Question 1

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 operates in multiple countries. However, it does not have specific domestic and international divisions, suggesting that it operates as a single global entity rather than having unique business units for each geography. Such a setup is typical of multinational firms.

Question 2

Biltmore Corp. is involved in a planning process for doing business internationally. They have already determined that their product can be modified to fit foreign markets. What should they do next?

Accepted Answer

The answer of Biltmore Corp. is involved in a planning...

Question 3

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

Accepted Answer

An exporter is a firm that produces goods in one country and sells them in other countries.

Question 4

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

The target country's balance of trade is not something that Clement needs to directly consider in his planning to export fruit wine. While it is important for a country's overall trade statistics, it is not a factor that would impact the decision to export wine. The other options (B, C, D, E) are all important considerations when entering a new market.

Question 5

The global business environment encompasses many international forces that influence the outcomes of companies doing business in foreign countries. Which of the following scenarios would best count as evidence of globalization?

Accepted Answer

Scenario B illustrates how a natural disaster in one country can impact the operations of a company in another country, highlighting the interconnectedness of global supply chains, a key aspect of globalization.

Question 6

In France, McDonald's restaurants sell wine. This is a classic example of

Accepted Answer

McDonald's in France adapted to local customer needs by selling wine in their restaurants.

Question 7

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 8

Which of the following types of firms have planning and decision-making functions that are geared to international markets?

Accepted Answer

Multinational firms have planning and decision-making functions that are geared towards international markets, as they operate in multiple countries and must adapt to different cultural, political and economic environments. Exporting firms focus mainly on exporting products to international markets but may not necessarily have extensive planning and decision-making functions directed towards these markets. International firms may operate in multiple countries, but they do not necessarily have the same level of adaptation to local markets as multinational firms. Domestic firms operate primarily in one country and are not geared towards international markets.

Question 9

________ is an example of an export of a service.

Accepted Answer

An advertising agency in Montreal providing their service of creating a TV commercial to a company in France is an example of exporting a service. The service does not involve physically moving goods across borders, but it involves providing a service to a client in a foreign country.

Question 10

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 effectively in different countries, the manufacturer must modify its products to meet the electrical outlet standards of those countries. This will ensure that the product can be used safely and efficiently in different markets. Option B may be necessary for distribution, but modification is required for the product. Option C is unrelated to the issue of electrical outlets, and option D is an extreme measure that may not be necessary if appropriate modifications are made. Therefore, option A is the best choice.

Question 11

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 buys products made in another country for distribution and sale in its own country.

Question 12

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

Accepted Answer

KFC's decision to serve rice and soy milk with its dishes in China indicates that the company is adapting to customer needs by offering menu items that are culturally familiar and appealing to local tastes. This is a common practice for multinational companies operating in foreign markets, and helps increase customer satisfaction and loyalty.

Question 13

Merritt Corp. is interested in doing business internationally. They have already determined that there is international demand for their product. What should they do next?

Accepted Answer

The answer of Merritt Corp. is interested in doing business...

Question 14

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

Launching a website and hiring employees specifically for handling international shipping directly aligns with positioning a business for the global market, as it facilitates worldwide accessibility and distribution.

Question 15

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 issues such as transportation costs, tariffs, and regulations for importing fresh food. The product also has a short shelf life, making it difficult to transport over long distances.

Question 16

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

Accepted Answer

Royalties are typically paid under a licensing arrangement, where the exporter grants the right to use their intellectual property (such as patents, trademarks, or copyrights) to a licensee in another country in exchange for a fee, typically calculated as a percentage of revenues. This is a common way for companies to generate income from their intangible assets without having to invest in physical operations in the foreign market.

Question 17

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 a type of firm that operates in multiple countries, and its management believes in the fact that the company designs, manufactures, and markets products worldwide. Such firms are not restricted to a particular country and have a global presence. They are different from international firms, which operate in many countries but may still consider themselves as having separate domestic and international operations. Therefore, option D is the best choice for this question.

Question 18

The CEOs of Company A and B are investigating expansion into new markets, which will provide greater trade volume. Which scenario describes an economic environment that is most suitable for an importing-exporting opportunity?

Accepted Answer

A) describes a scenario where two countries specialize in different sectors (textiles and agriculture), creating a natural opportunity for trade based on comparative advantage.

Question 19

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 20

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.

Quiz 5: The Global Context of Business