Deck 9: Country Market Analysis

Question 1

Promoting export performance in Australia is the domain of the Australian Tourism Bureau.

Answer 1

False

Question 2

3M's strategy in the marketplace was used on the basis of entering markets on a small scale to reduce risks.

Answer 2

True

Question 3

A letter of credit states that a bank will pay a specified sum of money to a beneficiary on presentation of particular, specified documents.

Answer 3

True

Question 4

Firms that are proactive with respect to unplanned opportunities don't even consider exporting until their domestic market is saturated.

Question 5

Companies that know how to grow their firm, take advantage of economies of scale, use marketing advantages (unique product, marketing know-how), diversify, build their brand and extend sales of seasonal products need not undertake a country market analysis.

Question 6

While many large firms benefit from international trade and FDI, there are many opportunities for smaller firms to develop successful export capabilities.

Question 7

There are three basic decisions that a firm must make when contemplating foreign expansion. Two of them are:

A) whether there is sufficient infrastructure and skilled workers.
B) the taxation benefits and any other concessions.
C) which markets to enter and when to enter them.
D) whether there is access to adequate transport and resources.

Question 8

A __________ manager seeking international markets will scan a number of country markets and determine the most suitable.

A) reactive
B) proactive
C) junior
D) senior

Question 9

For managers in SMEs without any international experience in exporting, a low-risk strategy is to enter markets that are:

A) technologically and physically close.
B) demographically and socially connected.
C) psychically and economically close.
D) cheap to enter and exit.

Question 10

Export-oriented businesses such as Bindi Wines know that variation and change in international economic conditions, changes in the value of national currencies, the complexities of __________________ and _______________ stability are all significant issues that are largely out of their control but can have serious impacts on market performance and earnings.

A) social responsibility; political
B) transport logistics; political
C) corporate change; social
D) globalisation; income

Question 11

Bindi Wines sees it as a necessity to ____________________________________________________. This is especially true when exporting to the US, which is sometimes referred to as exporting to 52 countries, given the complexity of State-by-State differences.

A) concentrate on niche market segments to establish demand for their quality product
B) establish a relationship with an established in-country import and distribution agent
C) retain control of its distribution network to withstand fluctuations in currencies
D) employ a largely local workforce familiar with work practices and legal requirements

Question 12

By expanding the size of the market, exporting can enable a firm to achieve __________________, thereby lowering its unit costs. Firms that don't export often lose out on significant opportunities for ________________ and cost reduction.

A) globalisation; development.
B) financial gains; operational improvements
C) economies of scale; growth
D) power; technological gains

Question 13

The Minnesota Mining and Manufacturing Co. (3M) built its export strategy around simple principles. These include the following.

A) Enter quickly, limit product lines and use existing marketing strategies.
B) Enter on a small scale, add products once exporting operations are successful and use locals to promote products.
C) Form an alliance, sell products that are already successful and use local resources.
D) Form a joint venture, sell a small selection of products and use existing in-house expertise.

Question 14

Brisbane-based winery, Sirromet, is a successful exporter. It credits its success to entering familiar markets, building long-term relationships and:

A) selling specialised white and red grape vines grown in the area for international markets.
B) selling only to niche markets
C) keeping operating costs low
D) choosing an appropriate distributor

Question 15

Pioneering costs can include the costs of:

A) technological advancement.
B) transport from the home country.
C) relocation costs for home-country staff.
D) business failure.

Question 16

The probability of exporting successfully can be increased by taking a few strategic steps. These include hiring an experienced export consultant, focusing on one or a small number of markets, entering a foreign market on a small scale, and all except which one of the following?

A) Being proactive about seeking export opportunities
B) Devoting attention to building strong relationships
C) Investing in staff and resources for long-term profitability
D) Recognising the time and managerial commitment required

Question 17

Which of the following is a basic decision that a firm contemplating foreign expansion must make?

A) Which religion to support
B) Which language to operate in
C) How to withdraw from markets
D) Scale of entry

Question 18

When researching potential markets, it is critical to identify any _________________ barriers to trade. These can exist in the form of tariff and ______________________ barriers.

A) discriminatory; financial
B) regulatory; non-tariff
C) strategic; geographical
D) operational; resource

Question 19

The first stage of any analysis when deciding to enter a foreign market is to examine the broader economic indicators to obtain an impression of the type of economy the firm is considering undertaking business in, its economic potential and its ____________.

A) managerial skills
B) financial standing
C) degree of risk
D) competitors

Question 20

A company based in Australia is likely to enter the UK market rather than consider a geographically closer market because it is choosing an initial export market based on:

A) products and services.
B) size and timing.
C) culture and language
D) market research and analysis.

Question 21

Other things being equal, the cost-risk trade-off is likely to be least favourable in __________ unstable developing nations that operate with __________________________ economy.

A) economically; an open
B) socially; a closed
C) politically; a mixed or command
D) politically; a free

Question 22

The advantages frequently associated with entering a market early are commonly known as first-mover advantages. One first-mover advantage is the ability to:

A) purchase property at lower prices due to low demand.
B) attract the largest share of foreign investment.
C) create switching costs that tie customers to their products.
D) secure the best-quality resources.

Question 23

The attractiveness of a particular country as a potential market for an international business depends on the balance of _________________________ and _________________________ associated with doing business in that country.

A) timing of entry; advantages and risks
B) costs; risks and potential gains
C) benefits; costs and risks
D) potential for failure; and profits

Question 24

_______________ into a foreign market is one of the most critical aspects of going international.

A) Export strategy
B) Timing of entry
C) Globalisation
D) Diversification

Question 25

A strategic commitment has ____________ impact and is __________________ to reverse.

A) a time; challenging
B) an operational; problematic
C) a financial; possible
D) a long-term; difficult

Question 26

Entering a market on a large scale involves the commitment of:

A) significant resources
B) management and leadership
C) local employees
D) time

Question 27

3M has built its export success on three main principles: enter on a small scale; add additional product lines once exporting operations become successful; and:

A) relocate staff from the home country to start and manage export operations
B) maintain close links with home-country operations
C) be ready to withdraw if profits are not achieved
D) hire locals to promote products

Question 28

A risk-averse firm that enters a foreign market on a _______________ may limit its potential losses, but it may also miss the chance to capture ______________ advantages.

A) trial basis; economy-of-scale
B) small scale; first-mover
C) staged-entry basis; financial
D) global-expansion basis; tax

Question 29

FDI stands for:

A) foreign direct impact.
B) foreign diversification initiative.
C) foreign direct investment.
D) foreign direct internationalisation.

Question 30

Several reasons have been identified for the growth of FDI, including the _____________________________ changes that have been occurring in many of the world's emerging markets.

A) attitude and disposable-wealth
B) political and global
C) social and technological
D) political and economic

Question 31

Poor market analysis, poor understanding of competitive conditions and failure to customise product offerings are common pitfalls of:

A) diversification.
B) globalisation.
C) new product launches.
D) exporting.

Question 32

The great promise of _____________ is that large __________ and profit opportunities are to be found in ____________ markets for most firms in many industries.

A) financing; tax; home
B) diversification; income; local
C) importing; income; external
D) exporting; revenue; foreign