Deck 7: Reaching Global Markets

Question 1

The importance of e-commerce in global markets is increasing significantly.One of the major reasons is because,online e-commerce offers:

A)the access to significant numbers of buyers
B)the ability to hedge currency exchange rates
C)the inability to offer warranties
D)the inability to sue companies in foreign countries

Answer 1

A

Question 2

For Canada,the monetary value of all goods and services produced during one year was recently valued at $1.75 trillion.This is referred to as Canada's

A)balance of payments (BOP)
B)international indebtedness (IID)
C)transfer payment options (TPO)
D)gross domestic product (GDP)

Answer 2

D

Question 3

One of the primary reasons that Canada will experience a shift in global trading partners and the type of Canadian exports by 2040 will be:

A)growing role of emerging markets in the global economy
B)decreasing reliance on natural resources
C)currency stabilization
D)decreased political instability

Answer 3

A

Question 4

Some global firms have recognized that if individuals in developing countries are provided small amounts of collateral-free capital,they can,in turn,grow successful local businesses,which may include selling products of the donating firm.These global firms have recognized which important concept?

A)women-driven entrepreneurship
B)micro-entrepreneurship
C)microfinancing
D)micro-loan

Question 5

Which of the following statements accurately describes the global perspective on world trade?

A)Exports are of significantly greater importance than imports.
B)Imports are of significantly greater importance than exports.
C)Imports and exports should be complementary economic flows; imports affecting exports, and exports affecting imports.
D)The balance of exports and imports should always be kept in a state of equilibrium.

Question 6

By providing start-up microfinancing loans to individuals in India,Lever addressed which problem in their 4Ps strategy for the Indian market?

A)product
B)promotion
C)place
D)pricing

Question 7

Not only are global markets substantial in size,but many global markets are:

A)growing faster than the Canadian market
B)willing to pay more for foreign goods
C)experiencing stagnant growth
D)facing political turmoil

Question 8

The phenomenon in which a country's imports affect its exports and its exports affect its imports is referred to as

A)Trade feedback effect
B)Trade equity
C)Product exchange loop
D)Balance of trade

Question 9

World trade flows to and from Canada for goods and services among nations and industries reflect __________________.

A)demand and supply interdependencies
B)holistic trade
C)positive and negative synergistic trade
D)a negative currency exchange

Question 10

The Malaysian government exchanged 20,000 tonnes of rice for an equivalent amount of Philippine corn.This international exchange is an example of:

A)predatory pricing.
B)countertrade.
C)cross-cultural exchange.
D)economic adaptation.

Question 11

Trade is so important to Canada that it is one of the federal government's key priorities.It is so critical to the growth of the Canadian economy that the government established a network of more than 20 federal departments and agencies that work to help Canadian firms find new global markets and assist them in competing in those markets.This network is referred to as:

A)Team Canada Inc.(TCI).
B)Great White North Ltd.(GWNLTD).
C)Taking Care of Business (TCB).
D)Canuck Trade.

Question 12

All of the following are true aspects about the 'bottom of the pyramid' except

A)this socio-economic group is not a concern to global businesses
B)individuals live on less than $2 a day
C)the population of this socio-economic group is approximately 4 billion
D)this socio-economic group is a focus for global businesses

Question 13

All of the following are examples of Canadian companies that are successfully competing in the global marketplace except:

A)Iceculture Inc.
B)Clearwater Seafoods
C)Canada Goose
D)Disney

Question 14

The trade feedback effect is one argument for:

A)free trade agreements.
B)increased tariffs and quotas.
C)international trade associations.
D)decreasing a nation's imports.

Question 15

Global businesses,such as Motorola have recognized the importance of offering products to the 'bottom of the pyramid' socio-economic group.All of the following are features of a cell phone that Motorola offers to this group except:

A)extra-long battery life
B)extra-loud volume
C)standby time of a couple of weeks
D)controls in English to encourage learning the language

Question 16

In a world where 70 percent of all countries do not have convertible currencies or where government-owned enterprises lack sufficient cash or credit for imports,other means of payment are used.An estimated 15 to 20 percent of world trade involves _________,the practice of using barter rather than money for making global sales.

A)predatory pricing
B)a countertrade
C)cross-cultural exchange
D)economic adaptation

Question 17

By 2040,it is estimated that all of the following will be part of Canada's top 10 export markets except:

A)Brazil
B)Mexico
C)South Korea
D)Nigeria

Question 18

Which of the factors below has played a key role in increasing Canadian exports to global markets:

A)increased free trade
B)higher tariffs
C)increased political turmoil
D)currency instability

Question 19

Which of the following statements about Canadian gross domestic product (GDP)is NOT true?

