Deck 9: Global Market Entry Strategies

Question 1

All of the following are major external criteria for making a decision as to a mode of entry into a foreign market EXCEPT:

A)company leadership.
B)market size and growth.
C)need for control.
D)government regulations.
E)local infrastructure.

Answer 1

A

Question 2

Which of the following is a step in the market entry decision process?

A)Forecast a corporate budget.
B)Conduct a marketing audit.
C)Decide on a mode of entry.
D)Review transportation strengths.
E)Analyze domestic demand.

Answer 2

C

Question 3

When Coca-Cola looks at per capita income and the number of minutes that it would take for somebody to work to be able to afford a Coca-Cola product,the company is
Following which of the following steps of the initial screening process for
Market entry?

A)indicator and data selection.
B)analyze parallel strengths and weaknesses of the market.
C)determine the importances of country indicators.
D)rate the countries in the pool on each indicator.
E)compute overall scores for each country.

Answer 3

A

Question 4

One method of assessing whether a company should enter a foreign market or not is to use an opportunity matrix.To use such a matrix,the marketer should assess high,
Moderate,and low opportunities as measured on business and political risk and
___________________ scales or cells.

A)demand
B)financial constraints
C)market opportunities
D)market sensitivity
E)distance from home market

Question 5

Wrigley,the U.S.chewing gum manufacturer,has not been interested in most Latin American markets because many of the local governments imposed ownership
Restrictions.This would be an example of ________________ in markets.

A)finding opportunities
B)"weeding out"
C)cross-fertilization
D)demand conflict
E)unfairness

Question 6

The ____________________ of a market refers to the country's distribution system, transportation network,and communication system.

A)demographic environment
B)infrastructure
C)logistical
D)physical distribution
E)physical infrastructure

Question 7

In global market entry,all of the following are entry decisions that must be made by management before entering an international market EXCEPT:

A)decide on the time of entry.
B)decide on the target product/market.
C)decide on the goals of the target markets.
D)decide on the mode of entry.
E)decide on the target budget.

Question 8

Which of the following most accurately describes the first step in the market entry decision process?

A)Decide on the goals of the target markets.
B)Decide on the mode of entry.
C)Decide on the time of entry.
D)Decide on the target product/market.
E)Decide on the marketing mix plan.

Question 9

In the mode of entry,many companies see liaison office as a low-cost ___________________.

A)joint venture
B)export management company
C)listening post
D)contract exporter
E)alliance post

Question 10

When Colgate-Palmolive sees prospects in countries with purchasing power as a major driver behind market opportunities and Coca-Cola looks at per capita income
And the number of minutes that it would take someone to work to be able to afford a
Coca-Cola product,they are following which of the following steps of the initial
Screening process for market entry?

A)indicator and data selection.
B)analyze parallel strengths and weaknesses of the market.
C)determine the importances of country indicators.
D)rate the countries in the pool on each indicator.
E)compute overall scores for each country.

Question 11

Markets can be classified in four types of countries based on their respective market attractiveness.Hong Kong and Singapore would fall into which of the types listed
Below (where the purpose would be to gather intelligence and establish a network)?

A)platform countries.
B)emerging countries.
C)maturing and established countries.
D)growth countries.
E)none of the above.

Question 12

When marketers are making the decision to enter an international market or not,the final step in the decision process is generally to:

A)decide on a control system to monitor the performance of the entered market.
B)decide on the target product/market.
C)decide on the goals of the target markets.
D)decide on the mode of entry.
E)decide on the time of entry.

Question 13

Markets can be classified in four types of countries based on their respective market attractiveness.All of the following are part of the classification scheme EXCEPT:

A)platform countries.
B)emerging countries.
C)low-tech countries.
D)growth countries.
E)maturing and established countries.

Question 14

The goals of a preliminary screen to determine market opportunities are to minimize mistakes of ignoring countries that offer viable opportunities for the product and:

A)offending local governments.
B)offending local cultures.
C)offending local merchants.
D)violating local advertising laws.
E)not wasting time on countries that offer little or no potential.

Question 15

To identify market opportunities for a given product or service,the international marketer usually starts off with a large pool of candidate countries.To narrow down
This pool,the company will typically do a(n)_______________________.

A)internal audit.
B)external audit.
C)cross-border budget.
D)preliminary screen.
E)econometric analysis.

Question 16

The four-step procedure that can be employed for the initial screening process includes all of the following EXCEPT:

A)select indicators and data selection.
B)analyze parallel strengths and weaknesses of the market.
C)determine the importances of country indicators.
D)rate the countries in the pool on each indicator.
E)compute the overall scores for each country.

Question 17

A four-step procedure that can be employed for the initial screening process includes the following EXCEPT:

A)select indicators and collect data.
B)determine importance of country indicators.
C)hire outside consultants to do a marketing audit.
D)rate the countries in the pool on each indicator.
E)compute overall score for each country.

