Question 1

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

Accepted Answer

Japan is considered an established/maturing market due to its high level of economic development, stable political environment, and mature financial and legal systems.

Question 2

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

Accepted Answer

Franchising is a popular entry mode for service firms in the international marketplace because it allows them to expand their brand and services globally with relatively low investment and risk, leveraging local franchisees' market knowledge and capital.

Question 3

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

Accepted Answer

The answer of Markets can be classified in five types...

Question 4

_____ 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.

Accepted Answer

Indirect exporting offers several advantages, including gaining instant foreign market expertise, minimal risk, and no significant resource commitments. This is because the firm leverages the networks, relationships, and expertise of intermediaries who handle the complexities of the foreign market.

Question 5

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

Accepted Answer

An export management company acts as a middleman by handling the export operations for a domestic company that wants to sell its product overseas but doesn't know how or doesn't want to deal with the export procedures.

Question 6

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

Accepted Answer

Direct exporting allows the exporter to have more control over its international operations, including marketing strategies, sales channels, and distribution networks, compared to indirect exporting where a third party is involved.

Question 7

Benefits of licensing include:

Accepted Answer

Licensing is not very demanding on company resources because it allows a company to expand its brand or technology without significant investment in new facilities, equipment, or marketing. The other options are not guaranteed benefits of licensing. Protection against copying or technical theft is not always ensured, strong partner relationships depend on the specific circumstances and are not guaranteed, profits can vary widely and are not inherently low, and licensee enthusiasm can also vary and is not a guaranteed outcome.

Question 8

Piggyback exporting is when two different transportation modes (such as truck and rail) are combined.

Accepted Answer

Piggyback exporting refers to a situation where a company uses the distribution system of another company to sell its products abroad, not to the combination of transportation modes.

Question 9

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

Accepted Answer

Indirect exporting means that the firm uses a middleman based in its home market to do the exporting. This method allows the firm to rely on the expertise and networks of the intermediary to handle various aspects of exporting, without having to develop these capabilities in-house.

Question 10

_____ 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.

Accepted Answer

Indirect exporting involves using intermediaries to handle the export of goods, which can lead to the disadvantages mentioned such as lack of control over marketing, inadequate sales support, and potential damage to the corporate image due to decisions made by the intermediary.

Question 11

One of the most popular forms of cooperative exporting is called:

Accepted Answer

Piggyback exporting is a popular form of cooperative exporting where a company uses the distribution system of another company that is already exporting to a particular country or region, effectively "piggybacking" on their established logistics and market presence.

Question 12

Nurturing a future competitor is the biggest danger in _____.

Accepted Answer

Licensing can involve sharing your business know-how and trademarks with another company, which might use this knowledge to become a competitor in the future.

Question 13

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).

Accepted Answer

The arrangement between the Oriental Land Company and Disneyland, where the Oriental Land Company owns Tokyo Disneyland and pays royalties to Disneyland, is an example of a licensing agreement. In a licensing agreement, one party (the licensor) allows another (the licensee) to use its brand, technology, or product under specific conditions, including the payment of royalties.

Question 14

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.

Accepted Answer

The correct answer is B) master franchise. In a master franchise arrangement, the franchiser grants the rights to a local entrepreneur, who is known as the master franchisee, to operate the franchise in a specific territory. This master franchisee can then sell franchises to other local entrepreneurs within that territory, effectively expanding the brand's presence in the market.

Question 15

Most companies start their international expansion with _____.

Accepted Answer

Exporting is often the first step companies take in their international expansion because it allows them to enter foreign markets with a lower level of investment and risk compared to establishing joint ventures, licensing agreements, franchising, or contract manufacturing. Exporting involves selling goods or services produced in one country to customers in other countries, making it a relatively straightforward way to access new markets.

Question 16

_____ 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.

Accepted Answer

Cooperative exporting involves an agreement where one firm uses its distribution network to sell another firm's goods, often to help the latter enter new markets or regions.

Question 17

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

Accepted Answer

Cooperative exporting is a method where companies may collaborate or use intermediaries to enter foreign markets, unlike licensing or direct exporting which involve different strategies and levels of involvement.

Question 18

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

Accepted Answer

Licensing is a contractual strategy where a firm allows a foreign company to produce its product in exchange for a fee (royalty), providing the licensee the right to use certain proprietary knowledge, trademarks, patents, or technology.

Question 19

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.

Accepted Answer

Piggyback exporting is a method where a company utilizes the distribution network of another company to sell its products in foreign markets. This allows the company to enter new markets with reduced costs and risks.

Question 20

_____ 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).

Accepted Answer

Direct exporting involves a company selling directly to a customer in a foreign market, often with the assistance of a local distributor or agent, but the company maintains control over the export process.

Quiz 9: Global Market Entry Strategies