Question 1

Clement is the owner of Dills Distillery,which makes and bottles fruit wine.In his planning to export the wine,Clement should consider all of the following except

Accepted Answer

While it is important for Clement to consider the economic conditions of the target country, the balance of trade specifically may not be directly relevant to his export planning. The other options listed are all important factors to consider when exporting a product, as they can affect demand, legality, and cultural reception of the product in the target country.

Question 2

A firm that buys products made in another country for distribution and sale in its own country is

Accepted Answer

An importer is a firm that purchases products made in another country to be distributed and sold in its own country.

Question 3

The Acrylic Paint Company in Canada has joined forces with the 1-2-3 Plastics Company in Italy to create a non-peeling,plastics-based paint.Both companies intend to share the research costs and any profits.This an example of

Accepted Answer

A strategic alliance is a partnership where two or more companies collaborate to achieve a specific goal, sharing resources, costs, and profits, without forming a new entity.

Question 4

What is the implication for a manufacturer of electrically powered equipment contemplating international operation upon learning of the wide variety of electric outlets around the world?

Accepted Answer

In order to operate internationally, a manufacturer of electrically powered equipment must modify its product to meet the varying standards of different countries. This involves adapting the product to the different types of electric outlets used in different countries, as well as other electrical and safety standards. Failure to do so could result in the product being unusable or unsafe in certain markets. Therefore, option A is the best choice.

Question 5

KFC's dishes in China come with a side order of rice and soy milk.This is an example of

Accepted Answer

KFC has adapted to Chinese customers' preferences by offering rice and soy milk as sides, which are popular in Chinese cuisine. This shows that KFC has taken the effort to understand and cater to local tastes, promoting customer satisfaction and increasing sales.

Question 6

In Germany,McDonald's restaurants sell beer.This is a classic example of

Accepted Answer

McDonald's in Germany selling beer is an example of adapting to local customer preferences and cultural norms, as beer is a common beverage in German dining.

Question 7

With respect to international organizational structures,it is correct to say that

Accepted Answer

Branch managers are employees of the parent company and therefore they have to abide by the rules and policies set by the company. On the other hand, agents and license holders are not employees of the company, which can make it challenging for the company to exercise control over them. While independent agents typically represent just one firm in foreign markets, licensing arrangements can offer a cost-effective way for Canadian firms to enter international markets. The number of strategic alliances has actually increased in recent years as many firms seek to gain access to new markets and technologies. Investment Canada's mandate is to review foreign investment in Canada to ensure that it has a net benefit for Canadians and does not pose a threat to national security.

Question 8

Robert has established a start-up business manufacturing a range of outdoor wear for the leisure market.Which possible scenario would best show that Robert is positioning his business for the global business market?

Accepted Answer

By hiring employees to handle both national and international shipping, Robert is preparing his business to operate on a global scale, indicating a focus on the international market.

Question 9

A firm that conducts a significant portion of its business abroad,that has some facilities overseas,and that imports a significant portion of goods from other countries is best described as

Accepted Answer

The answer of A firm that conducts a significant portion...

Question 10

Which of the following is correct regarding the levels of foreign involvement a business can exhibit?

Accepted Answer

The answer of Which of the following is correct regarding...

Question 11

A Canadian company has given exclusive rights to a Swiss company to manufacture its products.This is an example of

Accepted Answer

The scenario described is a licensing arrangement, where the Canadian company is granting the Swiss company the rights to manufacture its products exclusively. This allows the Canadian company to expand its reach into the Swiss market without having to set up its own operations there, and the Swiss company benefits from being able to manufacture and sell a product without having to invest in research and development.

Question 12

What is a difference between an international firm and a multinational firm?

Accepted Answer

Multinational firms operate in multiple countries with a more decentralized approach, adapting products and practices to local markets, while international firms focus on exporting and operating from a primary base, often with centralized control.

Question 13

Which type of firm is one in which management doesn't think of itself as having domestic and international operations but rather as a firm that designs,makes,and markets products in many nations?

Accepted Answer

A multinational firm is one that operates in multiple countries and sees itself as a global entity, rather than separating its operations into domestic and international categories. This type of firm has a strong presence and influence in multiple markets and typically has diversified operations in various countries.

Question 14

A firm that produces goods in one country and distributes and sells them in other countries is

Accepted Answer

The answer of A firm that produces goods in one...

Question 15

Michael is going to sell his baby products abroad,and he is interested in having someone in the foreign country sell the product for him.Michael is most interested in working with a(n)

Accepted Answer

Michael needs someone to sell his products in a foreign country, but he does not want to invest in setting up a branch office or a franchisee. In this case, an independent agent would be the best choice as they work on a commission basis and would be motivated to sell Michael's products in the foreign market. Additionally, working with an independent agent would allow Michael to test the market in the foreign country without making a large investment.

Question 16

Which of the following companies may not find it profitable to go international?

Accepted Answer

A company that buys and sells fresh produce and fish may not find it profitable to go international due to the perishable nature of its products, which can lead to high transportation costs and spoilage risks.

Question 17

When a company sends some of its own managers overseas to conduct business in a local office,this is an example of

Accepted Answer

Sending managers overseas to conduct business in a local office is an example of opening a branch office.

Question 18

________ is an example of an export of a service.

Accepted Answer

An export of a service occurs when a service is provided by a company in one country to a client in another country. In this case, the advertising agency in Montreal is providing a service to a company in France, making it an export of a service.

Question 19

In which international structure would royalties likely be paid to the exporter?

Accepted Answer

Royalties are a form of payments made by a company to the owner of a patent, copyright, or trademark in exchange for the right to use that property. Licensing arrangements are typically used for exporting goods and services, and involve the payment of royalties to the owner of the intellectual property being licensed. Therefore, in a licensing arrangement, royalties would likely be paid to the exporter. Branch offices, subsidiaries, joint ventures, and strategic alliances do not typically involve the payment of royalties in the same way that licensing arrangements do.

Question 20

Herald Inc. ,a French newsprint manufacturer,is geared towards international markets but does not have specific domestic and international divisions.This firm is a(n)

Accepted Answer

Herald Inc. is geared towards international markets, indicating that it has operations in multiple countries. This makes it a multinational firm. The fact that it does not have specific domestic and international divisions further supports this classification.

Quiz 5: The Global Context of Business