In which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational?
Which of the following modes of entry is suitable for service firms where the risk of losing control over the management
skills or technological know-how is not much of a concern, and where the firms' valuable asset is their brand name?
In international business, an advantage of being a late entrant in a foreign market is the ability to
ride on an early entrant's investments in learning and customer education.
Omega, Inc., a maker of personal fitness trackers (like Fitbit) was the first mover into the country of Malnesia. As the first mover in a new product area, Omega, Inc. had to spend a lot of money educating the population of Malnesia about fitness and tracking one's fitness. In addition, they also had to spend money in developing a distribution channel. The costs that Omega, Inc. incurred in Malnesia as the first mover are called
Establishing a wholly owned subsidiary gives an international firm a 100 percent share in the profits generated in a foreign market.
Which of the following is true of the costs and risks associated with doing business in a foreign country?
They are lower in economically advanced nations.
The most typical joint venture is a 50/50 venture, in which there are two parties, each of which holds a 50 percent ownership stake and contributes a team of managers to share operating control.
Which of the following is an advantage of acquisitions as a means of entering foreign markets?
They are quick to
execute and help firms to rapidly build their presence in the target foreign market.
Which of the following is a reason why a relatively poor country may be an attractive target for inward investment?
Why should a high-tech firm avoid selecting licensing as a mode of entry?
risk of
losing control over technology
Which of the following is an advantage of franchising as a mode of entry into foreign markets?
The franchiser is relieved of many of the costs and risks of opening a foreign market on its own.
Which of the
following is true of the costs and risks associated with doing business in a foreign country?
They are lower in economically advanced nations.
Which of the following is an example of a first-mover advantage?
ability to create switching costs that tie customers into one's
products or services
A firm contemplating expansion should choose a foreign market based on an assessment of the nation's long-run profit potential.
Licensing is NOT attractive to which of the following firms?
firms requiring tight control of operations for realizing experience
curve and location economies
Why do firms pursuing global standardization or transnational strategies tend to prefer establishing wholly owned subsidiaries?
It allows firms to use the profits generated in one market to improve its competitive position in another market.
Which of the following is a method to establish a wholly owned subsidiary in a foreign market?
by acquiring an established firm in the host nation
Which of the following is true of the costs and risks associated with doing business in a foreign country?
They are lower in economically advanced nations.
When Yum Brands (that owns KFC, Taco Bell and Pizza Hut) entered China, it had to spend heavily to establish itself in that market. Which of the following is a disadvantage of Yum Brands' large-scale entry into China?
availability of fewer
resources to support expansion in other desirable markets
In a joint venture, a firm benefits from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business systems.
In which of the following situations can an international business command higher prices for a particular
product in a foreign market?
the product offers greater value to customers in the foreign market
An advantage of choosing exporting as a mode of entry into foreign markets is that a firm
can avoid the cost of establishing manufacturing operations in the host country.
In terms of licensing, which of the following is an intangible property?
Which of the following is an advantage of joint ventures as a mode of entry into foreign markets?
The foreign firm benefits from a local partner's knowledge of the host country.