Question 1

A reciprocal arrangement whereby each partner provides the other access to its markets for a product is referred to as ________.

Accepted Answer

A reciprocal arrangement whereby each partner provides the other access to its markets for a product is referred to as cross-marketing activities. This involves two or more companies working together to promote each other's products or services in order to reach a larger audience and increase sales. It is often used in co-branding campaigns or promotional events.

Question 2

What does EMC stand for?

Accepted Answer

EMC typically stands for Export Management Company, which helps businesses expand their reach into international markets. A, B, C, and E are not commonly used meanings for EMC.

Question 3

The Export-Import Bank in the United States,the Australian Trade Commission in Australia,and the Export Development Corporation in Canada are all examples of:

Accepted Answer

The Export-Import Bank, Australian Trade Commission, and Export Development Corporation are all public-sector facilitators. These entities are government agencies that provide financing and other resources to help domestic companies engage in international trade.

Question 4

In ________ agreements,partners work together without a binding agreement.This arrangement often takes the form of visits to exchange information about new products,processes,and technologies or may take the more formal form of the exchange of personnel for limited amounts of time.

Accepted Answer

The description specifically mentions that partners work together without a binding agreement, which fits the definition of an informal cooperative. The other options involve some form of contract or legal agreement, such as joint ventures, licensing, and consortia.

Question 5

Because they share a common business objective,Texas Instruments has reported agreements with companies such as IBM,Alcatel,and L.M.Ericsson.This is an examples of a ________.

Accepted Answer

Texas Instruments has formed strategic alliances with IBM, Alcatel, and L.M. Ericsson because they share a common business objective. Strategic alliances are agreements between two or more firms to cooperate in the pursuit of a common goal or to undertake a specific project. Joint ventures involve the creation of a new legal entity, while franchises involve the licensing of intellectual property or business models. Turnkey operations and management contracts involve one party undertaking the construction or operation of a facility on behalf of another party.

Question 6

Mitsubishi,Mitsui,and C.Itoh are the ________ of Japan.

Accepted Answer

Mitsubishi, Mitsui, and C.Itoh are all examples of sogoshosha, which are large trading companies in Japan that provide a variety of services including exporting, importing, financing, and logistics. These companies are significant players in the Japanese economy and are often involved in strategic alliances with foreign firms.

Question 7

Benefits of ________ are to improve company focus on higher value-added activities,to gain access to world-class capabilities,and to reduce operating costs.However,it has been criticized because of the pressure it puts on the contractors to cut prices and,thereby,labor costs.

Accepted Answer

The benefits listed in the statement align with the advantages of contract manufacturing, which involves outsourcing the production of goods to a third-party manufacturer. The criticism mentioned in the statement is also commonly associated with contract manufacturing, as companies often seek out lower cost options for manufacturing through these contracts.

Question 8

A specialized form of management contract between a customer and an organization to provide a complete operational system together with the skills needed for unassisted maintenance and operation is the ________.

Accepted Answer

A turnkey operation is a specialized form of management contract where a customer hires an organization to provide a complete operational system along with the necessary skills for unassisted maintenance and operation. The organization takes responsibility for designing, building, and testing the system and then delivers it to the customer ready to use. The customer then takes over the operation and maintenance of the system.

Question 9

Of the following,which is NOT an example of an international intermediary?

Accepted Answer

Strategic alliances refer to partnerships formed between two or more companies that agree to work together and share resources to accomplish a mutually beneficial goal. While strategic alliances involve collaboration between companies from different countries, they are not considered international intermediaries as they are not involved in facilitating international trade transactions between buyers and sellers.

Question 10

Which of the following is NOT true of licensing?

Accepted Answer

Licensing does not necessarily require capital investment and detailed involvement with foreign customers. Licensing agreements can vary in terms of the level of involvement and investment required.

Question 11

A significant reason for ________ is market entry and support of global operations.

Accepted Answer

Equity participation, in which a company invests in the ownership of a foreign company or joint venture, is often used to facilitate market entry and support global operations. This allows for a more direct involvement in the foreign market and sharing of resources, knowledge, and risk with the local partner. Direct involvement (A) and turnkey operations (D) may also be used for market entry, but they do not necessarily involve ongoing support of global operations. Indirect involvement (B) and contract manufacturing (E) do not involve ownership or control of foreign operations, and may not provide the same level of support for global operations.

