Deck 18: Tapping Into Markets Across the Globe

Question 1

A domestic firm enters into a formal agreement with foreign companies to produce or market a product abroad under an arrangement called:

A) direct exporting.
B) direct investment.
C) joint venturing.
D) trade cartel.
E) none of the above

Answer 1

C

Question 2

Strategic alliances are BEST described as:

A) partnerships between governments of different countries.
B) partnerships between firms in different countries.
C) partnerships between offshore departments and the head office of an organisation.
D) partnerships between departments within the same organisation.
E) partnerships between channel members located in different countries.

Answer 2

B

Question 3

Studies of strategic alliance partnerships suggest that they are more likely to be successful when the venture partners exhibit certain characteristics. Which of the following is NOT one of these characteristics?

A) Venture partners are homogenous.
B) Venture partners have similar cultures, asset sizes and venturing experience.
C) Venture partners place a high value on their individual autonomy.
D) Venture partners have prior experience with the venture.
E) all of the above

Answer 3

C

Question 4

An approach to evaluating potential foreign markets as candidates for market entry is known as . This method involves considering the country selection procedure by considering all markets in the world and then applying a set of evaluation criteria in succession, progressively eliminating undesirable markets until a small cluster of suitable markets has been identified.

A) screening
B) country of origin analysis
C) market attractiveness index
D) country cluster analysis
E) Boston Consulting Group matrix

Question 5

Product adaptation involves:

A) altering both the product and the communication strategy to meet local preferences.
B) altering the product to meet local preferences with no change in communication strategy.
C) altering neither the product nor the communication strategy while entering a new market.
D) altering the product to meet minimum acceptable standards.
E) developing a new product and adapting the communication strategy to enter a new market.

Question 6

In developing alliance strategies, a global leader should consider:

A) focusing on mainstream markets.
B) market positioning to take the high and middle end of the market.
C) leveraging resources for rapid penetration entry.
D) B and C only
E) A, B, and C

Question 7

Straight extension of the product means:

A) introducing the product to the foreign market with major changes to the product.
B) introducing a customised product to the foreign market with existing marketing strategy.
C) introducing the product to the foreign market with minor changes to the product.
D) introducing a customised product to the foreign market with a new marketing strategy.
E) introducing the product to the foreign market without any changes to the product.

Question 8

International marketers that are seeking to minimise the costs of selling abroad are likely to favour a marketing mix that is:

A) tailored.
B) modified.
C) customised.
D) standardised.
E) none of the above

Question 9

A key feature of the virtual organisation structure is:

A) size.
B) continuity.
C) predictability.
D) profitability.
E) agility.

Question 10

Country managers are the backbone of an international division that is organised on the basis of:

A) product.
B) channel.
C) geography.
D) subsidiary.
E) both A and B

Question 11

When a manufacturer enters into a legally binding agreement for a local manufacturer to oversse the production but the firm retains control over marketing of the product, this is known as:

A) franchising.
B) direct entry.
C) contract manufacturing.
D) licensing.
E) joint venture.

Question 12

The Pacific Corporation desires to break into the Japanese market. In order to accomplish this goal, the firm sells to its offshore subsidiaries at a lower price than it charges in Australia. This action would be described as:

A) promotional pricing.
B) dumping.
C) special pricing.
D) transferring.
E) discounting.

Question 13

Which of the following is NOT one of the characteristics of a virtual organisation?

A) dynamic and adaptable
B) seamless and borderless
C) virtually horizontally integrated
D) interactive and shares information
E) reduced design- to- concept time

Question 14

A foreign- owned firm is granted the use of a domestic company's manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty under an arrangement known as:

A) joint venturing.
B) management contracting.
C) licensing.
D) contract manufacturing.
E) joint ownership.

Question 15

The Zespri Corporation has just built a new steel plant for Peru. Under the terms of its agreement with Peru, the firm will take payment with products produced by that plant. Alpha's repayment plan would be best described as:

A) counterpurchase.
B) recompense.
C) countertrade.
D) contratrade.
E) barter.

Question 16

As a means of entering a foreign market, a company may engage agents or distributors to act for it in that foreign market. This entry mode is known as:

A) Greenfield operation.
B) franchising.
C) licensing.
D) direct market entry.
E) indirect market entry.

