Deck 13: Entry and Expansion

Question 1

________ is characterized by the acquisition of market share abroad and by increased sales.

A)Effectiveness
B)Efficiency
C)Competitive strength
D)Profitability
E)Resourcefulness

Answer 1

A

Question 2

Of the following,which is NOT a proactive motivation to firms for international business?

A)Unique products
B)Technological advantage
C)Overproduction
D)Exclusive information
E)Tax benefit

Answer 2

C

Question 3

A measure resulting from the combination of physical and mental distance is known as ________.

A)psychological distance
B)logical distance
C)emotional distance
D)psychosomatic distance
E)intellectual distance

Answer 3

A

Question 4

The carrying out of the decision to export-- that is,the implementation of international business transactions--is the primary responsibility of the ________ department.

A)accounting
B)marketing
C)human resources
D)collections
E)sales

Question 5

________ refers to the firm's position compared to other firms in the industry,and,due to the benefits of international experience,is likely to grow.

A)Effectiveness
B)Efficiency
C)Competitive strength
D)Profitability
E)Resourcefulness

Question 6

According to the Focus on Entrepreneurship box in chapter 13,Dan Kelley,CEO of Tierra Dynamic Company,boosted international sales from zero to 25 percent of annual revenues.Of the following,what was most important in the international success of Tierra Dynamic Company?

A)Company executives waited for potential customers to seek out the company's products.
B)The company proactively went for the world.
C)The company relied on its reputation to bring success since it had been family-owned for years.
D)The company realized that international customers had the same needs as domestic customers.
E)The company avoided using outside sources of information and support since it had been successful on its own.

Question 7

What are the two ways firms can be involved in exporting and importing?

A)Indirect or direct
B)Accidental or deliberate
C)Franchising or licensing
D)Fast or slow
E)Unintentional; purposeful

Question 8

________ is manifested later by rising profitability.

A)Effectiveness
B)Efficiency
C)Competitive strength
D)Profitability
E)Resourcefulness

Question 9

Firms with ________ motivations go international because they want to; those with ________ motivations go international because they have to.

A)responsive; eager
B)hands-on; receptive
C)zealous; impressionable
D)reactive; proactive
E)proactive; reactive

Question 10

International activities may enable the firm to increase its output and therefore rise more rapidly on the learning curve.The Boston Consulting Group has shown that the doubling of output can reduce production costs up to ________ percent.

A)10
B)20
C)30
D)50
E)75

Question 11

Research has shown that U.S.firms perceive Canada to be much closer ________ than Mexico.

A)physically
B)mentally
C)emotionally
D)psychologically
E)intellectually

Question 12

XYZ Computer Company has been established as an international from its inception.It uses e-business on a regular basis to reach out to a large number of customers across the globe.XYZ Computer Company is a(n)________ firm.

A)sogoshosha
B)unsolicited
C)direct
D)glocal
E)born global

Question 13

Participation by a firm in international business through an intermediary,in which the firm does not deal with foreign customers or firms is called _________.

A)transaction cost theory
B)indirect involvement
C)direct involvement
D)royalty
E)born global

Question 14

Sarah's Shoe Shack had plans to be strictly domestic.One day,a customer from France happened upon the Sarah's Shoe Shack corporate website and decided to place an international order.The firm has since grown and now exports to customers throughout Europe.Sarah's Shoe Shack can be called a(n)________.

A)export management company
B)accidental exporter
C)export trading company
D)turnkey operation
E)sogoshosha

Question 15

Firms that are most successful in international business are usually motivated by ________ factors.

A)physical
B)psychological
C)reactive
D)proactive
E)emotional

Question 16

Participation by a firm in international business in which the firm works with foreign customers or markets to establish a relationship is referred to as ________.

A)transaction cost theory
B)indirect involvement
C)direct involvement
D)royalty
E)born global

Question 17

An unplanned business opportunity that arises as a result of another firm's activities is known as:

A)Born global
B)Cross-marketing activities
C)Export management companies
D)Unsolicited orders
E)Indirect involvements

Question 18

Best Candy Company is located in Italy within 40 miles of the French border.The Italian company often does business with the French but does not perceive itself as going abroad since France is a neighboring country.Which of the following major reactive motivations is playing a role in the international activities of Best Candy Company?

A)Competitive pressures
B)Stagnant or declining domestic sales
C)Saturated domestic markets
D)Proximity to customers and ports
E)Overproduction

Question 19

What is the major proactive motivation to firms for international business?

A)Profits
B)Competitive pressures
C)Excess capacity
D)Tax benefits
E)Economies of scale

Question 20

Satisfactory international performance can be achieved in three ways: ________,________,and ________.