Question 18

When marketers are making the decision to enter an international market or not,the first step is generally to:

A)decide on the target budget.
B)decide on the target product/market.
C)decide on the goals of the target markets.
D)decide on the mode of entry.
E)decide on the time of entry.

Question 19

The key determinant in the market entry choice decisions is the:

A)risk.
B)local infrastructure.
C)flexibility.
D)internal resources and assets.
E)market size and growth potential.

Question 20

Markets can be classified in four types of countries based on their respective market attractiveness.Which of the following of those types can be used to gather
Intelligence and establish a network?

A)platform countries.
B)emerging countries.
C)maturing and established countries.
D)growth countries.
E)none of the above.

Question 21

In the area of exporting,a middleman could be an __________________________.

A)export outsourcing company
B)export management company
C)export production company
D)export specialist company
E)export manufacturing company

Question 22

______________________ means that the firm enters into an agreement with another firm (local or foreign)where the partner will use its distribution network
To sell the exporter's goods.

A)Licensing
B)Parallel exporting
C)Cooperative exporting
D)Venture exporting
E)Indirect exporting

Question 23

Companies that plan to engage in exporting have a choice between indirect, _________________,and direct exporting.

A)licensing
B)parallel
C)cooperative
D)venture
E)summation

Question 24

___________________ has disadvantages.Chief among these are that the company has little or no control over the way their product is marketed in a foreign country,
Lack of adequate sales support (among other support variables)can lead to poor sales,
And bad decisions made by an intermediary can damage the corporate image.

A)Licensing
B)Parallel exporting
C)Cooperative exporting
D)Direct exporting
E)Indirect exporting

Question 25

Markets can be classified in four types of countries based on their respective market attractiveness.Which of the following countries would most likely be listed as
A growth country?

A)Hong Kong.
B)Vietnam.
C)China.
D)Taiwan.
E)Japan.

Question 26

One of the main advantages of direct exporting over indirect exporting is that the exporter has more:

A)leverage.
B)risk.
C)control over its operations.
D)budget.
E)leadership.

Question 27

From a transaction-cost analysis perspective,market failure typically happens when transaction-specific assets become _________________ and therefore more high-
Control situations are needed.

A)optional
B)valuable
C)expendable
D)less-valuable
E)weaker

Question 28

Cooperative exporting is also called:

A)specialist exporting.
B)lean exporting.
C)long-range exporting.
D)backward exporting.
E)piggyback exporting.

Question 29

Most companies start their international expansion with _________________.

A)exporting
B)joint ventures
C)licensing
D)franchising.
E)contract manufacturing.

Question 30

A _________________________ perspective argues that the desirable governance structure (high- versus low-control mode)will depend on the comparative transaction
Costs (the costs of running an operation).

A)demand-delivery
B)just-in-time management
C)management-by-objectives
D)quantity-cost allocation
E)transaction-cost analysis

Question 31

Markets can be classified in four types of countries based on their respective market attractiveness.Which of the following countries would most likely be listed as a
Maturing/established market?

A)China.
B)Burma.
C)India.
D)Taiwan.
E)China.

Question 32

_______________________ means that the firm uses a middleman based in its home market to do the exporting.

A)Licensing
B)Contract manufacturing
C)Cooperative exporting
D)Venture exporting
E)Indirect exporting

Question 33

______________________ means that the company sets up its own export organization within the company and relies on a middleman based in a
Foreign market (foreign distributor).

A)Licensing
B)Parallel exporting
C)Cooperative exporting
D)Direct exporting
E)Indirect exporting

Question 34

___________________ is a contractual strategy where the firm offers some proprietary assets to a foreign company in exchange for royalty fees.

A)Licensing
B)Parallel exporting
C)Cooperative exporting
D)Direct exporting
E)Indirect exporting

Question 35

Markets can be classified in four types of countries based on their respective market attractiveness.Which of the following countries would most likely be listed as an
Established/maturing market?

A)China.
B)the Philippines.
C)India.
D)Vietnam.
E)Japan.

Question 36

Markets can be classified in four types of countries based on their respective market attractiveness.Which of the following of those types can be used to build up an
Initial presence (such as through a liaison office)?

A)platform countries.
B)emerging countries.
C)maturing and established countries.
D)growth countries.
E)none of the above

Question 37

___________________ offers several advantages.Chief among these are the firm gets instant foreign market expertise,very little risk is involved,and
No major resource commitments are required.

A)Licensing
B)Parallel exporting
C)Cooperative exporting
D)Direct exporting
E)Indirect exporting

Question 38

One of the most popular forms of cooperative exporting is _________________. With this method,the company uses the overseas distribution network of another
Company (local or foreign)for selling its goods in the foreign market.