Question 17

Which of the following is NOT normally one of the advantages associated with setting up a sales office in a foreign market?

A) It facilitates control over distribution and logistics.
B) It facilitates control over promotion and marketing.
C) It reduces costs and commitment of resources.
D) It serves as a base for horizontal expansion.
E) It serves as a base for vertical expansion.

Question 18

Minny oversees negotiations for the rights of foreign firms to use Hobart IT's manufacturing processes and trademarks. Minny manages which method of entering foreign markets for Hobart IT?

A) licensing
B) strategic alliance
C) direct exporting
D) joint ownership
E) contract manufacturing

Question 19

Which of the following is NOT normally seen as a major risk associated with licensing as a means of entering foreign markets?

A) Licences operate for a limited time period.
B) Licensing can lead to "cloning a competitor" whereby the licensee takes the learning and know- how and uses it to enter new markets.
C) Licencees may not fully develop the product's full potential.
D) Licences may produce sub- standard products.
E) All of the above are risks associated with licensing.

Question 20

Using a corporate acquisition as a method of entering a foreign market is NOT recommended under which of the following conditions?

A) when the company is too small to be able to enter the market using exporting or greenfields operations
B) where there are legal prohibitions on foreign market entrants
C) when the industry is highly competitive
D) when the firm is seeking rapid market entry
E) when substantial entry barriers exist

Question 21

The virtual corporation was renamed the _ corporation by Goldman, Nagel and Preiss.

A) sizeable
B) predictable
C) profitable
D) continuous
E) agile

Question 22

Which of the following questions would NOT normally be included in screening system for evaluating the potential of foreign markets?

A) Which overseas markets have substantial entry barriers for Australian firms?
B) Which overseas markets should be excluded due to least attractive political or social environments?
C) Which overseas markets have an unpleasant climate?
D) Which overseas markets are least attractive due to their nature and size?
E) Which overseas markets should be avoided because competitors are entrenched?

Question 23

Which of the following alliance strategies would NOT normally be considered appropriate for a global follower?

A) low cost structures
B) selective targeting of country markets
C) developing competencies in imitating and improving products, services, delivery processes and customer communications
D) establishing a well- organised intelligence system to provide early information on competition
E) communicaton lines and relationships that enable rapid decision- making

Question 24

The virtual organisation is BEST defined as:

A) a company that sells products or services exclusively across the internet.
B) an opportunistic network of entities joined to exploit fast- changing technologies and to share people, assets and ideas.
C) a vertically integrated network of organisations, each located in different countries.
D) a three- dimensional social interaction space where users, through an avatar, can mingle socially or play games.
E) none of the above

Question 25

The product strategy that is usually the most costly is:

A) product modification.
B) straight extension.
C) product adaptation.
D) product invention.
E) none of the above

Question 26

Which of the following alliance strategies would NOT normally be considered appropriate for a global leader?

A) integration of alliance partners into seamless organisation to deliver the offer
B) focussing on mainstream markets
C) leveraging resources for rapid penetration entry
D) market positioning to take the high and middle end of the market
E) alliance configuration of small units

Question 27

The most common form of manufacturing entry into a foreign market is:

A) direct exporting.
B) strategic alliance.
C) licensing.
D) joint venture.
E) contract manufacturing.

Question 28

The main advantage to a firm forming a strategic alliance is that:

A) it is a more effective diversification strategy than the traditional conglomerate approach.
B) it is inexpensive.
C) it is cost- effective.
D) it is perceived as being "with it."
E) it acquires the ability to operate beyond its capabilities.

Question 29

A company that is an innovator in technologies, products and markets and has a high global share and wide country market coverage is BEST described as a:

A) global nicher.
B) global follower.
C) global challenger.
D) global leader.
E) none of the above

Question 30

Cooperative manufacture is BEST described as:

A) an agreement between two organisations in different countries to share research and development, manufacturing expertise and other skills.
B) an agreement that turns over manufacturing to a local organisation in a different country.
C) an agreement between two or more organisations to produce different component parts of a product.
D) an agreement between two organisations in different countries to work together to achieve joint objectives.
E) none of the above

Question 31

Hobart Pty Ltd has just completed an agreement under which a foreign- owned firm will be given the right to use Hobart Pty Ltd's manufacturing process in return for the payment of a stipulated annual fee. Hobart Pty Ltd is engaged in:

A) joint ownership.
B) management contracting.
C) contract manufacturing.
D) licensing.
E) joint venturing.