A)Canada's gross domestic product is valued at over $1.75 trillion.
B)Canada exports over 50% of GDP, making it an important trading nation.
C)The three largest importers of Canadian goods and services are the United States, Japan and the European Union (EU).
D)Canada exports over 35% of GDP, making it an important trading nation.

Question 20

Volvo of North America delivered automobiles to the Siberian police force when Siberia had no cash to pay for them.It accepted payment in oil,which it then sold for cash to pay for media advertising.This international exchange is an example of:

A)predatory pricing.
B)a countertrade.
C)cross-cultural exchange.
D)economic adaptation.

Question 21

According to Michael Porter's diamond of national competitive advantage,both the number and sophistication of domestic customers for an industry's product are examples of:

A)structural conditions.
B)demand conditions.
C)socio-cultural conditions.
D)competitive conditions.

Question 22

A nation's ability to turn its natural resources,education,and infrastructure into a competitive advantage is reflected in:

A)structural conditions.
B)factor conditions.
C)socio-cultural conditions.
D)competitive conditions.

Question 23

The German leadership in scientific and industrial instrumentation relates directly to the cluster of supporting German precision engineering suppliers.This is an example of ________ in their competitive advantage as a nation.

A)structural conditions
B)demand conditions
C)related and supporting industries
D)competitive conditions

Question 24

Every day,in a third-class carriage of the express train that rolls between Bombay and Ahmedabad,plainly dressed couriers carry precious cargo: diamonds.Rough gems are imported to Bombay from dealers in London,Antwerp,Tel Aviv,and New York,taken by these couriers to cutting and polishing centers in Gujarat state,and then carried back to Bombay to be reexported to the world.This system,based on trust,secrecy,and skilled low-cost labour,has been working for half a century.It has helped make India the world's premier center for diamond cutting and polishing.Nine out of every 10 stones sold in the world pass through India,making diamonds that country's largest export at $6.6 billion a year.This ability to use its skilled labour as a resource is an example of what Michael Porter would term:

A)structural conditions.
B)demand conditions.
C)socio-cultural conditions.
D)factor conditions.

Question 25

The Dutch lead the world in the cut-flower industry because of their research in flower cultivation,packaging,and shipping-not because of their weather.This is an example of ________ in their competitive advantage as a nation.

A)structural conditions
B)demand conditions
C)socio-cultural conditions
D)factor conditions

Question 26

Michael Porter has identified four key elements in a nation's competitive advantage.They are factor conditions,related and supporting industries; and company strategy,structure,and rivalry; and:

A)demand conditions.
B)consumer behaviour.
C)industrial diversity.
D)governmental regulation.

Question 27

Michael Porter has identified four key elements in a nation's competitive advantage.They are demand conditions; related and supporting industries; and company strategy,structure,and rivalry; and:

A)consumer behaviour.
B)industrial diversity.
C)governmental regulation.
D)factor conditions.

Question 28

A graphical representation of Michael Porter's elements which create a nation's competitive advantage looks like a:

A)diamond.
B)pyramid.
C)continuum.
D)circle or loop.

Question 29

Researchers concluded that all of the below are effective axioms to include social media in a global marketing strategy except

A)Social media is a function of the technology, culture, and government of a particular country.
B)In the age of social media, local events seldom remain local.
C)In the age of social media, general issues seldom remain general; that is, macro issues tend to be re-interpreted locally.
D)Social media is most useful as a "one-size-fits-all" approach, as it is too difficult to target each culture and their norms and perceptions effectively.

Question 30

Why might an upstart firm developing a new type of landing gear want to locate in Quebec's advanced aerospace cluster,home to firms such as Boeing,Bombardier,Pratt & Whitney,and Rolls Royce?

A)factor conditions
B)demand conditions
C)related and supporting industries
D)company structure, strategy, and rivarly

Question 31

Which of the following statements best describes the recent relationship between the imports into Canada and the exports from Canada?

A)No accurate data has been available on trade imports and exports.
B)The volume of imports and exports has consistently decreased.
C)Imports into Canada and exports have been about equal, indicating balanced trade.
D)Exports have exceeded imports, indicating a continuing trade surplus.

