Question 1

Discuss the advantages of establishing a greenfield venture in a foreign country.

Accepted Answer

The answer of Discuss the advantages of establishing a greenfield...

Question 2

By its very nature, ________ limits a firm's ability to coordinate strategic moves across countries.

Accepted Answer

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

Question 3

According to Bartlett and Ghoshal, how should firms from developing countries 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.

Question 4

A firm can establish a wholly owned subsidiary in a country by building a subsidiary from the ground up, called the

Accepted Answer

A)  joint venture. 
B)  turnkey strategy. 
C)  licensing agreement. 
D)  greenfield strategy.

Question 5

________ is advantageous because it avoids the cost of establishing manufacturing operations in the host country and it may help a firm achieve experience curve and location economies.

Accepted Answer

A)  Licensing 
B)  Exporting 
C)  Franchising 
D)  A turnkey contract

Question 6

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

Accepted Answer

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Question 7

Overpayment for assets of an acquired firm is one reason acquisitions fail.

Accepted Answer

A) True 
 B)False

Question 8

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

The answer of Imagine that you are meeting with your...

Question 9

If a firm's core competency is based on control over proprietary technological know-how, ________ and ________ arrangements should be avoided if possible to minimize the risk of losing control over that technology.

Accepted Answer

A)  licensing; joint venture 
B)  wholly owned subsidiary; exporting 
C)  turnkey contracts; exporting 
D)  exporting; joint venture

Question 10

A wholly owned subsidiary limits a firm's control over marketing and sales in different countries.

Accepted Answer

A) True 
 B)False

Question 11

Cross-licensing agreements are increasingly common in the ________ industries.

Accepted Answer

A)  transportation 
B)  high-technology 
C)  construction 
D)  consumer durables

Question 12

Which of the following statements is true of turnkey projects?

Accepted Answer

A)  Turnkey projects are most common in industries that use simple, inexpensive production technologies. 
B)  A turnkey strategy can be more risky than conventional FDI, particularly in unstable political environments. 
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 13

Explain the term relational capital and the importance this concept plays in managing an effective business alliance.

Accepted Answer

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Question 14

How can a firm increase the probability of selecting a good partner?

Accepted Answer

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Question 15

If a high-tech firm sets up operations in a foreign country to profit from a core competency in technological know-how, which of the following entry strategy is best?

Accepted Answer

A)  joint ventures 
B)  licensing 
C)  wholly owned subsidiaries 
D)  turnkey contacts

Question 16

Other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in

Accepted Answer

A)  politically unstable developing nations that operate with a mixed or command economy. 
B)  nations where there is a dramatic upsurge in either inflation rates or private-sector debt. 
C)  politically stable developed and developing nations that have free market systems. 
D)  developing nations where speculative financial bubbles have led to excess borrowing.

Question 17

Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of

Accepted Answer

A)  licensing agreements. 
B)  franchising agreements. 
C)  intangible property. 
D)  tangible property.

Question 18

________ refer to cooperative agreements between potential or actual competitors.

Accepted Answer

A)  Greenfield investments 
B)  Strategic alliances 
C)  Takeovers 
D)  Licensing agreements

Question 19

Discuss the trade-offs associated with large-scale entry versus small-scale entry.

Accepted Answer

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Question 20

Most service firms have found that ________ with local partners work best for the master controlling subsidiaries.

Accepted Answer

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

Exam 15: Entry Strategy and Strategic Alliances