Question 32

Which of the following is NOT one of the principal risks associated with joint ventures?

A) communication and management problems, especially when different cultures are involved
B) partial control over manufacturing and marketing
C) conflict between venture partners
D) lack of technological or production expertise
E) all of the above

Question 33

International trade involving the direct or indirect exchange of goods for other goods instead of cash is known as:

A) contra- dealing.
B) bartering.
C) abnormal trade.
D) countertrade.
E) counterpurchase.

Question 34

When considering the distribution of products in global markets, companies are wise to adopt a(n) view.

A) innovative
B) cost efficient
C) whole- channel
D) conservative
E) customised distribution

Question 35

When a firm decides to build its own manufacturing plant in a new country, this is known as:

A) autonomous market entry.
B) greenfield operation.
C) contract manufacturing.
D) direct market entry.
E) none of the above

Question 36

A company that engages in rapid penetration of narrow market segments by selective targeting of country markets by offering specialised products or services and has only a small share of the overall global market is known as a:

A) global leader.
B) global follower.
C) global nicher.
D) global challenger.
E) none of the above

Question 37

The challenges and obstacles to strategic alliances include:

A) autonomy (of alliance members).
B) forward momentum.
C) focus on the external environment.
D) A, B, and C
E) B and C only

Question 38

Low- cost distributors who buy more than they need and resell to distributors in other countries for less than they would have to pay through their "normal" channels are operating a(n):

A) low- cost operation.
B) illegal channel.
C) redistribution channel.
D) black market.
E) grey market.

Question 39

Firms which accept the higher costs associated with creating separate marketing mixes for each foreign market in the hopes of earning higher market shares and profits are using a marketing mix that is:

A) adapted.
B) uniform.
C) premium.
D) standardised.
E) none of the above

Question 40

When a company tailors both its product and promotion to the needs of a foreign market, this is known as:

A) adapted global marketing.
B) dual adaptation.
C) communication adaptation.
D) product adaptation.
E) modified global marketing.

Question 41

When a company uses agencies in the home country to get products into foreign markets, this is known as:

A) indirect market entry.
B) direct market entry.
C) franchising.
D) licensing.
E) contract manufacturing.

Question 42

As international operations become more important and competition increases, firms are highly likely to use a(n):

A) multinational organisation.
B) foreign trade division.
C) international division.
D) export organisation.
E) global organisation.

Question 43

Strategic alliances are partnerships between firms designed to achieve joint objectives.

Question 44

To cover the costs of goods shipped to foreign subsidiaries, many firms set a(n):

A) foreign price.
B) portage price.
C) transfer price.
D) import price.
E) subsidiary price.

Question 45

The factors driving the increased prevalence of strategic alliances are:

A) speeding up new product introduction (time- based competition).
B) pooling to gain operational economies.
C) filling knowledge gaps.
D) building complementary resource capabilities.
E) all of the above

Question 46

A company that mounts a frontal or encirclement attack on the leader in all markets in order to increase its market share and market coverage is known as a:

A) global leader.
B) global follower.
C) global nicher.
D) global challenger.
E) none of the above

Question 47

The approach to organising an international division where each operating unit acts as a sales and profit centre is known as a(n):

A) product specialist unit.
B) world product subsidiary.
C) geographical division.
D) international subsidiary.
E) profit- centre division.

Question 48

In developing alliance strategies, a global follower should consider:

A) the alliance configuration of small units.
B) communication lines and relationships enabling rapid decision- making and implementation.
C) low cost structures.
D) B and C only
E) A, B, and C

Question 49

When a firm either charges less than its costs or less than it charges in its home market, the situation is called:

A) transferring.
B) off- pricing.
C) cost- less.
D) dumping.
E) discounting.

Question 50

A company that engages in rapid imitation of leading products or services and has moderate country market coverage with an emphasis on price- sensitive markets is known as a:

A) global leader.
B) global follower.
C) global nicher.
D) global challenger.
E) none of the above

Question 51

A domestic firm enters into a legal agreement under which qualified foreign firms produce their products in their markets for sale by the domestic marketer under an arrangement called:

A) contract manufacturing.
B) joint ownership.
C) management contracting.
D) joint venturing.
E) licensing.