Question 32

Michael Porter has identified four key elements to explain why some companies and industries succeed globally while others fail.These four elements collectively are called:

A)balance of trade.
B)the "diamond" of national competitive advantage.
C)industrial diversity.
D)trade feedback effect.

Question 33

Nine out of every 10 diamonds sold in the world pass through India,making diamonds that country's largest export at $6.6 billion a year.One of the reasons for its success is the nation's 2,500 trading firms,its banks,airlines,customers' offices,and courier services that make sure the diamonds are safely delivered.Most of these are members of the diamond trading bourse in Bombay.According to Michael Porter's theory about national competitive advantage,India's success in the diamond industry is due in part to its:

A)company strategy, structure, and rivalry.
B)absence of competition.
C)related and supporting industries.
D)factor conditions.

Question 34

Which of the following is an example of related and supporting industries?

A)media exposure of products
B)existence of supplier clusters
C)sophistication of consumers
D)intensity of competition

Question 35

Which of the following is an example of a demand condition?

A)natural resources
B)existence of supplier clusters
C)sophistication of consumers
D)intensity of competition

Question 36

To become leaders in the world market,countries need related and supporting industries because:

A)suppliers can generate revenue for further investment.
B)they want to eliminate the need to import materials from other countries.
C)clusters of strong suppliers can accelerate innovation.
D)most countries still believe strongly in protectionism.

Question 37

Coca-Cola has adopted a short-message communication tool,similar to Twitter that is more prominent in South East Asia,to disseminate and market their soft-drink products.All of the following are likely reasons that Coca-Cola is using this local communication tool,except

A)the local communication tool has more followers
B)more local soft drink brands use this communication tool
C)Twitter is not well adopted in South East Asia
D)the local communication tool has a small, but loyal following

Question 38

The Italian shoe industry has become a world leader because of intense domestic competition among such firms as MAB,Bruno Magli,and Rossimoda,which has made shoes for Christian Dior and Anne Klein Couture.This is an example of ________ in their competitive advantage as a nation.

A)company strategy, structure, and rivalry
B)demand conditions
C)related and supporting industries
D)competitive conditions

Question 39

Austria has been described as "the very heartland of European coffee culture." Austrians drink 21.5 litres of coffee per person annually.Starbucks wanted to open coffeehouses in Austria and sell Starbucks coffee there.For Starbucks,the Austrian level of coffee sophistication would be an example of:

A)structural conditions.
B)demand conditions.
C)socio-cultural conditions.
D)competitive conditions.

Question 40

Japan's sophisticated consumers expect quality in their TVs and radios,thereby making Japan's producers,such as Sony,Sanyo,Matsushita,and Hitachi,some of the world leaders in the electronics industry.This is an example of ________ in their competitive advantage as a nation.

A)structural conditions
B)demand conditions
C)socio-cultural conditions
D)competitive conditions

Question 41

When Bell,Telus,and Rogers,lobby and petition the Canada government to change the regulation rules with regards to foreign ownership of telecom companies.Bell,Telus,and Rogers are trying to create a veil of ____________.

A)the rule of protective domain
B)ethnocentrism
C)domestic imperialism
D)protectionism

Question 42

In April 2001,the Japanese government,under pressure from its farm lobby,slapped government taxes on mushrooms,leeks,and the reeds used in tatami mats that were being imported from China.Japan levied:

A)GATT taxes.
B)quotas.
C)tariffs.
D)foreign excise taxes.

Question 43

To encourage using locally-produced oil from the Gulf of Mexico,the United States government applies tax to Canadian-produced oil as it crosses the border.This tax is referred to a:

A)GATT tax.
B)quota.
C)tariff.
D)foreign excise tax.

Question 44

Which of the following statements reflects Michael Porter's theory regarding national competitive advantage?

A)Clusters of strong suppliers can interfere with entry into a global market.
B)A firm that succeeds in global markets often has first succeeded in intense domestic competition.
C)A country's natural resources, education, and infrastructure often pose obstacles that cannot be overcome.
D)The first goal of a global marketer is to actively educate a nation's domestic customers.

Question 45

Which one of the following countries has the federal government's Team Canada Inc.network identified as good targets for Canadian companies seeking global growth?

A)China, India, Mexico
B)China, Indonesia, Mexico
C)China, Russia, Mexico
D)USA, India, Mexico

Question 46

Figure: 7-2
According to Michael Porter's diamond in Figure 7-2,quadrant "D" represents

A)factor conditions.
B)related and supporting industries.
C)demand conditions.
D)managerial conditions.

