Question 1

The most typical joint venture is a 25/75 venture.

Accepted Answer

A) True 
 B)False

Question 2

Imagine that you are meeting with your superiors to discuss entering a foreign market. Your boss has asked you to analyze a joint venture prospect. Why might you tell your boss that the joint venture is not a good idea?

Accepted Answer

There are major disadvantages with joint

Question 3

Which of the following statements is true of turnkey projects?

Accepted Answer

A)  Turnkey projects are most common in industries which use simple, inexpensive production technologies. 
B)  A turnkey strategy can be more risky than conventional FDI. 
C)  A turnkey strategy is particularly useful where FDI is limited by host-government regulations. 
D)  Firms that enter into a turnkey deal have a long-term interest in the foreign country. 
A)  Turnkey projects are most common in industries which use simple, inexpensive production technologies. 
B)  A turnkey strategy can be more risky than conventional FDI. 
C)  A turnkey strategy is particularly useful where FDI is limited by host-government regulations. 
D)  Firms that enter into a turnkey deal have a long-term interest in the foreign country.

Question 4

A good ally will expropriate the firm's technological know-how while giving away little in return.

Accepted Answer

A) True 
 B)False

Question 5

What is the primary advantage of licensing?

Accepted Answer

A)  It helps a firm avoid the development costs associated with opening a foreign market. 
B)  It gives a firm the tight control over manufacturing, marketing, and strategy. 
C)  It helps a firm achieve experience curve and location economies. 
D)  It increases a firm's ability to utilize a coordinated strategy. 
A)  It helps a firm avoid the development costs associated with opening a foreign market. 
B)  It gives a firm the tight control over manufacturing, marketing, and strategy. 
C)  It helps a firm achieve experience curve and location economies. 
D)  It increases a firm's ability to utilize a coordinated strategy.

Question 6

If a service firm wants to build a global presence quickly and at a relatively low cost and risk, it must employ _____.

Accepted Answer

A)  chartering 
B)  exporting 
C)  a turnkey strategy 
D)  franchising 
A)  chartering 
B)  exporting 
C)  a turnkey strategy 
D)  franchising

Question 7

What is Bartlett and Ghoshal's perspective on how firms from developing countries should approach international expansion?

Accepted Answer

A)  They suggest joint ventures to improve the firm's presence in the country while also growing the business opportunities for companies in the developing country. 
B)  They suggest that franchising should be used in order to minimize risk and allow for the maximum expansion in the quickest amount of time. 
C)  They suggest turnkey operations that allow for a rapid startup. 
D)  They suggest that companies should use the entry of foreign multinationals as an opportunity to learn from these competitors by benchmarking their operations and performance against them. 
A)  They suggest joint ventures to improve the firm's presence in the country while also growing the business opportunities for companies in the developing country. 
B)  They suggest that franchising should be used in order to minimize risk and allow for the maximum expansion in the quickest amount of time. 
C)  They suggest turnkey operations that allow for a rapid startup. 
D)  They suggest that companies should use the entry of foreign multinationals as an opportunity to learn from these competitors by benchmarking their operations and performance against them.

Question 8

Which of the following statements about franchising is true?

Accepted Answer

A)  It guarantees consistent product quality. 
B)  It tends to involve more short-term commitments than licensing. 
C)  It is a specialized form of licensing. 
D)  It is employed primarily by manufacturing firms. 
A)  It guarantees consistent product quality. 
B)  It tends to involve more short-term commitments than licensing. 
C)  It is a specialized form of licensing. 
D)  It is employed primarily by manufacturing firms.

Question 9

Which of the following is a disadvantage of licensing?

Accepted Answer

A)  It does not help firms that lack capital to develop operations overseas. 
B)  It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. 
C)  It cannot be used when a firm possesses some intangible property that might have business applications. 
D)  The firm has to bear the development costs and risks associated with opening a foreign market. 
A)  It does not help firms that lack capital to develop operations overseas. 
B)  It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. 
C)  It cannot be used when a firm possesses some intangible property that might have business applications. 
D)  The firm has to bear the development costs and risks associated with opening a foreign market.

Question 10

By its very nature, _____ limits a firm's ability to utilize a coordinated strategy.

Accepted Answer

A)  licensing 
B)  turnkey contracting 
C)  franchising 
D)  exporting 
A)  licensing 
B)  turnkey contracting 
C)  franchising 
D)  exporting

Question 11

Which of the following is an advantage of establishing a joint venture?