A)efficiency; competitive strength; hardiness
B)effectiveness; efficiency; competitive strength
C)competitive strength; motivation; resourcefulness
D)adequate capital; competitive strength; motivation
E)hardiness; resourcefulness; efficiency

Question 21

A reciprocal arrangement whereby each partner provides the other access to its markets for a product is referred to as ________.

A)informal cooperation
B)cross-marketing activities
C)joint ventures
D)contract manufacturing
E)licensing

Question 22

What does EMC stand for?

A)Export Multinational Corporation
B)Excellent Multinational Company
C)Economy Management Corporation
D)Export Management Company
E)Economy Management Company

Question 23

The Export-Import Bank in the United States,the Australian Trade Commission in Australia,and the Export Development Corporation in Canada are all examples of:

A)Export management companies
B)Trading companies
C)Private-sector facilitators
D)Public-sector facilitators
E)Strategic alliances

Question 24

In ________ agreements,partners work together without a binding agreement.This arrangement often takes the form of visits to exchange information about new products,processes,and technologies or may take the more formal form of the exchange of personnel for limited amounts of time.

A)informal cooperative
B)contractual agreement
C)joint venture
D)consortia
E)licensing

Question 25

Because they share a common business objective,Texas Instruments has reported agreements with companies such as IBM,Alcatel,and L.M.Ericsson.This is an examples of a ________.

A)strategic alliance
B)joint venture
C)franchise
D)turnkey operation
E)management contract

Question 26

Mitsubishi,Mitsui,and C.Itoh are the ________ of Japan.

A)strategic alliances
B)sogoshosha
C)agents
D)distributors
E)accidental exporters

Question 27

Benefits of ________ are to improve company focus on higher value-added activities,to gain access to world-class capabilities,and to reduce operating costs.However,it has been criticized because of the pressure it puts on the contractors to cut prices and,thereby,labor costs.

A)trademark licensing
B)complementary marketing
C)management contracts
D)contract manufacturing
E)cross-marketing activities

Question 28

A specialized form of management contract between a customer and an organization to provide a complete operational system together with the skills needed for unassisted maintenance and operation is the ________.

A)turnkey operation
B)transaction cost theory
C)sogoshosha
D)cross-marketing activity
E)management contract

Question 29

Of the following,which is NOT an example of an international intermediary?

A)Export management companies
B)Trading companies
C)Private-sector facilitators
D)Public-sector facilitators
E)Strategic alliances

Question 30

Which of the following is NOT true of licensing?

A)It requires capital investment and detailed involvement with foreign customers.
B)It provides an opportunity to exploit research and development already conducted.
C)It may provide a means by which foreign markets can be tested without major involvement of capital or management time.
D)It is a very limited form of foreign market participation and does not in any way guarantee a basis for future expansion.
E)It may provide a mechanism for corporations in industrialized countries to capitalize on older technology.

Question 31

A significant reason for ________ is market entry and support of global operations.

A)direct involvement
B)indirect involvement
C)equity participation
D)turnkey operations
E)contract manufacturing

Question 32

The parent company,Denny's,allows independent entities to sell its products.In addition,the independent entities can use the Denny's name,production,and marketing techniques.Denny's is an example of a(n)________.

A)strategic alliance
B)joint venture
C)franchise
D)distributor
E)agent

Question 33

An agreement in which one firm permits another to use its intellectual property in exchange for compensation is known as a ________.

A)licensing agreement
B)franchising agreement
C)manufacturing contract
D)turnkey operation
E)management contract

Question 34

An example of a________ is New United Motor Manufacturing Inc.(NUMMI),the collaboration between Toyota and GM.Toyota needed direct access to the U.S.market,while GM benefited from the technology and management approaches provided by its Japanese partner.

A)strategic alliance
B)joint venture
C)licensing agreement
D)management contract
E)turnkey operation

Question 35

When operating as a(n)________,the export management corporation purchases products from the domestic firm,takes title,and assumes the trading risk.

A)agent
B)distributor
C)sogoshosha
D)licensor
E)franchisor

Question 36

The reasons for establishing a ________ can be divided into three groups: (1)government policy or legislation; (2)one partner's needs for other partners' skills; and (3)one partner's needs for other partners' attributes or assets.

A)strategic alliance
B)joint venture
C)licensing agreement
D)management contract
E)turnkey operation

Question 37

When working as a(n)________,the export management company is primarily responsible for developing foreign business and sales strategies and establishing contacts abroad.

A)agent
B)distributor
C)sogoshosha
D)licensor
E)franchisor

Question 38

Nestle and General Mills had an agreement whereby Honey Nut Cheerios and Golden Grahams were made in General Mill's U.S.plants and shipped in bulk to Europe for packaging by Nestle.Such an arrangement is called ________.

A)trademark licensing
B)managerial commitment
C)indirect involvement
D)direct involvement
E)complementary marketing

Question 39

Multinational companies offer ________,selling their expertise in running a company while avoiding the risk or benefit of ownership.

