Deck 7: Small Businesses and International Entrepreneurship

Question 1

A small business global culture occurs when

A)Small businesses face global competition.
B)Key decision makers view competition as more domestic than global.
C)Organizations have managerial and worker values that view strategic opportunities as global and not just domestic.
D)Managers give priority to the relevance of national boundaries when conducting international business.

Answer 1

C

Question 2

Global start-ups occur when

A)Companies have consistent licensing agreements.
B)Companies start exporting as soon as they receive their first order.
C)Companies begin as multinationals.
D)Companies move rapidly through the stages of internationalization.

Answer 2

C

Question 3

It is now easier to overcome the barriers to small business internationalization because of all of the following reasons EXCEPT

A)There are more government programs that support small business exporting and sales.
B)Trade agreements (such as NAFTA) are making international trade less complex.
C)Larger organizations are increasingly more willing to share their global expertise with smaller ones.
D)There is a wealth of information regarding international opportunities such as those available on the World Wide Web.

Answer 3

C

Question 4

Which of the following has helped to level the playing field for small businesses wanting to go international?

A)Technology and e-commerce
B)Sources of venture capital
C)Having a headquarters located near a major customer
D)The existence of trade shows

Question 5

The development of a global culture is affected by all of the following characteristics of the key decision makers EXCEPT

A)Ability to perform well at the domestic level.
B)International experience.
C)Perceived psychological distance to foreign markets.
D)Overall attitudes toward international strategies.

Question 6

The small business advantage refers to

A)The energy and creativity entrepreneurs can put in their multinational operations.
B)The ease by which small companies can become global start-ups.
C)The speed by which entrepreneurs can react to changing conditions and capture significant sales before larger companies can react.
D)The number of venture capitalists willing to invest in successful small businesses.

Question 7

Small businesses differ from large businesses when going international primarily in

A)The available participation strategies.
B)The strategies they can use to go international.
C)Their founder's or entrepreneur's influence.
D)The available multinational strategies.

Question 8

Small business barriers to internationalization include all of the following EXCEPT

A)Small size means limited financial and personnel resources for international operations.
B)Top managers with limited international experience.
C)Positive attitudes of top managers about becoming multinationals.
D)Lack of sufficient scale to produce goods or services as efficiently as large companies.

Question 9

Small businesses can potentially have more advantages than larger businesses in the global economy because

A)Small companies can change quickly to take advantage of opportunities in new markets.
B)Larger companies have more slack resources to absorb risk.
C)Small companies require a lot of travel from their CEOs.
D)Small companies have more access to resources.

Question 10

Which of the following is not one of the questions to consider when a small business decides to go international?

A)Do we have a global product or service?
B)Do we have partners with which to go international?
C)Do we have the managerial, organizational, and financial resources to go international?
D)Is there a profitable market for our products or service?

Question 11

Although large businesses have more resources,small businesses have the advantage of:

A)size.
B)time.
C)speed.
D)a global culture.

Question 12

The liabilities of size for small businesses imply that

A)Small businesses can grow as a result of going international.
B)Being small often means it may be more difficult to obtain necessary resources.
C)Small size creates only limited liability.
D)Small and new businesses can only succeed by exporting.

Question 13

During the second stage (Export Management)of the small business model of internationalization,the company

A)Fills international orders only.
B)Specifically seeks export sales.
C)Seeks increased sales from licensing.
D)Sets up a local sales office in another country.

Question 14

All of the following are true about small business CEOs EXCEPT

A)Opening new markets is often the personal responsibility of the CEO.
B)They want to take a break from the daily management of their businesses by going overseas.
C)New international ventures may threaten their family life.
D)Their attitudes towards internationalization is a major factor in international success.

Question 15

When a company sets up a sales branch in a foreign country,it is at what stage of the internationalization of the small entrepreneurial business?

A)Stage 1
B)Stage 2
C)Stage 3
D)Stage 4

Question 16

One of the major advantages of being involved in Stage 5 (Production Abroad)of the stages of internationalization for small businesses is that it

A)Allows the company to cut the costs of direct investment.
B)Allows the company to avoid developing a globally integrated network.
C)Allows the company to gain local advantages such as product adaptation or production effectiveness.
D)Almost insures that the company will survive and prosper.

Question 17

Definitions of small businesses discussed in the text include the following EXCEPT

A)Number of employees.
B)Sales revenue.
C)Industry.
D)Type of product or service.

Question 18

A strategic competitive advantage for breaking into the established pattern of commercial activity is a/an

A)Low cost strategy.
B)Differentiation Strategy.
C)Entry wedge.
D)Participation strategy.

Question 19

An entrepreneur

A)Creates new ventures that seek profit and growth.
B)Is seldom the primary force behind a company's decision to go international.
C)Can accurately predict the risks and uncertainties of his/her ventures.
D)Faces less uncertainty than a multinational.

Question 20

A global start-up is

A)A company that goes global from day one of its life.
B)A company that starts a global strategy after exporting.
C)A company that skips the first stage of the Small Business Model of Internationalization.
D)None of the above

Question 21

Successful strategies for copy cats include all of the following EXCEPT

A)Being the first to change to a new standard.
B)Transferring the location.
C)Seeking abandoned or ignored market.
D)Selling products at a global level.