A)parallel exporting.
B)venture exporting.
C)piggyback exporting.
D)make-or-buy exporting.
E)foreign export management exporting.

Question 39

The Oriental Land Company in Japan owns Tokyo Disneyland.This would be an example of an international _________________ agreement between the
Oriental Land Company (owner)and Disneyland (receives royalties).

A)licensing
B)parallel exporting
C)cooperative exporting
D)direct exporting
E)indirect exporting

Question 40

Markets can be classified in four types of countries based on their respective market attractiveness.Vietnam and the Philippines would fall into which of the types listed
Below (where the purpose would be to build up an initial presence such as through a
Liaison office)?

A)platform countries.
B)emerging countries.
C)maturing and established countries.
D)growth countries.
E)none of the above.

Question 41

When a multinational company chooses to invest in foreign markets with wholly owned subsidiaries,these subsidiaries may be acquisitions or _______________
Operations.

A)joint venture
B)strategic alliance
C)greenfield
D)franchise
E)piggyback

Question 42

According to the textbook,in franchising,companies can capitalize on a _______________________________.

A)cheap business formula.
B)expensive business formula.
C)winning business formula.
D)parallel business formula.
E)hybrid business formula.

Question 43

In ____________________,the company arranges with a local manufacturer to manufacture parts of the product or even the entire product.The marketing of the
Product,however,is still the responsibility of the international firm.

A)licensing
B)franchising
C)cooperative exporting
D)contract manufacturing
E)indirect exporting

Question 44

In contract manufacturing,because of "nurture-a-future competitor" threat,many companies prefer to make ___________________ or products that involve
Proprietary design features in-house.

A)just-in-time items
B)under-value items
C)low-value items
D)high-value items
E)none of the bove

Question 45

___________________ are(is)the prime motivation behind contract manufacturing.

A)Advertising cooperation
B)Leadership
C)Cost savings
D)Profit expansion
E)Desire to be part of a cartel

Question 46

With a __________________,the foreign company agrees to share equity and other resources with other partners to establish a new entity in the target country.

A)contract manufacturing agreement
B)parallel exporting agreement
C)cooperative exporting agreement
D)export management company
E)joint venture

Question 47

With respect to joint ventures,the ________________ argument is illustrated by not only shared capital and risk but possible contributions brought in by the local
Partner in land,raw materials,expertise on the local environment,and access to
Local distribution networks.

A)demand
B)parallel management
C)consensus management
D)domestication
E)synergy

Question 48

There are no magic ingredients to foster the stability of joint ventures,however,all of the following are good guidelines EXCEPT:

A)pick a partner with which control can be maintained.
B)pick the right partner.
C)establish clear objectives from the beginning.
D)bridge cultural gaps.
E)get top management commitment and respect.

Question 49

All of the following are considered benefits of forming joint ventures EXCEPT:

A)greater return potential.
B)shared profits instead of shared royalties.
C)more control over operations.
D)increased cost controls.
E)synergies.

Question 50

One of the most popular entry modes in the international marketplace for service firms is:

A)licensing.
B)franchising.
C)cooperative exporting.
D)direct exporting.
E)indirect exporting.

Question 51

Wholly owned subsidiaries give MNCs _______________ of their operations.

A)almost no control
B)partial control
C)moderate control
D)full control
E)strategic control only

Question 52

Nurturing a future competitor is the biggest danger in ___________________.

A)licensing
B)parallel exporting
C)cooperative exporting
D)direct exporting
E)indirect exporting

Question 53

A major advantage of joint ventures,as compared to lesser forms of resource commitment such as licensing,is:

A)the return potential.
B)infrastructure enhancement.
C)expansion of stockholders.
D)division of leadership.
E)an increase in ethical standards.

Question 54

One of the most popular franchise plans used in international marketing is ____________________ where the franchiser gives the franchise to a local
Entrepreneur who in turn sells local franchises within a territory.

A)sales franchise
B)master franchise
C)strategic franchise
D)cross-country franchise
E)border-territory franchise

Question 55

_____________________ come about when multinational companies prefer to enter new markets with 100 percent ownership.

A)Contract manufacturing agreements
B)Parallel exporting agreements
C)Cooperative exporting agreements
D)Wholly owned subsidiaries
E)Joint ventures

Question 56

Like licensing and franchising,nurturing a future competitor is one of the biggest dangers in ___________________.

A)contract manufacturing.
B)parallel exporting.
C)cooperative exporting.
D)using an export management company.
E)indirect exporting.

Question 57

Lack of trust and mutual conflicts can often turn ______________ into partnerships doomed to failure.

