursuing a foreign market and is ready to commit substantial resources to a foreign market. 
D)  It is an attractive option for firms that have the capital to open overseas markets.

Question 8

By producing its product in a centralized location, licensing limits a firm's ability to realize experience curve and location economies.

Accepted Answer

A) True 
 B)False

Question 9

If a firm can realize location economies by moving production elsewhere, it should avoid

Accepted Answer

A)  exporting. 
B)  turnkey contracts. 
C)  licensing. 
D)  wholly owned subsidiaries. 
A)  exporting. 
B)  turnkey contracts. 
C)  licensing. 
D)  wholly owned subsidiaries.

Question 10

Firms entering a market via a ________ must bear all the costs and risks associated with the venture.

Accepted Answer

A)  licensing contract 
B)  joint venture 
C)  turnkey contract 
D)  wholly owned subsidiary 
A)  licensing contract 
B)  joint venture 
C)  turnkey contract 
D)  wholly owned subsidiary

Question 11

A strategic commitment can be reversed by the top management at will.

Accepted Answer

A) True 
 B)False

Question 12

If a firm's core competence is proprietary technological knowledge, a joint venture is preferable.

Accepted Answer

A) True 
 B)False

Question 13

When determining the value of a foreign market, an international firm must consider both its products and the competition.

Accepted Answer

A) True 
 B)False

Question 14

When an exporting firm finds that its local agent is also carrying competitors' products, the firm may switch to a ________ to handle local marketing, sales, and service.

Accepted Answer

A)  wholly owned subsidiary 
B)  franchising arrangement 
C)  turnkey operation 
D)  licensing agreement 
A)  wholly owned subsidiary 
B)  franchising arrangement 
C)  turnkey operation 
D)  licensing agreement

Question 15

Franchising enables a firm to quickly build a global presence.

Accepted Answer

A) True 
 B)False

Question 16

Firms pursuing global standardization or transnational strategies tend to prefer ________ arrangements.

Accepted Answer

A)  wholly owned subsidiary 
B)  franchising 
C)  joint-venture 
D)  licensing 
A)  wholly owned subsidiary 
B)  franchising 
C)  joint-venture 
D)  licensing

Question 17

Brand names such as Starbucks and Subway are well protected by international laws pertaining to trademarks.

Accepted Answer

A) True 
 B)False

Question 18

Switching costs may

Accepted Answer

A)  drive early entrants out of the market. 
B)  make it easy for later entrants to win business. 
C)  make it difficult for later entrants to win business. 
D)  give later entrants a cost advantage over early entrants. 
A)  drive early entrants out of the market. 
B)  make it easy for later entrants to win business. 
C)  make it difficult for later entrants to win business. 
D)  give later entrants a cost advantage over early entrants.

Question 19

Which of the following is true of exporting?

Accepted Answer

A)  It avoids the often substantial costs of establishing manufacturing operations in the host country. 
B)  It is the best choice if lower-cost manufacturing locations are available abroad. 
C)  Low transportation costs may make exporting uneconomical. 
D)  Tariff barriers may make exporting the most attractive option. 
A)  It avoids the often substantial costs of establishing manufacturing operations in the host country. 
B)  It is the best choice if lower-cost manufacturing locations are available abroad. 
C)  Low transportation costs may make exporting uneconomical. 
D)  Tariff barriers may make exporting the most attractive option.

Question 20

What are the two methods of entering foreign marketing using a wholly owned subsidiary?

Accepted Answer

Firms entering a foreign market via a wh

Why should a firm be cautious about entering a licensing agreement?

Which of the following statements is true of strategic alliances?

________ is a way to bring together complementary skills and assets that neither company could easily develop on its own.

The valuable asset of firms, whose competitive advantage is based on management know-how, is their

What is true of acquisitions?

Which of the following is true of wholly owned subsidiaries?

Which of the following is true of licensing?

By producing its product in a centralized location, licensing limits a firm's ability to realize experience curve and location economies.

If a firm can realize location economies by moving production elsewhere, it should avoid

Firms entering a market via a ________ must bear all the costs and risks associated with the venture.

A strategic commitment can be reversed by the top management at will.

If a firm's core competence is proprietary technological knowledge, a joint venture is preferable.

When determining the value of a foreign market, an international firm must consider both its products and the competition.

When an exporting firm finds that its local agent is also carrying competitors' products, the firm may switch to a ________ to handle local marketing, sales, and service.

Franchising enables a firm to quickly build a global presence.

Firms pursuing global standardization or transnational strategies tend to prefer ________ arrangements.

Brand names such as Starbucks and Subway are well protected by international laws pertaining to trademarks.

Switching costs may

Which of the following is true of exporting?

What are the two methods of entering foreign marketing using a wholly owned subsidiary?

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 15: Entry Strategy and Strategic Alliances

Why should a firm be cautious about entering a licensing agreement?

Which of the following statements is true of strategic alliances?

________ is a way to bring together complementary skills and assets that neither company could easily develop on its own.

The valuable asset of firms, whose competitive advantage is based on management know-how, is their

What is true of acquisitions?

Which of the following is true of wholly owned subsidiaries?

Which of the following is true of licensing?

By producing its product in a centralized location, licensing limits a firm's ability to realize experience curve and location economies.

If a firm can realize location economies by moving production elsewhere, it should avoid

Firms entering a market via a ________ must bear all the costs and risks associated with the venture.

A strategic commitment can be reversed by the top management at will.

If a firm's core competence is proprietary technological knowledge, a joint venture is preferable.

When determining the value of a foreign market, an international firm must consider both its products and the competition.

When an exporting firm finds that its local agent is also carrying competitors' products, the firm may switch to a ________ to handle local marketing, sales, and service.

Franchising enables a firm to quickly build a global presence.

Firms pursuing global standardization or transnational strategies tend to prefer ________ arrangements.

Brand names such as Starbucks and Subway are well protected by international laws pertaining to trademarks.

Switching costs may

Which of the following is true of exporting?

What are the two methods of entering foreign marketing using a wholly owned subsidiary?

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Accounting and Finance in the International Business

Filters