Question 22

First mover advantage includes all of the following EXCEPT

A)Technological leadership.
B)First access to natural and other resources.
C)Better ability to forecast market conditions.
D)Switching costs.

Question 23

An entry wedge is

A)A strategic competitive advantage for breaking into the established pattern of commercial activity.
B)A competitive opening in an industry.
C)A strategy used by only new companies.
D)None of the above

Question 24

A multinational manager is studying the data on total entrepreneurial activity ratings by country. She is most likely doing this in order to

A)Assess the level of entrepreneurship in a country.
B)Understand available industries.
C)Assess small business failure.
D)Understand opportunities for new ventures.

Question 25

According to the text,which of the following participation strategies do small businesses emphasize?

A)Importing
B)Licensing
C)Foreign direct investment
D)Exporting

Question 26

Switching costs are

A)Expenses involved when a customer switches to a competitor's product.
B)Forms of copycat strategies.
C)The costs incurred by a company when adopting a global standard.
D)None of the above

Question 27

Technological leadership,as a source of first mover advantage refers to

A)A company beginning business as a global start-up.
B)A company that adopts global strategies faster than competitors.
C)A company that moves quickly into a new venture.
D)A company that is the first to use a new technology.

Question 28

Which of the following statements about small businesses in the US is FALSE?

A)Small businesses represent about 99.7% of all employing firms.
B)Small businesses generate about 15% of all new jobs annually.
C)Small businesses employ almost 41% of all high tech workers.
D)Small businesses represent almost 97% of identified exporters.

Question 29

International sales intensity represents

A)A significant size barrier to internationalization.
B)The amount of international sales as a proportion of total sales.
C)The amount of local sales as a proportion of international sales.
D)Is more relevant for larger businesses.

Question 30

Copycat businesses

A)Follow the "me too" strategy.
B)Adapt existing products or services to attract customers.
C)Find a niche or slight innovation to gain market share from existing businesses.
D)All of the above

Question 31

Many multinationals rely on the support and assistance provided by which of the following when entering a new country?

A)Customers
B)Entrepreneurs and small businesses
C)World Bank
D)Trade Shows

Question 32

Future Tech International sells high tech products in Latin America,a market traditionally ignored by many high tech companies.What successful copycat strategy does this move represent?

A)Acquiring existing businesses
B)Becoming a dedicated distributor
C)Seeking abandoned or ignored markets
D)Being the first to change to a new standard

Question 33

Which of the following is NOT a common customer contact technique used by small firms to get find customers?

A)Trade shows
B)Industry advisory boards
C)Government sponsored trade missions
D)Catalog expositions

Question 34

The more common techniques of making international contacts used by small businesses include all of the following EXCEPT

A)Trade shows.
B)Seeking advice from foreign companies.
C)Government sponsored trade missions.
D)Catalogue expositions.

Question 35

First mover advantages occur when

A)A company can begin business as a global start-up.
B)A company adopts global strategies faster than competitors.
C)Company moves quickly into a new venture and establishes the business before other firms can react.
D)A company changes production technology.

Question 36

All of the following are first mover advantages EXCEPT

A)First mover advantages gives the company first access to natural resources.
B)First mover advantages gives the company first access to social resources.
C)First mover advantages reduce switching costs.
D)All of the above are first mover advantages.

Question 37

When demand for a small business is so high in a foreign country that it justifies setting up a local branch,which of the following stages of internationalization is the small business at?

A)Export management
B)Passive exporting
C)Production abroad
D)None of the above

Question 38

The discovery,evaluation and exploitation of market opportunities refers to which of the following?

A)Entrepreneurship
B)International entrepreneurship
C)Small business
D)International opportunities

Question 39

The United Nations and Organization for Economic Cooperation and Development

A)Defines a small business as those having less than 500 employees.
B)Defines a small business as those with less than 100 employees.
C)Defines a small business based on industry and sales revenue.
D)All of the above

Question 40

When a small business uses significant resources to seek increased sales from exporting,it is what stage of internationalization?

A)Stage 1 - Passive exporting
B)Stage 2 - Export management
C)Stage 3 - Export department
D)Stage 4 - Sales branch

Question 41

Discuss some of the advantages that the Internet can offer small businesses when going international.

Question 42

Describe the Small Business Stage Model.

Question 43

Discuss ways that a small business manager can make the contacts necessary to implement an exporting strategy.

Question 44

What are the advantages of a small business going international through incremental stages rather than as a global start-up?

Question 45

What is the first mover advantage? What are the most common sources of first mover advantages? How can a small business benefit from first mover advantage?

Question 46

Identify two or three small business barriers to internationalization.If you were a recently hired manager of a small business facing great opportunities in a foreign market,how would you go about overcoming these barriers.

Question 47

Consider three of the suggested strategic moves for copycat businesses.Which of these strategies might be most successful when expanding into the international market as opposed to the domestic market?

Question 48

Imagine a small business manager asks you,a recent business college graduate,to help her decide whether she should enter the export market.What questions would you ask her and why?

Question 49

How do small businesses and entrepreneurs affect national economic growth and development? Explain why multinationals consider entrepreneurship levels in the country when making their location choices.

Question 50

Why are small businesses important for most economies?