Exam 5: Identifying and Analyzing Domestic and International Opportunities

____ and _____ are both government sources of information that might be helpful in gathering the information needed to start a business.

McDonald's acquiring its store franchises is an example of what type of merger?

A _____ is the joining of two firms in order to form a third company in which the equity is shared.

The objectives of the General Agreement on Tariffs and Trade was to liberalize trade by eliminating or reducing tariffs.

Concerns regarding roads,electricity,banking facilities,communication,and educational systems have to do with a country's:

______ is a nonprofit organization that provides free online and in-person assistance to entreprenuers in the form of training,consulting and mentoring provided mainly by retired executives and entreprenuers.

International entrepreneurial decisions are more complex than domestic decisions due to uncontrollable factors such as economic development and stage of economic development.

All of the following are government sources of information except:

Explain the major factors an entrepreneur needs to consider in choosing the best distribution channel in a foreign country.

The North American Free Trade Agreement (NAFTA)increases trade barriers and quotas among the U.S. ,Canada,and Mexico.

Gifts related to business proceedings are illegal in most other countries and should not be offered to foreign business partners.

What is a nonequity arrangement? Define the two major types of nonequity arrangements: licensing and turn-key projects,and give at least one advantage and disadvantage for each. Nonequity arrangement - a method by which an entrepreneur can enter a market and obtain sales and profits without direct equity investment in the foreign market. A.Licensing - involves an entrepreneur who is a manufacturer (licensee)giving a foreign manufacturer (licensor)the right to use a patent,trademark,technology,production process,or product in return for the payment of a royalty. Benefit: Low development costs and risks. Disadvantages: Lack of control over technology,inability to realize location and experience curve economies,inability to engage in global strategic coordination. B.Turn-key projects - A method of doing international business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners. Benefits: relatively low risk,ability to earn returns from process technology skills in countries where FDI is restricted. Disadvantages: Creation of efficient competitors,lack of long-term market presence.

Define political risk analysis,and identify and briefly describe the three major types of political risk. Political risk analysis - Prior to entering into business in another country,an assessment of that country's political policies and its stability A.Operating risk - risk of interference with the operations of the venture B.Transfer risk - risk in attempting to shift assets or other funds out of the country C.Ownership risk - the largest potential risk,where the country takes over the venture's property and employees

There are three general classifications for exporting;direct,indirect and third-party.

Nonverbal or hidden language of the culture can be thought of in terms of several components - time,intangible value,and business relationships.

Which of the following statements is not true?

What term describes the practice of paying for goods indirectly through another source?

If the legal system of the country the global entrepreneur is dealing with does not have a good track record,it is not possible for the contract to contain any agreement that contract disputes will be heard in the courts of a different country or home country.

When researching foreign markets,the entrepreneur will usually want data such as population,GDP,per capita income,inflation rate,literacy rate,unemployment,and education levels.

What are the major reasons why an entrepreneur would go global?