Deck 5: Developing a Global Vision

Question 1

In the context of direct foreign investment,direct investors have the lowest potential reward and the lowest potential risk.

Answer 1

 False

Question 2

Caused by shifting birthrate trends,a demographic dividend often leads to rising labor costs.

Answer 2

 False

Question 3

A company that is heavily engaged in international trade,beyond exporting and importing,is called a multinational corporation.

Answer 3

 True

Question 4

Which of the following is a factor that drives the popularity of imports in the U.S.?

A)​Lower wages compared to other countries that have high average wages
B)Higher number of employees in the countries from where goods are imported
C)Higher prices of products in the countries from where the goods are imported 
D)​Lower capacity of the equipment used for production in the exporting countries

Question 5

Which of the following countries has the highest gross domestic product?

A)​Belwick, whose goods' market value is $100 billion and final service value is $50 billion in two years
B)Sparanthea, whose intermediate goods value is $200 billion and intermediate service value is $50 billion in a quarter
C)Zaneland, whose final goods value is $120 billion and intermediate goods value is $20 billion
D)​Acquardica, whose final goods value is $170 billion and final service value is $90 billion

Question 6

Small businesses are hesitant to involve in global business because it:

A)​limits the access to advanced technologies in less developed countries.
B)slows down the rate at which people's living standards increase.
C)involves various trade laws or tariffs. 
D)​empowers governments to abuse the freedom and property of their citizens.

Question 7

Franchising is a form of exporting.

Question 8

The four Ps of global marketing strategy are product,place,promotion,and price.

Question 9

When a company invests in a foreign firm and holds active ownership of the firm,then the company is said to be in a joint venture with the foreign firm.

Question 10

The surge in global trade in recent years has added to strains and charges for all forms of transport.

Question 11

Firms that want to become involved in licensing or to become heavily involved in global marketing may engage in contract manufacturing.

Question 12

Since Facebook,YouTube,and other social media are popular around the world,firms both large and small have embraced social media marketing.

Question 13

Of all the types of managers,managers of global social media campaigns are the ones who need not be aware of the cultures of the countries in which they operate.

Question 14

In the context of distribution,ocean shipping is faster than airfreight.

Question 15

Opening an e-commerce site on the Internet makes it difficult for a company to gain recognition in the international marketplace.

Question 16

A multidomestic strategy occurs when multinational firms enable individual subsidiaries to compete independently in domestic markets.

Question 17

The final step in creating a marketing mix is developing a thorough understanding of the global target market.

Question 18

Average family incomes are higher in the more developed countries than in the less developed countries.

Question 19

Yuncen Foods is a food manufacturer based in Lumberne.It gets over half of its revenue from international sales.It has been consistently ranked as the best foods manufacturer in the world.Given this information,which of the following statements is true of Yuncen Foods?

A)​The company is overlooking the threats posed by foreign companies in Lumberne.
B)Packing of frozen foods are outsourced to other countries.
C)The company is not competitive in its home country.
D)​Geographic and political barriers are irrelevant to the company's business decisions.

Question 20

Global marketing refers to marketing that targets markets throughout the world.

Question 21

Fresnas Corp.,a company that designs and manufactures apparels,practices inshoring.Given this information,which of the following is most likely to be true of Fresnas Corp.?

A)​It keeps its research team in close proximity.
B)It faces increased shipping and transportation costs.
C)It outsources its manufacturing jobs to other countries.
D)​It faces a lot of time delays and communication issues.

Question 22

Which of the following companies is in the first stage of global business?

A)​D Feet Corp., which manufactures footwear in a small town in Lucitona and sells the footwear to several countries around the world
B)Laelle Inc., which is based in Euphonia and has set up several subsidiaries to manage its business in another country
C)Fournotts Bros., which is based in Datford and opens a new line of business in a neighboring country
D)​Rues and West Inc., which operates online shopping sites around the world

Question 23

Which of the following is a reason for practicing outsourcing in the U.S.?

A)​Increased corporate growth
B)Chances of production delays
C)Rising wages in the developing world
D)​Improperly designed parts and products 

Question 24

The management of Irving Inc.,an apparel company based in Letonia,decides to expand the company's operations to several other countries.Given this information,which of the following strategies can be adopted by the management to succeed in the foreign environment?

A)​It can sell the same clothes it sells in its home country in the other countries too.
B)It can modify its Web site according to the foreign countries' culture.
C)It can limit personal selling to buyers in the foreign country.
D)​It can solely rely on free translation software to translate slogans and instructions.

Question 25

Which of the following is a difference between a quota and a boycott?

A)​A boycott is a limit on the amount of goods entering a country, whereas a quota is a tax levied on goods entering a country.
B)A boycott is the revenue received from international trade, whereas a quota is the revenue received from domestic trade.
C)A boycott is used to include all foreign competition, whereas a quota is used by governments to exclude companies from countries with which they have a political dispute.
D)​A boycott is the exclusion of all products from certain countries or companies, whereas a quota is a means of protection from foreign competition.