Question 12

The parent company,Denny's,allows independent entities to sell its products.In addition,the independent entities can use the Denny's name,production,and marketing techniques.Denny's is an example of a(n)________.

Accepted Answer

Denny's is an example of a franchise, where the parent company allows independent entities to use its brand name, products, and marketing techniques in exchange for fees and royalties. A strategic alliance involves a partnership between two or more companies to achieve a common goal. A joint venture is a partnership where two or more companies create a new entity for a specific project. A distributor is a company that distributes products to wholesalers or retailers. An agent is a person or company that represents another company in negotiations or sales.

Question 13

An agreement in which one firm permits another to use its intellectual property in exchange for compensation is known as a ________.

Accepted Answer

A licensing agreement is the only one listed that specifically involves the use of intellectual property in exchange for compensation. B, C, D, and E may involve intellectual property in some capacity, but they do not necessarily revolve around the use of such property as the primary basis for the agreement.

Question 14

An example of a________ is New United Motor Manufacturing Inc.(NUMMI),the collaboration between Toyota and GM.Toyota needed direct access to the U.S.market,while GM benefited from the technology and management approaches provided by its Japanese partner.

Accepted Answer

NUMMI is an example of a joint venture where two or more companies commit to a legally-binding agreement to share resources, technology, and profits to achieve a common goal. In this case, Toyota and GM formed a new company to produce vehicles together in the United States, leveraging each other's strengths and expertise.

Question 15

When operating as a(n)________,the export management corporation purchases products from the domestic firm,takes title,and assumes the trading risk.

Accepted Answer

As a distributor, the export management corporation purchases products from the domestic firm, takes title, and assumes the trading risk. This is different from an agent who acts as an intermediary between the domestic firm and foreign buyers but does not take title or assume the trading risk. Sogoshosha is a term used in Japan for trading companies that are similar to export management corporations. Licensor and franchisor both refer to companies that grant the rights to their intellectual property or business model to foreign firms but do not directly purchase or sell products.

Question 16

The reasons for establishing a ________ can be divided into three groups: (1)government policy or legislation; (2)one partner's needs for other partners' skills; and (3)one partner's needs for other partners' attributes or assets.

Accepted Answer

The answer of The reasons for establishing a ________ can...

Question 17

When working as a(n)________,the export management company is primarily responsible for developing foreign business and sales strategies and establishing contacts abroad.

Accepted Answer

An export management company (EMC) functions as an agent on behalf of the manufacturer by developing foreign business and sales strategies, identifying potential buyers or representatives, and helping with the negotiation of contracts and closing deals. The other options listed here (distributor, sogoshosha, licensor, franchisor) do not accurately describe the primary responsibilities of an EMC.

Question 18

Nestle and General Mills had an agreement whereby Honey Nut Cheerios and Golden Grahams were made in General Mill's U.S.plants and shipped in bulk to Europe for packaging by Nestle.Such an arrangement is called ________.

Accepted Answer

The answer of Nestle and General Mills had an agreement...

Question 19

Multinational companies offer ________,selling their expertise in running a company while avoiding the risk or benefit of ownership.

Accepted Answer

Management contracts involve multinational companies selling their expertise in managing a company to another party, without taking on the risk or benefit of ownership. This allows the multinational company to earn revenue and expand its reach without investing its own capital. Trademark licensing involves allowing another party to use a company's trademark in exchange for royalties. Complementary marketing involves two companies promoting each other's products or services for mutual benefit. Contract manufacturing involves outsourcing the production of a product to another company. Cross-marketing activities involve joint marketing efforts between two or more companies to increase exposure and sales.

Question 20

A ________ can be defined as the participation of two or more companies in an enterprise in which each party contributes assets,has some equity,and shares risk.

Accepted Answer

A joint venture is a form of partnership between two or more companies where each party contributes assets, has some equity, and shares risk. Strategic alliances involve a more limited collaboration between companies, licensing agreements involve the use of intellectual property or technology, management contracts involve one company managing another company's operations, and turnkey operations involve one company building and handing over a fully operational facility to another company.

Quiz 13: Entry and Expansion