Question 1

_______ describes how countries exercise authority and how efficiently they deliver basic infrastructure services like water, sanitation, roads, electricity, security, and the like for public as well as private firms.

Accepted Answer

The answer of _______ describes how countries exercise authority and...

Question 2

Boseman Clothier, Inc. has been in operation for over 75 years. It is based in South Carolina, USA and is a well-recognized name in the industry. It produces custom fitted men's suits that are in high demand throughout the world. The average cost of one of its suits is in excess of five thousand U.S. dollars. Boseman proudly states it has more customer orders than its one store can fill within the next six months. With growing demand from overseas, the company has recently decided to open operations in four foreign markets next year.
Boseman realizes the potential of this move will generate increased revenues for the company. One of the options it is contemplating is exploring forming an international joint venture. Boseman is also entertaining the thought of opening operations differently in each of the four new foreign markets. The company feels the use of different strategies may increase its odds of generating profits in each different market.
-Boseman Clothier, Inc. has indicated it would like to use different entry strategies for each of the four markets it plans to enter. Which of the following would not be considered a benefit from using licensing in the other foreign markets it plans to enter?

Accepted Answer

While licensing can offer many benefits such as lower risk and no need for financial resources to open new production facilities, it is not necessary for Bozeman to use licensing in all four of the foreign markets it plans to enter. Licensing may not be the best fit for certain countries or markets, and in those cases, Bozeman may benefit more from using another entry strategy. Therefore, not using licensing in all four markets would not be considered a disadvantage.

Question 3

Companies go global for three possible motives. Describe each of these three motives and the possible strategies available to companies under each motive.

Accepted Answer

The answer of Companies go global for three possible motives....

Question 4

Briefly describe Dunning's Eclectic Theory of Foreign Direct Investment.

Accepted Answer

The answer of Briefly describe Dunning's Eclectic Theory of Foreign...

Question 5

Boseman Clothier, Inc. has been in operation for over 75 years. It is based in South Carolina, USA and is a well-recognized name in the industry. It produces custom fitted men's suits that are in high demand throughout the world. The average cost of one of its suits is in excess of five thousand U.S. dollars. Boseman proudly states it has more customer orders than its one store can fill within the next six months. With growing demand from overseas, the company has recently decided to open operations in four foreign markets next year.
Boseman realizes the potential of this move will generate increased revenues for the company. One of the options it is contemplating is exploring forming an international joint venture. Boseman is also entertaining the thought of opening operations differently in each of the four new foreign markets. The company feels the use of different strategies may increase its odds of generating profits in each different market.
-Bozeman is also considering making the entry into the international market by engaging in foreign direct investments in the nations. Which one of the following is not a true statement regarding foreign direct investment from the host country's perspective?

Accepted Answer

Not all forms of foreign direct investment will result in significant financial inflows to the host country. Some investments may involve the transfer of technology or expertise, which may not result in immediate financial benefits for the host country.

Question 6

ABC Manufacturing is exploring entering the global arena. Describe the three lowest risk entry strategies in global business for ABC.

Accepted Answer

The answer of ABC Manufacturing is exploring entering the global...

Question 7

_______ explains what happens to a product's revenue and profits at different stages of its development before the product is discontinued.

Accepted Answer

The answer of _______ explains what happens to a product's...

Question 8

Scenario - Lewis Fabrication
Lewis Fabrication was founded in 2001 and is based in Maryland, USA. This company manufactures custom designed motorcycle parts and currently has over two thousand U.S. customers. Due to the growing number of inquiries received from foreign countries such as Japan, Canada, China, and Indonesia, Lewis Fabrication has decided to begin operations on a global scale. The owners realize there is much to learn before undertaking this monumental step. However, financial projections indicate about $1 million in profit is very likely in the first year of going global. The owners are very excited and looking forward to the business expansion.
-In its quest for global expansion Lewis Fabrication must examine its rationales for wanting to expand into the foreign marketplace. Which one of the following is not a reason why this company would want to expand globally?

Accepted Answer

While expanding globally may potentially bring about more risks, it is not a rationale for why a company would want to expand globally. The other choices, maximizing shareholder wealth, increasing revenues, cutting costs, and reducing business cycle fluctuations are all common reasons why a company would pursue global expansion.

Question 9

Differentiate between strategic alliances and international joint ventures.

Accepted Answer

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Question 10

What are the benefits and costs of foreign direct investment from the host country's perspective? Explain.

Accepted Answer

The answer of What are the benefits and costs of...

Question 11

Scenario - Lewis Fabrication
Lewis Fabrication was founded in 2001 and is based in Maryland, USA. This company manufactures custom designed motorcycle parts and currently has over two thousand U.S. customers. Due to the growing number of inquiries received from foreign countries such as Japan, Canada, China, and Indonesia, Lewis Fabrication has decided to begin operations on a global scale. The owners realize there is much to learn before undertaking this monumental step. However, financial projections indicate about $1 million in profit is very likely in the first year of going global. The owners are very excited and looking forward to the business expansion.
-While Lewis Fabrication has decided to begin operations on a global scale, it realizes there is still much to learn. One of the fundamental things it must have knowledge on is the manner in which it can begin operations globally. Which one of the following would not be considered a choice for starting international business operations for this company?

Accepted Answer

Opening wholly owned subsidiaries in the Midwest would not be a choice for starting international business operations as the Midwest is still within the United States and does not involve operating on a global scale. The other options, such as beginning as an export-import business, licensing a foreign business partner, selling franchises to foreign buyers, or forming a strategic alliance with a foreign firm, all involve international business operations.

Question 12

Scenario - Lewis Fabrication
Lewis Fabrication was founded in 2001 and is based in Maryland, USA. This company manufactures custom designed motorcycle parts and currently has over two thousand U.S. customers. Due to the growing number of inquiries received from foreign countries such as Japan, Canada, China, and Indonesia, Lewis Fabrication has decided to begin operations on a global scale. The owners realize there is much to learn before undertaking this monumental step. However, financial projections indicate about $1 million in profit is very likely in the first year of going global. The owners are very excited and looking forward to the business expansion.
-The global markets in which Lewis Fabrication plans to expand provides this company with the opportunity for entering relatively high-growth markets with a product that is in demand. Which one of the following would Lewis Fabrication be least likely to expect to find in this type of market?

Accepted Answer

In high-growth markets, especially those experiencing rising per capita incomes and a growing middle class, government and military influence or intervention is common, making it unlikely for a company to expect no government or military influence.

Question 13

Boseman Clothier, Inc. has been in operation for over 75 years. It is based in South Carolina, USA and is a well-recognized name in the industry. It produces custom fitted men's suits that are in high demand throughout the world. The average cost of one of its suits is in excess of five thousand U.S. dollars. Boseman proudly states it has more customer orders than its one store can fill within the next six months. With growing demand from overseas, the company has recently decided to open operations in four foreign markets next year.
Boseman realizes the potential of this move will generate increased revenues for the company. One of the options it is contemplating is exploring forming an international joint venture. Boseman is also entertaining the thought of opening operations differently in each of the four new foreign markets. The company feels the use of different strategies may increase its odds of generating profits in each different market.
-Boseman Clothier, Inc. has decided to begin international operations using an international joint venture. Which one of the following is not one of the expectations from this type of entry into the foreign market arena?

Accepted Answer

One of the expectations of an international joint venture is that decision making rights will be shared with the joint venture partner. Therefore, option E is not one of the expectations from this type of entry into the foreign market arena.

Quiz 8: Entry Strategies in Global Business