Question 1

Which of the following is an advantage of licensing?

Accepted Answer

A)  It is ideal for products, services, or knowledge that is highly complex. 
B)  It is easy to maintain control over how the licensed asset is used. 
C)  It requires very little capital investment in the foreign market. 
D)  It guarantees a basis for future expansion in the market.

Question 2

Which of the following is provided by the licensor in a licensing agreement?

Accepted Answer

A)  a monetary down-payment plus royalties for all products sold locally 
B)  a combination of intellectual property and technical information and assistance 
C)  a storefront or facility and the necessary materials to make the product 
D)  a combination of a lump-sum payment and the intellectual know-how

Question 3

________ is an arrangement in which the focal firm or a consortium of firms plans, finances, organizes, manages, and implements all phases of a project abroad and then hands it over to a foreign customer after training local workers.

Accepted Answer

A)  Home-replication strategy 
B)  Exporting 
C)  Turnkey contracting 
D)  Equity-based collaborative venture

Question 4

Patents provide inventors the right to prevent another person or company from selling or using an invention for up to twenty years.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Explain the role of intellectual property rights in foreign market contractual strategies. What constitutes the infringement of intellectual property?

Accepted Answer

The answer of Explain the role of intellectual property rights...

Question 7

Which of the following is characteristic of exclusive licensing agreements?

Accepted Answer

A)  The licensor is not allowed to interfere with the production or marketing of the licensed asset. 
B)  It ensures payment from the licensee to the licensor upon receipt of an export shipment. 
C)  The licensee cannot cancel the contract with the licensor even if sales of the licensed asset are poor. 
D)  The licensee is prohibited from sharing the licensed asset with another company within a specified region.

Question 8

Leasing is especially beneficial to ________.

Accepted Answer

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

Question 9

Azoo Government Projects (Scenario)
The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Representatives of the Azoo government are reviewing the project bids provided by two different international contractors. Contractor A proposes a turnkey contract for Azoo. Contractor B proposes a build-operate-transfer arrangement.
-Contractor A would most likely oversee each of the following EXCEPT ________.

Accepted Answer

A)  designing the bridge 
B)  operating the subway system continuously 
C)  engineering the bridge 
D)  constructing the subway system

Question 10

Which of the following is an example of franchising?

Accepted Answer

A)  An Italian clothing company opens factories in China and Bangladesh to reduce manufacturing costs. 
B)  A U.S-based quick-service restaurant gives rights to another business to use its entire business system in exchange for compensation and royalties. 
C)  A U.S.-based animation company allows factories in China to use their famous cartoon character on mugs and stationery. 
D)  A Germany automobile manufacturer opens an office in the Philippines for its customer care operations.

Question 11

Which of the following statements is TRUE of infringement of intellectual property?

Accepted Answer

A)  The most commonly counterfeited goods include heavy machinery and computer manufacturing. 
B)  It amounts to piracy and takes the form of production and distribution of counterfeit goods. 
C)  It is the ability to control important intellectual property before it reaches competitors. 
D)  Counterfeiting and piracy can be particularly troublesome in advanced economies because of subjective ethical standards.

Question 12

When compared to licensing agreements, the relationships established in franchising arrangements are typically volatile and short-term.

Accepted Answer

A) True 
 B)False

Question 13

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 a requirement for the franchisor to become familiar with foreign laws and regulations.

Question 14

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

Accepted Answer

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

Question 15

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

Accepted Answer

The answer of Describe three challenges faced by professional service...

Question 16

An arrangement in which a contractor supplies managerial know-how to operate a hotel, hospital, airport, or other facility in exchange for compensation is known as offshoring.

Accepted Answer

A) True 
 B)False

Question 17

Describe five advantages of licensing agreements from the perspective of the licensor.

Accepted Answer

The answer of Describe five advantages of licensing agreements from...

Question 18

To minimize the complexity of franchising, focal firms must ________.

Accepted Answer

A)  bribe government officials to reduce nontariff trade barriers 
B)  have a subjective view of moral and ethical standards 
C)  conduct advance research on the host country's laws on intellectual property 
D)  appoint managers from the home country to avoid legal disputes

Question 19

A ________ is a fee paid periodically to compensate a licensor for the temporary use of its intellectual property, often based on a percentage of gross sales generated from the use of the licensed asset.

Accepted Answer

A)  duty 
B)  residual 
C)  royalty 
D)  tariff

Question 20

Exporting and foreign direct investing are two common types of contractual entry strategies.

Accepted Answer

A) True 
 B)False

Exam 15: Licensing, Franchising, and Other Contractual Strategies

Which of the following is an advantage of licensing?

Which of the following is provided by the licensor in a licensing agreement?

________ is an arrangement in which the focal firm or a consortium of firms plans, finances, organizes, manages, and implements all phases of a project abroad and then hands it over to a foreign customer after training local workers.

Patents provide inventors the right to prevent another person or company from selling or using an invention for up to twenty years.

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

Explain the role of intellectual property rights in foreign market contractual strategies. What constitutes the infringement of intellectual property?

Which of the following is characteristic of exclusive licensing agreements?

Leasing is especially beneficial to ________.

Which of the following is an example of franchising?

Which of the following statements is TRUE of infringement of intellectual property?

When compared to licensing agreements, the relationships established in franchising arrangements are typically volatile and short-term.

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

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

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

An arrangement in which a contractor supplies managerial know-how to operate a hotel, hospital, airport, or other facility in exchange for compensation is known as offshoring.

Describe five advantages of licensing agreements from the perspective of the licensor.

To minimize the complexity of franchising, focal firms must ________.

A ________ is a fee paid periodically to compensate a licensor for the temporary use of its intellectual property, often based on a percentage of gross sales generated from the use of the licensed asset.

Exporting and foreign direct investing are two common types of contractual entry strategies.