Question 26

_____ occurs when several countries agree to work together to form a common trade area that enhances trade opportunities.

A)​Dumping
B)Market grouping
C)Joint venture
D)​Direct foreign investment

Question 27

Unlike firms that are in the second stage of global business,third-stage multinational companies:

A)​sell products only in one country.
B)have their top executives and core corporate functions in different countries.
C)operate an entire line of business in another country.
D)​set up foreign subsidiaries to handle sales in one country.

Question 28

_____ was founded in 1945,one year after the creation of the World Bank,to promote trade through financial cooperation and eliminate trade barriers in the process.

A)​The European Union (EU)
B)The World Trade Organization (WTO)
C)The North American Free Trade Agreement (NAFTA)
D)​The International Monetary Fund (IMF)

Question 29

_____ is the largest Latin American trade agreement that includes Argentina,Bolivia,Brazil,Chile,Colombia,Ecuador,Paraguay,Peru,Uruguay,and Venezuela.

A)​Mercosur
B)General Agreement on Tariffs and Trade (GATT)
C)The Uruguay Round
D)​The North American Free Trade Agreement (NAFTA)

Question 30

Which of the following statements is true of a company that is in the second stage of global business?

A)​It maintains a virtual executive suite. 
B)It sets up foreign subsidiaries to handle sales in one country.
C)It runs business entirely through the Internet.
D)​It has its entire operations in its home country.

Question 31

A company is doomed to failure in a foreign country if it _____.

A)​does not understand the foreign country's culture
B)excessively focuses on translating product names to the foreign country's language 
C)varies its marketing mix according to the foreign customers
D)​pays attention to the foreign country's demographics

Question 32

Aztic Inc.,a manufacturer of sports goods,plans to expand its operations to various other countries.During market research,it avoids countries where the dominant population is mostly rural.In this case,Aztic Inc.is assessing the _____ of the countries.

A)​political structure
B)natural resources
C)legal environment
D)​demographic makeup

Question 33

During the Uruguay Round,_____ replaced the General Agreement on Tariffs and Trade (GATT).

A)​the European Union (EU)
B)the World Trade Organization (WTO)
C)the North American Free Trade Agreement (NAFTA)
D)​the International Monetary Fund (IMF) 

Question 34

Melrow Inc.,a U.S.firm,suffers heavy losses and lays off many of its employees.As a measure to reduce its manufacturing costs,it shifts its production units to another country where labor costs are less.In this scenario,Melrow Inc.is engaged in _____.

A)​licensing
B)outsourcing
C)franchising
D)​inshoring

Question 35

Which of the following is a disadvantage of outsourcing?

A)​It reduces corporate growth.
B)It reduces productivity and revenue growth.
C)It causes production delays.
D)​It increases energy costs in the U.S.

Question 36

A difference between inshoring and outsourcing is that inshoring:

A)​provides higher corporate growth than outsourcing.
B)provides higher revenue growth than outsourcing.
C)reduces the productivity of a firm. 
D)​involves long-distance shipping and, hence, high transportation costs.

Question 37

_____ refers to the exclusion of all products from certain countries or companies.

A)​Tariff
B)License
C)Boycott
D)​Quota

Question 38

 A(n)_____ is a limit on the amount of a specific product that can enter a country.

A)​quota
B)tariff
C)excise duty
D)​exchange control

Question 39

Which of the following statements is true of globalization?

A)​It expands economic freedom and increases the living standards of people.
B)It increases prices and decreases product and service quality. 
C)It has curbed the growth of middle class in developing countries.
D)​It leads to monopoly of domestic producers.

Question 40

 _____ is a trade agreement that has dramatically lowered trade barriers worldwide and led to the creation of the World Trade Organization.

A)The European Union​
B)The General Agreement on Tariffs and Trade 
C)The North American Free Trade Agreement 
D)​The Uruguay Round

Question 41

Which of the following is a similarity between joint ventures and licensing agreements?

A)​Both involve joining with a foreign company to create a new entity. 
B)Both depend heavily on contract manufacturing.
C)Both are free from government interference.
D)​Both are free from risks.

Question 42

Sinesia is a country that has minimal sources of potable water.Given this information,which of the following is most likely to happen?

A)​Sinesia's international marketing will not be affected because petroleum is the only factor that affects international marketing.
B)Sinesia will remain as an importer of foodstuffs.
C)Sinesia will be an attractive target for military intervention. 
D)​Sinesia's wealth will be equal to that of the countries with rich sources of water.

Question 43

Nessca Motors,a well-known company based in Nebolina,manufactures engines.Its management recently signed a joint venture with Singletone Inc.,a company based in Trinitia.Given this information,which of the following statements will most likely be true?

A)​The government of Trinitia will restrict Nessca Motors entry to the country.
B)Nessca Motors and Singletone Inc. will switch to contract manufacturing as the next step.
C)Nessca Motors may buy a part of Singletone Inc.
D)​Singletone Inc. will pay royalty to Nessca Motors.