Question 47

The European Union (EU)bans the importation of hormone-fed U.S.beef and bioengineered corn and soybeans on safety grounds although Americans eat this food every day.This ban encourages consumers in the EU to buy domestic beef and products made from domestically produced corn and soybeans.This ban is an example of:

A)the rule of protective domain.
B)ethnocentrism.
C)domestic imperialism.
D)protectionism.

Question 48

Figure: 7-2
According to Michael Porter's diamond in Figure 7-2,quadrant "C" represents

A)factor conditions.
B)related and supporting industries.
C)demand conditions.
D)managerial conditions.

Question 49

According to economists,protectionism does each of the following except:

A)protects a nation's political security.
B)discourages economic dependency on foreign countries.
C)encourages the development of domestic industries.
D)encourages increased imports in protected industries.

Question 50

According to Michael Porter,in most cases a firm that succeeds in global markets has first succeeded in _____________ competition.

A)intense international
B)moderate international
C)intense domestic
D)moderate domestic

Question 51

Although there are many factors contributing to the success of major global marketers,a common theme seems to be that they:

A)first became involved with a formalized trade organization (such as the EU, NAFTA, etc.).
B)specialized in services rather than consumer goods.
C)employed a multi-cultural or multi-national staff.
D)first succeeded in intense domestic competition.

Question 52

Tariffs serve primarily to:

A)encourage foreign trade.
B)equalize production capacity.
C)raise prices on imports.
D)limit the quantity of goods leaving the domestic market.

Question 53

Deregulation in which industry in Mexico represents an excellent opportunity for Canadian companies seeking to export their product?

A)Natural Gas
B)Telecommunications
C)Entertainment
D)Food

Question 54

Which of the following is NOT an element of company strategy,structure,and rivalry?

A)number of companies in an industry
B)public ownership
C)private ownership
D)existence of supplier clusters

Question 55

If you wanted to set up a business importing amber from Denmark to Canada,you would have to plan on paying Canada Customs roughly 20 percent of the value of the product as a:

A)bribe.
B)tariff.
C)subsidy fee.
D)revenue.

Question 56

The Chinese market is an attractive proposition for many globally oriented Canadian companies.All of the following are demand characteristics of the Chinese market except:

A)Rising demand for food staples.
B)Rising health concerns are boosting the demand for medical equipment.
C)There is a demand for better infrastructure including transportation, water-supply systems, and telecommunications systems.
D)China has an appetite for consumer products and natural resources.

Question 57

Those in favour of protectionism would never say that protectionism:

A)discourages economic dependency on foreign countries.
B)encourages the development of domestic industries.
C)helps reduce tariffs and quotas.
D)protects a nation's political security.

Question 58

Figure: 7-2
According to Michael Porter's diamond in Figure 7-2,quadrant "A" represents

A)factor conditions.
B)related and supporting industries.
C)demand conditions.
D)managerial conditions.

Question 59

Figure: 7-2
According to Michael Porter's diamond in Figure 7-2,quadrant "B" represents

A)factor conditions.
B)related and supporting industries.
C)demand conditions.
D)company strategy, structure, and rivalry.

Question 60

Which industry in India represents an excellent opportunity for Canadian companies seeking to export their product?

A)Natural Gas
B)Telecommunications
C)Entertainment
D)Food

Question 61

Which of the following issues raises a question about the ethics of protectionism?

A)Competitive advantage grows out of continuous improvement.
B)Small firms succeed in foreign niche markets.
C)Tariffs have declined from an average of 40 percent to less than 5 percent.
D)Regional trade agreements provide preferential treatment for member nations.

Question 62

The primary function of the General Agreement on Tariffs and Trade (GATT)has been to limit trade barriers and promote world trade through the:

A)establishment of an international Board of Commerce.
B)explicit assessing of non-tariff trade barriers of services.
C)reduction of tariffs.
D)equalization of international quotas on manufactured goods.

Question 63

The world's largest manufacturer of peppermint candy canes was in Albany,Georgia,until it could no longer afford to buy the sugar needed for its operation.It moved its manufacturing business to Mexico where there are no restrictions (as existed in the U.S.)on the amount of sugar that can be brought into the nation.The movement of this U.S.business to Mexico was caused by a(n)_____ established by the U.S.government.

