Exam 13: Selecting and Managing Entry Modes

Scenario: Sports Stuff Inc. Herb Graham is vice president of Sports Stuff Inc.,a business that develops,manufactures,and markets sports products.The company is looking to expand its operations into the European market.Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe,the company will achieve success there. -The CEO of Sports Stuff has decided that the company needs to retain complete control over its operations in Europe.To achieve this objective,Herb would most likely recommend that the firm establish a ________.

Scenario: Owen's HomeCare Products Owen McCain,owner of Owen's HomeCare Products,is considering going international.He feels that the products he manufactures will be well-received,especially in developing countries.He wants to understand the exporting process and then scale his exporting activities accordingly. -Through his research,Owen learns that the first step in developing a successful export strategy is ________.

Matching market needs to the company's abilities is the first step in developing a successful export strategy.

Discuss the steps companies should take to avoid export and import blunders.How can an advance payment method help exporters reduce financial risk?

Direct exporters always sell directly to end users.

The open account method of export/import financing is used when the two parties are unfamiliar with each other.

A sight draft extends the period of time following delivery by which the importer must pay for goods.

A document ordering the importer to pay the exporter a specified sum of money at a specified time is called a ________.

The most important disadvantage of a strategic alliance is that it can create a future local or even global competitor.

Scenario: Gro-Tru Grows To Europe Gro-Tru,a maker of chemical fertilizers and pesticides,sees enormous growth potential in Central Europe.The company has received several inquiries from potential importers in the region,but in most cases,the potential importers have expressed difficulty in obtaining the hard currency to pay for Gro-Tru's products.Alistair Green,vice-president for business development,is exploring how Gro-Tru can meet the needs of the potential market. -Alistair has identified an option that might help the firm deal with the importer's inability to pay with hard currency.The option involves selling goods or services that are paid for in whole or part with other goods or services.Which of the following methods is Alistair considering?

Scenario: Sports Stuff Inc. Herb Graham is vice president of Sports Stuff Inc.,a business that develops,manufactures,and markets sports products.The company is looking to expand its operations into the European market.Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe,the company will achieve success there. -Which of the following entry modes would Sports Stuff be implementing if it hires a company to design,construct,and test a production facility on its behalf?

The biggest advantage of an export management company is usually its ________.

Using a distributor increases an exporter's risk.

Identify the strategic factors that influence a company's international entry mode selection.Explain any three of them.

Franchising is primarily used in the manufacturing industries.

Scenario: Gro-Tru Grows To Europe Gro-Tru,a maker of chemical fertilizers and pesticides,sees enormous growth potential in Central Europe.The company has received several inquiries from potential importers in the region,but in most cases,the potential importers have expressed difficulty in obtaining the hard currency to pay for Gro-Tru's products.Alistair Green,vice-president for business development,is exploring how Gro-Tru can meet the needs of the potential market. -One option that intrigues Alistair is the process in which one company sells to another its obligation to make a purchase in a given country.This arrangement is known as ________.

Describe the process of how the documentary collection procedure works using an example.

Which of the following financing methods entails the greatest risk for exporters?

Which of the following is an advantage of wholly owned subsidiaries?

Scenario: Owen's HomeCare Products Owen McCain,owner of Owen's HomeCare Products,is considering going international.He feels that the products he manufactures will be well-received,especially in developing countries.He wants to understand the exporting process and then scale his exporting activities accordingly. -If Owen's HomeCare Products decides to sell their products to intermediaries who then resell them to buyers in target markets,the company would be engaging in ________.