Question 44

In _____,all or part of the payment for goods or services is in the form of other goods or services.

A)​countertrade
B)price fixing
C)dumping
D)​product adaptation

Question 45

_____ is the sale of an exported product at a price lower than that charged for the same or a like product in the "home" market of the exporter.

A)​Exporting
B)Dumping
C)Boycotting
D)​Contract manufacturing

Question 46

Explain the four stages of multinational corporations.

Question 47

In a direct foreign investment,which of the following statements is true of direct investors?

A)​They do not have controlling interest of a firm in direct foreign investment.
B)They possess the lowest potential risk.
C)They have the highest potential reward.
D)​They have low minority interest in the foreign firm.

Question 48

Discuss exports in the U.S.

Question 49

Unlike in joint ventures,in contract manufacturing,_____.

A)​a domestic firm need not invest in overseas plants and equipment.
B)a domestic firm buys part of a foreign company.
C)a domestic firm joins with a foreign company to create a new entity.
D)​a domestic firm does not agree on management strategies and policies.

Question 50

Khokho's Coffee House was the first company to introduce flavored coffee in the global market.It sells coffee in several different flavors,such as blueberry,cinnamon,and cranberry,based on the flavors preferred in each country.In this scenario,Khokho's Coffee House is involved in _____.

A)​product invention
B)promotion adaptation
C)global marketing standardization 
D)​product adaptation

Question 51

Which of the following is a difference between product invention and product adaptation?

A)​Product invention involves altering the promotional strategies for a product, while product adaptation does not involve altering such strategies.
B)Product invention takes the marketing mix into consideration, while product adaptation does not take it into consideration.
C)Product invention involves drastically changing an existing product, while product adaptation involves slightly altering a basic product.
D)​Product invention applies only to products that are sold in local markets, while product adaptation applies to products all around the world.

Question 52

The owners of Fashion Spell,an apparel store based in the town of Lumberne,want to expand the store's business all over the world.In this case,which of the following strategies can help the owners of Fashion Spell achieve their objectives?

A)​Opening a Web page
B)Being sensitive to the culture of citizens in Lumberne
C)Acting as an export broker
D)​Countertrading with foreign companies

Question 53

Currency markets operate under a system of _____ in which the prices of different currencies move up or down based on the demand for and the supply of each currency.

A)​countertrade
B)floating exchange rates
C)dumping
D)​contract manufacturing

Question 54

A(n)_____ is an intermediary who brings a buyer and a seller together.

A)​licenser
B)export broker
C)contract manufacturer
D)​export merchant

Question 55

The management of Vimonland Theme Park sells the proprietary rights of all the park rides to an investment company to operate one of its franchise in a foreign country.The investment company gains most of the profits from the newly established theme park while paying the management of Vimonland Theme Park a percentage of its revenue as royalties.In this case,Vimonland Theme Park is a _____.

A)​licensor
B)buyer for export
C)contract manufacturer
D)​licensee

Question 56

In the context of external environment,which of the following is true of natural resources?

A)​Steep declines in the price of oil in 2014 and 2015 had a positive impact on America's oil producers.
B)Petroleum is the only natural resource that affects international marketing.
C)Vast differences in natural resources result in minor shifts of wealth among countries.
D)​The past decade has witnessed shortage of natural resources.

Question 57

Maria Apparel is a well-known apparel store.The owners of the store want the store to go global; hence,they have opened a Web site.Given this information,which of the following statements is true?

A)​It will be difficult for Maria Apparel to go global through Internet.
B)Maria Apparel is free from old brick-and-mortar rules, regulations, and habits.
C)Opening a Web site immediately puts Maria Apparel in the international marketplace.
D)​Maria Apparel will stop selling products in its physical stores.

Question 58

Which of the following is a similarity between export brokers and export agents?

A)​Both act as hired purchasing agents for foreign customers operating in the exporter's home market.
B)Both live in foreign countries and assist in international trade.
C)Both assume all risks associated with selling a manufacturer's product in the international market.
D)​Both allow manufacturers to retain title for products.

Question 59

 A U.S.licensor will be most successful in maintaining effective control over licensees and preventing them from voiding the licensor's contract by:

A)​using lawyers from both countries to write the licensing agreement.
B)insisting that all licensees have a published code of ethics.
C)receiving all the revenue earned by the licensees.
D)​locally registering patents and trademarks to the U.S. firm and not to the licensees.

Question 60

D'Costas,an authentic Sparanthean restaurant,has many branches all over the world.The taste and quality of the food served is same across all its branches.Based on this information,D'Costas is most likely following the strategy of _____.

A)​global marketing localization
B)product adaptation
C)product adaptation
D)​global marketing standardization

Question 61

Explain franchising.

Question 62

Why do firms that enter into foreign trade need to adhere to the principles of the marketing mix?

Question 63

Write a note on the economic factors that influence the external business environment.

Question 64

Explain the major role played by the Internet and social media in global marketing.

Question 65

Explain the legal structures that affect international trade.