A)tariff
B)blocked currency
C)quota
D)excise tax

Question 64

All of the following are suitable reasons why Target entered Canada except:

A)adoption of NAFTA by Canada and the USA
B)large Canadian market potential
C)understanding that numerous Canadians cross-border shop at Target stores
D)declining customer satisfaction in the USA

Question 65

One of the reasons why North American automotive manufacturers have been successful,despite the labour costs,has been because of which agreement?

A)the El Paso/Juarez Pact
B)the U.S.-Canada Fair Trade Agreement
C)the Multinational Corporation Accord
D)the North American Free Trade Agreement

Question 66

All of the following would be reasons against using a social media service such as 'Vine' in India except

A)an advanced/recent social media network may not have been adopted yet
B)the social media site may not meet local customs/norms
C)residents of India generally are considered first adopters of new social media tools
D)political restrictions may hinder the marketing message that could be shared on the social network

Question 67

Every country engages in some form of protectionism.However,protectionism has declined internationally over the past 50 years due in large part to the:

A)Balance of Trade Agreement (BOTA).
B)International Trade Feedback Act (ITFA).
C)General Agreement on Tariffs and Trade (GATT).
D)Gross Domestic Product Agreement (GDPA).

Question 68

There is a limit on imported television sets to the United Kingdom and Japanese motorcycles to Italy.These are examples of:

A)a government tax on goods or services entering a country.
B)a government tax on goods or services leaving a country.
C)a restriction placed on the amount of a product allowed to enter or leave a country.
D)the minimum quantity of goods foreign manufacturers must produce in order to keep prices competitive.

Question 69

Former U.S.President Bill Clinton attempted to protect American firms from foreign competition by placing a government tax on Japanese automobiles imported to the United States.President Clinton's goal was to raise the price on Japanese imports,thereby encouraging American consumers to purchase American-made automobiles.The tax the President threatened to impose is an example of a:

A)boycott.
B)tariff.
C)quota.
D)sanction.

Question 70

The restriction on the importing of garments made in Cambodia into the U.S.is lower for those manufacturers that allow their factories to be monitored by the International Labor Organization (ILO).These restrictions are examples of:

A)GATT taxes.
B)blocked currencies.
C)quotas.
D)foreign excise taxes.

Question 71

To encourage local production of corn by Canadian farmers,the Canadian government limits the amount of corn that can be shipped in from the United States.As such,Canada is imposing a ______ on corn.

A)boycott
B)tariff
C)quota
D)sanction

Question 72

The EU has benefited its member nations by providing each of the following EXCEPT:

A)the free flow of goods, services, capital, and labour across borders within the EU.
B)abundant marketing opportunities because it is no longer necessary to market products and services on a nation-by-nation basis.
C)European-wide distribution from fewer locations, given open borders.
D)a common currency, the euro, adopted by all 27 members.

Question 73

According to 'bottom of the pyramid' researchers,approximately how many people live on less than $2 a day?

A)1 billion
B)2 billion
C)3 billion
D)4 billion

Question 74

The United States is facing an ongoing trade dispute with China over the flooding of cheap electronics into the country.This dispute is likely to be resolved by which international organization?

A)World Health Organization
B)World Trade Organization
C)International Cooperation Organization
D)League of Nations

Question 75

Negotiations are currently under way to create a Free Trade Area of the Americas which would include the United States,Canada,Mexico,Latin American countries,and:

A)South America.
B)Greenland.
C)Caribbean countries.
D)the Canary Islands.

Question 76

What is the international agreement which includes Indonesia,Malaysia,Philippines,Singapore,Thailand,Brunei,Vietnam,Laos,Myanmar,and Cambodia?

A)APEC
B)ASEAN
C)AFTA
D)MERCOSUR

Question 77

What is the international agreement that promotes economic integration around the Pacific Rim?

A)APEC
B)MERCOSUR
C)PACRIM
D)ASEAN

Question 78

Companies located in Uruguay are able to trade with companies located in Argentina because of which agreement?

A)APEC
B)ASEAN
C)AFTA
D)MERCOSUR

Question 79

There are more than 150 WTO member countries,including Canada,accounting for more than _______ percent of world trade.

A)60
B)70
C)80
D)90

Question 80

An international treaty intended to limit trade barriers and promote world trade through the reduction of tariffs is known as the

A)North Atlantic Treaty Organization (NATO).
B)General Agreement on Tariffs and Trade (GATT).
C)North American Free Trade Agreement (NAFTA).
D)Restraint of Trade Treaty (ROTT).