Deck 14: Global Opportunities for Small Firms

Question 1

One of the reasons why companies expand internationally is to lower their operational costs

Answer 1

True

Question 2

Firms in Finland expand internationally because of the limited growth opportunities in the domestic market

Answer 2

True

Question 3

Firms in developed countries expand internationally because there are less political risks in under-developed countries

Answer 3

False

Question 4

Small businesses must pursue all three forms of internationalization at the same time

Question 5

Any firm that operates internationally is a born-global firm

Question 6

HTC, the phone manufacturer, is an example of a born-global firm

Question 7

Born-global firms are found only in the technology sector

Question 8

One-third of American exports in economic terms comes from small firms

Question 9

Indirect exporting involves doing business in another country without an intermediary

Question 10

Indirect exporting allows the firm more control over the exporting process and direct contact with the customer

Question 11

Exporting is reserved only for the manufactured goods

Question 12

Exports refers to goods bought from another country

Question 13

There is no difference between licensing and franchising

Question 14

Foreign Partnerships are formal inter-firm relationships between companies from multiple countries

Question 15

A Joint venture is a form of strategic alliance

Question 16

Through Greenfield venture, firms expand internationally with the help of another business

Question 17

When companies expand internationally, there are minimum political risks

Question 18

Unexpected changes in exchange rates is a demographic risk for small firms operating internationally

Question 19

International strategy is a corporate strategy for competing in two or more countries

Question 20

U.S. and U.K. are high on cultural distance

Question 21

Hofstede's model of national culture has four dimensions- masculinity, uncertainty avoidance, power distance, and individualism

Question 22

When a firm uses the multi-domestic strategy, it is using different strategies in each of the operating markets

Question 23

A transnational strategy seeks to strike a compromise between the extreme localization of multi-domestic strategy and global strategy

Question 24

When the economy is in a downturn and people see themselves struggling to make ends meet, the preference for globalization is stronger than nationalism

Question 25

Cultural concerns center around the anxiety and worry that ideas and practices from other countries are diluting the culture of one's country

Question 26

Which of the following is a drawback of expanding internationally for firms ________

A) Access to new customers
B) Access to cheaper labor
C) Access to rare production inputs
D) High inventory carrying costs

Question 27

Why do firms in United States look for labor in foreign countries?

A) Labor is cheaper in some foreign countries
B) Domestic workers, sometimes, lack the right education and training needed to perform the job
C) Domestic workers are not willing to work in some sectors
D) All of the above

Question 28

__________involves overseas expansion of the downstream supply chain in search of new customers to buy the company's products

A) Factor market internationalization (FMI)
B) Product market internationalization (PMI)
C) Capital market internationalization (CMI)
D) Natural market internationalization (NMI)

Question 29

Which of the following is NOT a form of internationalization?

A) Factor market internationalization (FMI)
B) Product market internationalization (PMI)
C) Capital market internationalization (CMI)
D) Natural market internationalization (NMI)

Question 30

_________refers to raising money for the firm overseas, either through selling equity in the company or by tapping debt markets

A) Factor market internationalization (FMI)
B) Product market internationalization (PMI)
C) Capital market internationalization (CMI)
D) Natural market internationalization (NMI)

Question 31

Which of the following is NOT a characteristic of a born-global firm?

A) Operates across national boundaries from the very beginning
B) Top management has an international mindset
C) Expands internationally after five years of its inconception
D) Limited tangible resources in the domestic market

Question 32

Which of the following is a drawback of exporting?

A) Access to new customers
B) High transportation risk
C) Creates better jobs
D) Assistance from Small Business Administration

Question 33

Which of the following is NOT a mode of internationalization?

A) Exporting
B) Franchising
C) Licensing
D) Localization

Question 34

Veetsa, a mattress company, sells its eco-friendly mattresses and other sleeping products to United Kingdom through Amazon. Veetsa is involved in :

A) Importing
B) Direct exporting
C) Indirect exporting
D) Franchising

Question 35

Veetsa, a mattress company, sells its eco-friendly mattresses and other sleeping products directly to United Kingdom. Veetsa is involved in :

A) Importing
B) Direct exporting
C) Indirect exporting
D) Franchising

Question 36

Before starting to export, small businesses should do all of the following EXCEPT:

A) Always rely on guesstimation
B) Learn about the process of exporting
C) Aware of laws and regulations surrounding exporting
D) Aware of business conditions of the destination country

Question 37

What is a disadvantage of internationalizing through licensing?

A) A low-cost avenue for overseas expansion
B) The licensee may continue to use the know-how even after the contract expires without paying for it
C) The licensor receives a royalty
D) Promotion of products to new customers

Question 38

International franchising involves:

A) A company offering a standard package of systems and services to a company, in a different country, that brings capital and operational management to the business
B) A company in a technology sector that merges with another company from a different industry
C) Partnerships that involve equity sharing
D) A company taking over another company forcefully

Question 39

Which of the following is NOT a strategic alliance?

A) Joint venture
B) Merger
C) Equity strategic alliance
D) Non-equity strategic alliance

Question 40

_________is starting from scratch a wholly owned subsidiary by setting up facilities in a foreign country

A) Joint venture
B) Merger
C) Equity strategic alliance
D) Greenfield venture

Question 41

When establishing overseas partnerships, small firms prefer to work with larger foreign firms to gain advantage of :

A) Brand reputation
B) Existing infrastructure
C) Existing sales team and service personnel
D) All of the above

Question 42

_________and_______ are go-it alone approaches to expanding in foreign markets

A) Joint venture, mergers
B) Cross-border acquisition, joint venture
C) Greenfield venturing, cross-border acquisition
D) Cross-border acquisition, strategic alliance

Question 43

Which of the following is a challenge for small firms to expand internationally?

A) Foreign government policies
B) Lack of political influence
C) Language barrier
D) All of the above

Question 44

________refers to restrictions on export of U.S. products and technology for use in industries the government considers sensitive to military or national-security concerns

A) Foreign direct product rule
B) Foreign direct investment
C) Foreign portfolio investment
D) Foreign institutional rule

Question 45

Which of the following is an economic risk that a company may face internationally?

A) A country's citizenry revolts against dictatorial leaders
B) A war between two countries
C) Elections resulted in the change of a political party
D) Inflation rates skyrockets in an operating country

Question 46

Which of the following refers to governmental actions in an operating country that may adversely impact the long-term profit or value of a firm?

A) Economic risks
B) Political risks
C) Uncertainty avoidance
D) Adverse impact

Question 47

Which of the following risk companies face in the international environment?

A) Exchange rate fluctuations
B) Political risk
C) Lack of Cultural knowledge
D) All of the above

Question 48

__________means that a company's decision to enter a particular market is driven by peer or rival firms who are already in that market

A) Isomorphism
B) Equilibrium
C) Fragmentation
D) Reduction

Question 49

A________ is one in which a firm varies its competitive approach and product offerings from country to country in an effort to meet varied buyer needs and address differing local conditions

A) Transnational strategy
B) Multi-domestic strategy
C) Global Strategy
D) Standardization

Question 50

When the economy is in a downturn and people see themselves struggling to make ends meet, the preference for nationalism _______and interest in globalization _______

A) Decreases, becomes stronger
B) Decreases, increases
C) Becomes stronger, decreases
D) Decreases, decreases