A)trademark licensing
B)complementary marketing
C)management contracts
D)contract manufacturing
E)cross-marketing activities

Question 40

A ________ can be defined as the participation of two or more companies in an enterprise in which each party contributes assets,has some equity,and shares risk.

A)strategic alliance
B)joint venture
C)licensing agreement
D)management contract
E)turnkey operation

Question 41

Firms are always aware of when they are indirectly exporting and importing.

Question 42

Some of the psychological distance seen by firms is based on perception rather than reality.

Question 43

Competitive pressures,overproduction,and excess capacity are all reactive motivations for a firm to go international.

Question 44

Management is often much too preoccupied with short-term,immediate problems to engage in sophisticated long-range planning.As a result,many firms are simply not interested in international business.

Question 45

According to the Focus on Culture box in chapter 13,for most of the history of television,American programming has dominated the airwaves in the Unites States and abroad.

Question 46

Profit advantage is one example of a major reactive motivation for a firm to go international.

Question 47

An international business alternative in which the firm sells its expertise in running a company while avoiding the risk or benefit of ownership is called contract manufacturing.

Question 48

Power conflicts between export management companies and clients are not an issue because laws have been enacted to prevent and resolve such conflicts.

Question 49

Tierra Dynamic Company,a small Phoenix-based environmental cleanup company,boosted international sales from zero to 25 percent of annual revenues by proactively going for the world.

Question 50

Trademark licensing permits the names or logos of designers,literary characters,sports teams,or movie stars to appear on clothing,games,foods and beverages,gifts and novelties,toys,and home furnishings.

Question 51

To combat the high costs and risks of research and development,research consortia have emerged in the United States,Japan,and Europe.

Question 52

Firms with proactive motivations go international because they have to; those with reactive motivations go international because they want to.

Question 53

Market development,risk sharing,and resource sharing are reasons for interfirm cooperation.

Question 54

Private and public sector facilitators supply knowledge and information to a firm as well as participate in the transaction.

Question 55

The expansion or contraction of franchising is unaffected by the global economic climate.

Question 56

The equity alliances---minority ownership,joint ventures,and consortia---feature the most extensive commitment and shared control.

Question 57

A 1984 law that allows both domestic and foreign firms to participate in joint basic-research efforts without fear of U.S.antitrust action is called the ________.

A)Free Joint Venture Agreement
B)No Fear Antitrust Act
C) Joint Venture Liberation Act
D)North American Free Trade Agreement
E)Joint Research and Development Act

Question 58

Managers of firms with a strong international performance typically are active,aggressive,and display a high degree of international orientation.

Question 59

The first requirement of interfirm cooperation is ________.

A)to have adequate capital
B)to have experienced management
C)to employ dedicated individuals
D)to find the right partner
E)to find the right location

Question 60

International success requires the firm to be a risk-taker and firms must realize that satisfactory international performance takes time.

Question 61

Participation by a firm in international business through an intermediary,in which the firm does not deal with foreign customers or firms is referred to as ________.

Question 62

The more informal the arrangement between firms,the greater care that needs to be taken when negotiating the agreement.

Question 63

________ is a measure resulting from the combination of physical and mental distance.

Question 64

________ allow collaboration among firms,often similar to joint ventures.

Question 65

The central driver of internationalization is the level of profits to be gained.

Question 66

A newly founded firm that,from its inception,is established as an international business is called ________.

Question 67

The result of 1982 legislation to improve export performance of small and medium-sized firms,the ________ allows businesses to band together to export or offer export services.

Question 68

A representative or intermediary for the firm that purchases products from the firm,takes title,and assumes the selling risk is called a(n)________.

Question 69

A special form of licensing is ________ licensing,which provides someone the right to use an established brand symbol in exchange for payment.

Question 70

A form of licensing that allows a distributor or retailer exclusive rights to sell a product or service in a specified area is called ________.

Question 71

Firms which participate in international trade due to outside demand rather than based on gradual inside planning are called ________.

Question 72

________ is the thought that the carrying out of an interaction takes resources and will cause expenses.

Question 73

________ occurs when a firm gives a license to another firm to produce,package,or market its product.

Question 74

The compensation paid by one firm to another under an agreement is called ________,

Question 75

A representative or intermediary for the firm that works to develop business and sales strategies and that develops contacts is called a(n)________.

Question 76

The desire and drive on the part of management to act on an idea and to support it in the long run is called ________.

Question 77

Firms that specialize in performing international business services as commission representatives or as distributors are known as ________.

Question 78

Under a(n)________,one firm permits another to use its intellectual property in exchange for compensation.

Question 79

Participation by a firm in international business in which the firm works with foreign customers or markets to establish a relationship is called ________.

Question 80

________ are an unplanned business opportunities that arises as a result of another firm's activities.