A)contract manufacturing agreements
B)parallel exporting agreements
C)cooperative exporting agreements
D)export management companies
E)joint ventures

Question 58

Benefits of licensing include:

A)not very demanding on company resources.
B)always protected against copying or technical theft.
C)always a strong partner relationship.
D)low profits,therefore,low taxes.
E)licensee is always enthusiastic.

Question 59

A _________________ operation (with respect to wholly owned subsidiaries)is one which is started from scratch.

A)joint venture
B)strategic alliance
C)greenfield
D)franchise
E)piggyback

Question 60

One of the problems with joint ventures is ________________ between partners.An example would be when one partner wants to stress reduction of political and
Economic controls on decision-making and the other partner wants to accept
Technology and capital but precludes foreign authority infringement on sovereignty
And ideology.

A)conflicting purchasing objectives
B)conflicting process objectives
C)control objectives
D)budget objectives
E)staffing objectives

Question 61

To identify market opportunities for a given product (or service),the international
marketer usually starts off with a large pool of candidate cities.

Question 62

One of the chief disadvantages of a wholly owned subsidiary is that:

A)it is often perceived as a threat to cultural or economic sovereignty.
B)it is often perceived as generating low profits.
C)it is often perceived as having problems in supply lines.
D)it is often perceived as being more expensive
E)it is often perceived as a threat to the local media for promotion.

Question 63

Advantages of wholly owned subsidiaries include all of the following EXCEPT:

A)full control.
B)control of profits.
C)own processes.
D)control government relationships.
E)can often be set quicker that other forms of investment.

Question 64

As an example of a preliminary screening process in assessing international market
opportunities,Colgate-Palmolive uses assessments of whether people bath regularly
or not as a critical factor in deciding whether to enter a market or not.

Question 65

The partnership established by Coca-Cola and Nestle to market ready-to-drink coffees and teas under the Nescafe and Nestea brand names is an example of which of the
Following:

A)strategic alliance.
B)contract manufacturing.
C)licensing.
D)wholly owned subsidiary.
E)exporting.

Question 66

The strategic alliance strategy of ______________ might be enacted when the firm has an established leadership position but that only plays a peripheral role in the
Company's business portfolio.

A)offense
B)defense
C)catch-up
D)remain
E)restructure

Question 67

All of the following are illustrations of the four generic reasons for forming strategic alliances EXCEPT:

A)offense.
B)defense.
C)catch-up.
D)remain.
E)restructure.

Question 68

When a firm uses a strategic alliance as a vehicle to rejuvenate a business that is not core and in which it has no leadership position,it is probably using a
________________ strategy.

A)defend
B)catch up
C)restructure
D)remain
E)none of the above

Question 69

Decisions to exit or divest a foreign market may have all the following reasons EXCEPT:

A)sustained losses.
B)volatility.
C)premature entry.
D)ethical reasons.
E)new market.

Question 70

When contrasted with greenfield operations,_________________ provide(s)a rapid means to get access to the local market.

A)licensing
B)exporting
C)contract manufacturing
D)acquisitions
E)joint ventures

Question 71

Risks of exiting a foreign market may lead to all the following EXCEPT:

A)fixed costs of exit.
B)disposition of assets.
C)short-term opportunities.
D)signal to other markets.
E)long-term opportunities.

Question 72

Preliminary screening is an accepted method of reducing the number of candidates
for market entry.

Question 73

The underlying goal of _________________ in creating a strategic alliance is to sustain the firm's leadership position by learning new skills,getting access to new
Markets and developing new technologies.

A)offense
B)defense
C)catch-up
D)remain
E)restructure

Question 74

Colgate-Palmolive views per capita purchasing power as a major driver
behind market opportunities.

Question 75

Companies that enter via wholly owned subsidiaries are sometimes perceived as a threat to the culture and/or economic sovereignty of the____________________.

A)host country.
B)home country.
C)buffer country.
D)greenfield country.
E)high-tech country.

Question 76

_________________ countries (with respect to market attractiveness)can be used to
gather intelligence and establish a network.

Question 77

__________________ are described as a coalition of two or more organizations to achieve strategically significant goals that are mutually beneficial.

A)Joint ventures
B)Strategic alliances
C)Greenfield operations
D)Franchises
E)Piggyback arrangements

Question 78

One way to address hostility to foreign acquisitions in the host country is by ______________ the firm's presence in the foreign market by hiring local managers,
Sourcing locally,and developing local brands.

A)regionalizing
B)localizing
C)socializing
D)acculturating
E)emphasizing the self-reference criterion (SRC)

Question 79

The chief reason that some firms choose acquisitions (or mergers)to enter a foreign market is that they can:

A)receive greater tax relief.
B)receive greater profits.
C)reduce debt.
D)increase stock price.
E)enter the market more quickly.

Question 80

The first step in the process of entering a foreign market is to decide on the
_____________________.