Deck 15: Going Global: Yes or No

Question 1

The flexibility of a smaller company makes it possible to meet the demands of global markets and redefine a company's programs more quickly than might occur in the larger multinational corporation.

Answer 1

True

Question 2

Advertisements must coincide with cultural norms if they are to be effective.

Answer 2

True

Question 3

A business's unique value proposition is what will differentiate one marketplace offering from the competition.

Answer 3

True

Question 4

The political environment of countries is necessarily a critical concern to any small business.

Question 5

Working capital is needed only before a sale takes place.

Question 6

Small business success in international trade is extremely important to the welfare of the United States.

Question 7

The meaning and the value assigned to the psychological attributes of a product can be either positive or negative.

Question 8

Tariffs may make it impossible for a US small business to profitably sell its products in a particular country.

Question 9

It is increasingly common for most US services firms to establish a foreign affiliate because most services are better supplied in close proximity to the principal or final customers.

Question 10

A market relates to more than a product's physical form and primary function.

Question 11

Consumers across the globe respond similarly to products regardless of their culture, style, feelings, value systems, attitudes, beliefs, or perceptions.

Question 12

The same global business strategies can be implemented regardless of the fluctuations in the value of dollar.

Question 13

The means of global distribution of a product is necessarily a country-by-country decision.

Question 14

Although small businesses make up a disproportionately large share of the number of companies that export and import in the United States, this represents only about 1 percent of the total number of small businesses.

Question 15

In the global market, all products must go through the complete channel of manufacturers, wholesalers, retailers, and consumers.

Question 16

Currency exchange rates change daily.

Question 17

Commercial banks prefer to establish an ongoing business relationship instead of financing solely on the basis of an individual order.

Question 18

In direct exporting, a small business exports straight to a customer who is interested in buying a particular product.

Question 19

Unless an exporting business plans to establish a retail operation on foreign soil, it will need to establish business-to-business (B2B) sales relationships so that products can be sold directly to foreign retailers or foreign distributors who will sell to those retailers.

Question 20

Cultural sensitivity is particularly important in cyberspace.

Question 21

Which of the following is an advantage of direct exporting?

A) The owner has a greater degree of control over all aspects of the transaction.
B) It does not require a lot of organizational effort or staff workers.
C) The business has limited liability for product marketing problems.
D) The producer of the goods is subject to only small dangers and risk.
E) The owner does not have to be concerned with shipment and other logistics.

Question 22

The open account method of payment works well if the buyer is well established, has a long and favorable payment record, or has been thoroughly checked for being creditworthy.

Question 23

Once a sale is made, it is the end of the relationship between a business and an overseas customer because providing after-sale service for an overseas customer becomes too complicated.

Question 24

Which of the following is a disadvantage of indirect exporting?

A) It requires more "people power" to cultivate a customer base.
B) It takes more time, energy, and money than an owner may be able to afford.
C) The opportunity to tailor its offerings to the customer's evolving needs is lost.
D) The owner himself can not provide quick response to customer communications.
E) The owner must handle all the logistics of the transaction.

Question 25

Which of the following is a benefit of indirect exporting?

A) The owner has a greater degree of control over all aspects of the transaction.
B) The owner is presented as fully committed and engaged in the export process and develops a better understanding of the marketplace.
C) Potential profits are greater.
D) The owner knows whom to contact if something is not working.
E) The producer of the goods is subject to only small dangers and risk.

Question 26

A joint venture is a partnership with a foreign firm formed to achieve a specific goal or operate for a specific period of time.

Question 27

A multinational company is:

A) an organization that provides disaster assistance and emergency relief for businesses through special tax law provisions.
B) a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide.
C) a business voluntarily operated by two or more people as co-owners for profit.
D) a company that operates on a worldwide scale without ties to any specific nation or region and organized under the laws of its own country.
E) a business composed of two or more owners who contribute the initial capital of the business and share in the profits and the losses.

Question 28

A micromultinational is:

A) a business composed of two or more owners who contribute the initial capital of the business and share in the profits and the losses.
B) a tiny company that operates globally, having a presence and people in several countries.
C) an organization that provides disaster assistance and emergency relief for businesses through special tax law provisions.
D) a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide.
E) a business voluntarily operated by two or more people as co-owners for profit.

Question 29

Which of the following is an advantage of indirect exporting?

A) Potential profits are greater.
B) A business can field-test its products for export potential.
C) The owner knows customers, and the customers know the owner.
D) The owner knows whom to contact if something is not working.
E) As a business develops in the foreign market, the owner has greater flexibility to improve or redirect marketing efforts.

Question 30

Knowing about the sources of value in a product or a service and then acting on them is an important first step in providing customer value.

Question 31

A letter of credit is the least secure method of payment for international transactions.

Question 32

Which of the following is a feature of direct exporting?

A) It allows the owner to continue to concentrate on its domestic business.
B) It does not require a lot of organizational effort or staff workers.
C) The profits of a business will be lower, and control over foreign sales is lost.
D) The business has limited liability for product marketing problems.
E) It takes more time, energy, and money than an owner may be able to afford.

Question 33

Which of the following is a benefit of direct exporting?

A) The producer of the goods is subject to only small dangers and risk.
B) The owner does not have to be concerned with shipment and other logistics.
C) The business has limited liability for product marketing problems.
D) The owner knows whom to contact if something is not working.
E) It does not require a lot of organizational effort or staff workers.

Question 34

Which of the following is a drawback of direct exporting?

A) Servicing the business will demand more responsibility from every level in the organization.
B) The profits of a business will be lower, and control over foreign sales is lost.
C) The opportunity to tailor its offerings to the customer's evolving needs is lost.
D) The owner knows whom to contact if something is not working.
E) The long-term outlook and goals for an export program can change rapidly, and it is hard to redirect efforts accordingly.

Question 35

Documentary collection is the most secure method of payment for international transactions.

Question 36

Which of the following is a feature of indirect exporting?

A) The owner does not have to be concerned with shipment and other logistics.
B) The owner has a greater degree of control over all aspects of the transaction.
C) The owner knows whom to contact if something is not working.
D) It requires more "people power" to cultivate a customer base.
E) Potential profits are greater.

Question 37

Shipping costs pose a threat to the cash flow of small businesses.

Question 38

Which of the following is a disadvantage of direct exporting?

A) The profits of a business will be lower, and control over foreign sales is lost.
B) The opportunity to tailor its offerings to the customer's evolving needs is lost.
C) The owner may not be able to respond to customer communications as quickly as a local agent can.
D) The owner does not know whom to contact if something is not working.
E) The long-term outlook and goals for an export program can change rapidly, and it is hard to redirect efforts accordingly.

Question 39

The draft is an unconditional order to make payment in accordance with its terms, which specify the documents needed before title to the goods will be passed.

Question 40

A separate business entity is created in a joint venture.

Question 41

Which of the following is the most secure method of payment for international transactions?

A) Letters of credit
B) Payment in advance
C) Consignment
D) Documentary collection
E) Open account

Question 42

Features of a product that have little to do with the primary function of the product but add value to customer satisfaction are known as:

A) functional attributes.
B) psychological attributes.
C) conditional attributes.
D) epistemic attributes.
E) sociological attributes.

Question 43

Which of the following is true about SBA EWCP 7(a) Loan Programs?

A) They help small businesses develop or expand their export markets.
B) They offer borrowers a maximum SBA-guaranteed portion of $1.75 million.
C) They are aimed at offsetting the added risks of doing business abroad, from complex trade rules to unpaid bills.
D) They provide lenders guarantees of up to 90 percent on export loans to ensure that qualified exporters do not lose viable export sales due to a lack of working capital.
E) They offer short-term financing or may purchase the goods to be exported directly from the manufacturer.

Question 44

Which of the following is a drawback of indirect exporting?

A) Servicing the business will demand more responsibility from every level in the organization.
B) The owner must handle all the logistics of the transaction.
C) It requires more "people power" to cultivate a customer base.
D) The profits of a business will be lower, and control over foreign sales is lost.
E) It takes more time, energy, and money than an owner may be able to afford.

Question 45

International Trade Loan Program 7(a) Loans are available for businesses that:

A) are trying to develop or expand their export markets.
B) are able to generate export sales but need additional working capital to support these sales.
C) plan to start or continue exporting or have been adversely affected by competition from imports.
D) require working capital loan guarantees, export-credit insurance, and other forms of financing for US exporters of all sizes.
E) seek intermediaries who can purchase their goods to be exported directly from them.

Question 46

Which of the following is true about strategic alliance?

A) It is an agreement that considers the choice between making money or controlling and running a business.
B) It is a business relationship based on cooperation out of mutual need, and there is shared risk in achieving a common objective.
C) It is the transference of leadership from one generation to the next to ensure continuity of family ownership of the business.
D) It is a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide.
E) It is insurance that protects a business in the event of a natural disaster that affects the ability of a company to conduct business.

Question 47

Which of the following is a legal entity with each partner holding an equity position?

A) Direct cooperation
B) Angel venture
C) Industrial alliance
D) Joint venture
E) Venture succession

Question 48

Which of the following is true about documentary collection or draft as a method of payment?

A) It is an internationally recognized letter issued by a bank on behalf of its client, the purchaser.
B) It represents the bank's guarantee to pay the seller, provided that the conditions specified in the letter are fulfilled.
C) It is the ideal method of payment because a company has immediate use of the money.
D) It involves wire transfers or the acceptance of credit cards.
E) It requires the buyer to pay the face amount either on sight or on a specified date in the future.

Question 49

Which of the following best describes a strategic alliance?

A) It is a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide.
B) It is the transference of leadership from one generation to the next to ensure continuity of family ownership of the business.
C) It is insurance that protects a business in the event of a natural disaster that affects the ability of a company to conduct business.
D) It is an agreement that considers the choice between making money or controlling and running a business.
E) It is an agreement signed between two corporations, but a separate business entity is not created.

Question 50

A documentary letter of credit is from a documentary collection or draft because the former method:

A) requires the buyer to pay the face amount either on sight or on a specified date in the future.
B) is considered risky in international business because a business has limited recourse if debts are unpaid.
C) is an internationally recognized instrument issued by a bank on behalf of its client, the purchaser.
D) relieves a business of collection problems and guarantees immediate use of the money.
E) puts the exporter under great risk and offers the least control over the goods.

Question 51

The most severe political risk to exporting businesses is the seizing of a company's assets without payment, which is known as:

A) conviction.
B) elimination.
C) deduction.
D) expropriation.
E) confiscation.

Question 52

Which of the following best describes a joint venture?

A) It is a partnership with a foreign firm formed to achieve a specific goal or operate for a specific period of time.
B) It is a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide.
C) It is the transference of leadership from one generation to the next to ensure continuity of family ownership of the business.
D) It is insurance that protects a business in the event of a natural disaster that affects the ability of a company to conduct business.
E) It is an agreement that considers the choice between making money or controlling and running a business.

Question 53

Taxes imposed on imported goods so that the price of imported goods increases to the level of domestic goods are known as:

A) quotas.
B) tariffs.
C) levies.
D) embargoes.
E) sanctions.

Question 54

Which of the following factors, that affects a business going global, includes the value proposition?

A) Ways to export
B) Industry analysis
C) Company assessment
D) Sources of finance
E) Marketing issues

Question 55

The rate at which one country's currency can be expressed in terms of the currency of another country is known as the:

A) foreign rate.
B) currency rate.
C) exchange rate.
D) fiscal rate.
E) trade rate.

Question 56

Which of the following is the most secure method of payment for an exporter?

A) Episode payment
B) Letters of credit
C) Open account
D) Documentary collections
E) Bundled payment

Question 57

Which of the following is the least secure method of payment for international transactions?

A) Open account
B) Letters of credit
C) Payment in advance
D) Documentary collection
E) Consignment

Question 58

Export Express 7(a) Loan Programs offered by the SBA are streamlined programs that:

A) help small businesses develop or expand their export markets.
B) offer borrowers a maximum SBA-guaranteed portion of $1.75 million.
C) are aimed at offsetting the added risks of doing business abroad, from complex trade rules to unpaid bills.
D) provide lenders guarantees of up to 90 percent on export loans to ensure that qualified exporters do not lose viable export sales due to a lack of working capital.
E) offer short-term financing or may help purchase the goods to be exported directly from the manufacturer.

Question 59

Which of the following is true about documentary letter of credit as a method of payment?

A) It requires the buyer to pay the face amount either on sight or on a specified date in the future.
B) It involves the use of a draft, drawn by the seller on the buyer.
C) It represents the bank's guarantee to pay the seller, provided that the conditions specified in it are fulfilled.
D) It is the ideal method of payment because a company has immediate use of the money.
E) It involves wire transfers or the acceptance of credit cards.

Question 60

Export intermediaries:

A) help small businesses develop or expand their export markets.
B) offer borrowers a maximum SBA-guaranteed portion of $1.75 million.
C) are aimed at offsetting the added risks of doing business abroad, from complex trade rules to unpaid bills.
D) provide lenders guarantees of up to 90 percent on export loans to ensure that qualified exporters do not lose viable export sales due to a lack of working capital.
E) provide short-term financing or may purchase the goods to be exported directly from the manufacturer.

Question 61

Which of the following is true about an open account as a method of payment?

A) It requires the buyer to pay the face amount on sight.
B) It requires the exporter to bill the customer, who is then expected to pay under agreed-on terms at a future date after the goods are manufactured and delivered.
C) It involves the use of a draft, drawn by the seller on the buyer.
D) It is the ideal method of payment because a company has immediate use of the money.
E) It involves wire transfers or the acceptance of credit cards.

Question 62

Which of the following is true about consignment sales as a method of payment?

A) It requires the buyer to pay the face amount either on sight or on a specified date in the future.
B) It involves the use of a draft, drawn by the seller on the buyer.
C) It is the ideal method of payment because a company has immediate use of the money.
D) It involves wire transfers or the acceptance of credit cards.
E) It puts the exporter under great risk and offers the least control over the supplies.

Question 63

_____ are laws or regulations enacted by a country to protect its domestic industries against foreign competition.

Question 64

Direct and indirect exporting, strategic alliances, joint ventures, and direct foreign investment are a few market _____ strategies.

Question 65

The exchange rate is the rate at which one country's _____ can be exchanged for that of another country.

Question 66

_____ barriers include such things as import licensing requirements; fees; government procurement policies; border taxes; and packaging, labeling, and marking standards.

Question 67

A(n) _____ has the greatest risk and least control over the goods with the consignment sales method of payment.

Question 68

What are the factors that a small business should consider before entering the global market?

Question 69

What is the role of small businesses in the global environment?

Question 70

The set of benefits offered to customers to satisfy their needs and wants consisting of some combination of products, services, information, and experiences is known as _____.

Question 71

As the dollar declines in value against the euro, the price of goods and services from the European Union for US customers will _____.

Question 72

_____ is an internationally recognized instrument of payment issued by a bank on behalf of its client, the purchaser.

Question 73

_____ involves looking at where an industry currently is and the trends and directions predicted over the next three years so that a business can try to determine how competitive an industry is in the global market.

Question 74

_____ exporting involves entering into an agreement with an agent, distributor, or a traditional exporting house for the purpose of selling (or marketing and selling) the products in the target market.

Question 75

Write a short note on the importance of foreign affiliates.

Question 76

_____ is the ideal method of payment because a company is relieved of collection problems and has immediate use of the money.

Question 77

Which of the following is true about an ideal business export plan?

A) It should remain unaltered to ensure stability.
B) Its objectives need not be compared against actual results.
C) It is a complicated and detailed document.
D) It helps a business act on challenges and risks.
E) It does not play a role in obtaining financial assistance for a business.

Question 78

The physical handling and distribution of goods, the passage of ownership or title, and the buying and selling negotiations between producers and middlemen and middlemen and customers is known as the _____ process.

Question 79

A(n) _____ is a branch or a subsidiary of the parent company established outside the national boundaries of the parent company's home market.

Question 80

The _____ Bank is an independent federal agency that provides funds aimed at offsetting the added risks of doing business abroad, from complex trade rules to unpaid bills.