Question 52

Changing the product to meet local conditions or wants is involved in:

A) product expansion.
B) product standardisation.
C) product adaptation.
D) product invention.
E) straight extension.

Question 53

Brisbane Construction sells the exact same product in all of its markets, domestic and foreign. The firm is following a strategy of:

A) product pushing.
B) product adaptation.
C) straight product extension.
D) product standardisation.
E) product invention.

Question 54

Strategic alliances are partnerships between countries.

Question 55

For many small and medium enterprises, the dominant form of foreign market entry is:

A) contract manufacturing.
B) licensing.
C) franchising.
D) direct exportings.
E) indirect exporting.

Question 56

At the Sydney Retail Fruit Market a case of Egyptian oranges is selling for $10. Frank Battistel of the Riverina Citrus Growers cannot see how such a price is possible. Frank points out that if you take approximately 30% off the retail $10 the shop makes, then deduct the percentage the agent makes, then the percentage the importer makes-add shipping freight and other import costs-the only possible conclusion is that the imported cost price must be less than $1 per case. Frank Battistel is concerned about which international trade practice?

A) grey market pricing
B) dumping
C) second market discounting
D) transfer pricing
E) resale price maintenance

Question 57

Countertrade allows nations which have little hard currency to engage in international trade.

Question 58

Which of the following are obstacles that get in the way of successful strategic alliance partnerships?

A) autonomy of strategic partners
B) desire to learn about each other
C) having the best people committed to the partnership
D) A and C only
E) A, B, and C

Question 59

In managing people in a virtual organisation, elements of trust which are critical success factors include:

A) blind trust is not placed on everyone.
B) trust needs boundaries.
C) trust demands learning.
D) A, B, and C
E) B and C only

Question 60

In order to introduce hamburgers in several countries whose religion prohibits the eating of beef, Burger Co. developed a special soybean hamburger. The firm's action was an example of:

A) product adaptation.
B) demand creation.
C) product innovation.
D) straight extension.
E) product promotion.

Question 61

The challenges and obstacles to strategic alliances include focus on the internal environment, politicking, change and innovation.

Question 62

Joint venturing occurs when a firm teams with foreign companies to produce or market a product or service.

Question 63

Studies on the matching of partners have led to the observation about the success of strategic alliances that ventures are less successful where neither partner is related to its venture.

Question 64

When Nelson Nylons utilises international intermediaries to assist in its international marketing efforts, the firm engages in direct exporting.

Question 65

The Shepparton Cannery favours contract manufacturing as a means of entering foreign markets quickly. Shepparton Cannery could buy out the more successful of these foreign operations if it wishes to strengthen its presence in selected markets although this action might also involve the risk of loss.

Question 66

Studies on the matching of partners have led to the observation about the success of strategic alliances that ventures tend to be more successful where partners are homogenous.

Question 67

A global firm is one that, by operating in more than one country, gains R & D, production, marketing and
financial advantages that are not available to purely domestic competitors.

Question 68

The international marketer must take a whole- channel view of the problem of distributing products to final consumers.

Question 69

Strategic alliances are partnerships between people.

Question 70

One factor encouraging the formation of strategic alliances is the desire to gain operational economies.

Question 71

As a rule, global firms are successful in setting a uniform price all around the world.

Question 72

It would be unusual for a global company to use a standardised advertising theme around the world.

Question 73

The virtual organisation is capable of reducing design to concept time.

Question 74

In international markets, product adaptation involves changing the product to meet local conditions or wants.

Question 75

Strategic alliances have become a preferred business strategy because of the opportunities of e- business and globalisation.

Question 76

Studies on the matching of partners have led to the observation about the success of strategic alliances that ventures last longer between partners of similar cultures, asset sizes and venturing experience levels.

Question 77

In its international marketing efforts, Darwin Diversified is willing to incur higher costs in return for the possibility of greater profits and market share. The firm is likely to employ an adapted marketing mix.

Question 78

The main advantage to a firm forming a strategic alliance is that it is inexpensive.

Question 79

One factor encouraging the formation of strategic alliances is the desire to move into new markets.

Question 80

A global industry is one in which the competitive positions of companies in given local or national markets are affected by their overall global positions.