Accepted Answer

A)  Joint ventures with local partners do not face any risk of being subject to nationalization or other forms of adverse government interference. 
B)  Joint ventures give a firm a tight control over subsidiaries that it might need to realize experience curve or location economies. 
C)  When the development costs and/or risks of opening a foreign market are high, a firm might gain by sharing these costs and or risks with a local partner. 
D)  The firm is deprived of the knowledge of the host country's competitive conditions, culture, language, etc. 
A)  Joint ventures with local partners do not face any risk of being subject to nationalization or other forms of adverse government interference. 
B)  Joint ventures give a firm a tight control over subsidiaries that it might need to realize experience curve or location economies. 
C)  When the development costs and/or risks of opening a foreign market are high, a firm might gain by sharing these costs and or risks with a local partner. 
D)  The firm is deprived of the knowledge of the host country's competitive conditions, culture, language, etc.

Question 12

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 13

In a ____, the firm owns 100 percent of the stock.

Accepted Answer

A)  joint venture 
B)  wholly owned subsidiary 
C)  turnkey project 
D)  franchising agreement 
A)  joint venture 
B)  wholly owned subsidiary 
C)  turnkey project 
D)  franchising agreement

Question 14

Educating customers is a part of pioneering costs.

Accepted Answer

A) True 
 B)False

Question 15

What is a joint venture? What type of joint venture is most common? Provide an example of a joint venture.

Accepted Answer

A joint venture involves establishing a

Question 16

Most service firms have found that _____ with local partners work best for controlling subsidiaries.

Accepted Answer

A)  joint ventures 
B)  licensing agreements 
C)  greenfield investments 
D)  turnkey projects 
A)  joint ventures 
B)  licensing agreements 
C)  greenfield investments 
D)  turnkey projects

Question 17

Which of the following is true of acquisitions?

Accepted Answer

A)  It is a time-consuming process and takes a lot of time to execute. 
B)  They are less risky than greenfield ventures in the sense that there is less potential for unpleasant surprises. 
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 and takes a lot of time to execute. 
B)  They are less risky than greenfield ventures in the sense that there is less potential for unpleasant surprises. 
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 18

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)  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)  Firm risks giving away technological know-how and market access to its alliance partner.

Question 19

Turnkey projects are most common in which of the following industries?

Accepted Answer

A)  Fresh fruit, grain, and meat products 
B)  Chemical, pharmaceutical, and metal refining 
C)  Consumer durables, computer peripherals, and automotive parts 
D)  Apparel, shoes, and leather products 
A)  Fresh fruit, grain, and meat products 
B)  Chemical, pharmaceutical, and metal refining 
C)  Consumer durables, computer peripherals, and automotive parts 
D)  Apparel, shoes, and leather products

Question 20

Franchising enables a firm to quickly build a global presence.

Accepted Answer

A) True 
 B)False

The most typical joint venture is a 25/75 venture.

Imagine that you are meeting with your superiors to discuss entering a foreign market. Your boss has asked you to analyze a joint venture prospect. Why might you tell your boss that the joint venture is not a good idea?

Which of the following statements is true of turnkey projects?

A good ally will expropriate the firm's technological know-how while giving away little in return.

What is the primary advantage of licensing?

If a service firm wants to build a global presence quickly and at a relatively low cost and risk, it must employ _____.

What is Bartlett and Ghoshal's perspective on how firms from developing countries should approach international expansion?

Which of the following statements about franchising is true?

Which of the following is a disadvantage of licensing?

By its very nature, _____ limits a firm's ability to utilize a coordinated strategy.

Which of the following is an advantage of establishing a joint venture?

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.

In a ____, the firm owns 100 percent of the stock.

Educating customers is a part of pioneering costs.

What is a joint venture? What type of joint venture is most common? Provide an example of a joint venture.

Most service firms have found that _____ with local partners work best for controlling subsidiaries.

Which of the following is true of acquisitions?

Which of the following statements is true of strategic alliances?

Turnkey projects are most common in which of the following industries?

Franchising enables a firm to quickly build a global presence.

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 15: Entry Strategy and Strategic Alliances

The most typical joint venture is a 25/75 venture.

Imagine that you are meeting with your superiors to discuss entering a foreign market. Your boss has asked you to analyze a joint venture prospect. Why might you tell your boss that the joint venture is not a good idea?

Which of the following statements is true of turnkey projects?

A good ally will expropriate the firm's technological know-how while giving away little in return.

What is the primary advantage of licensing?

If a service firm wants to build a global presence quickly and at a relatively low cost and risk, it must employ _____.

What is Bartlett and Ghoshal's perspective on how firms from developing countries should approach international expansion?

Which of the following statements about franchising is true?

Which of the following is a disadvantage of licensing?

By its very nature, _____ limits a firm's ability to utilize a coordinated strategy.

Which of the following is an advantage of establishing a joint venture?

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.

In a ____, the firm owns 100 percent of the stock.

Educating customers is a part of pioneering costs.

What is a joint venture? What type of joint venture is most common? Provide an example of a joint venture.

Most service firms have found that _____ with local partners work best for controlling subsidiaries.

Which of the following is true of acquisitions?

Which of the following statements is true of strategic alliances?

Turnkey projects are most common in which of the following industries?

Franchising enables a firm to quickly build a global presence.

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters