Question 1

Which of the following is NOT an environmental factor?&#10;A) Demographic.&#10;B) Financial.&#10;C) Economic.

Accepted Answer

Financial factors are more related to the management of money by individuals or corporations and do not directly relate to the natural or built environment, unlike demographic and economic factors which can influence and be influenced by the environment.

Question 2

When is a market penetration strategy most effective?&#10;A) When the firm is introducing a new product to a current market.&#10;B) When the firm is selling current products in current markets.&#10;C) When the firm is selling current products in new markets.

Accepted Answer

A market penetration strategy is most effective when a firm is selling current products in current markets, aiming to increase its market share through tactics such as pricing strategies, advertising, sales promotions, and perhaps even minor product adjustments.

Question 3

What are switching costs?&#10;A) The costs incurred by a manufacturer in producing a new product.&#10;B) The costs incurred by a distributor in redirecting products.&#10;C) The costs incurred by a customer in changing suppliers.

Accepted Answer

Switching costs refer to the expenses that a customer incurs as a result of changing from one supplier, product, or service to another. This can include financial costs, time, effort, and any other form of inconvenience.

Question 4

Which of the following is a reactive reason to globalise?&#10;A) Profit advantage.&#10;B) Technological advantage.&#10;C) Competitive pressures.

Accepted Answer

Reactive reasons for globalization include responding to competitive pressures, rather than proactive reasons such as seeking profit or technological advantages.

Question 5

Which of the following is a proactive reason to globalise?&#10;A) Overproduction.&#10;B) Managerial commitment.&#10;C) Excess capacity.

Accepted Answer

Managerial commitment is a proactive reason to globalise, as it involves a strategic decision to expand operations and market reach beyond domestic borders, often driven by the desire to grow, innovate, and compete on a global scale.

Question 6

What is lower landed cost?&#10;A) The total cost of the product when it finally lands in the target country.&#10;B) The lower cost of a product compared with a competing, foreign product.&#10;C) The price which applies before the product is exported.

Accepted Answer

Lower landed cost refers to the total cost of a product when it finally arrives in the target country, including all associated expenses such as shipping, handling, customs duties, and taxes.

Question 7

Which of the following is a country consideration?&#10;A) Market size and growth.&#10;B) Competition.&#10;C) Economic situation.

Accepted Answer

The answer of Which of the following is a country...

Question 8

What is the Uppsala model state?&#10;A) That firms typically go through a series of stages when they enter foreign markets.&#10;B) That firms typically play to their strengths and use whichever strategy is best for them when entering foreign markets.&#10;C) That firms keep transactions to themselves if they are part of their core strengths, and subcontract everything else.

Accepted Answer

The Uppsala model states that firms typically go through a series of stages when they enter foreign markets, starting from no regular export activities to establishing foreign sales subsidiaries, in a gradual process of internationalization.

Question 9

What is an arrangement called whereby two companies with a common strategic goal make a formal or informal agreement?&#10;A) A licensing agreement.&#10;B) A franchise agreement.&#10;C) A strategic alliance.

Accepted Answer

A strategic alliance is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations. This type of partnership is often used by companies to achieve specific strategic goals, such as entering new markets or developing new products, without having to merge their businesses or make a more formal commitment.

Question 10

What is a blocked market?&#10;A) A market which has been divided up among a group of firms.&#10;B) A market which has high trade barriers.&#10;C) A market which has a lot of competition already present.

Accepted Answer

A blocked market refers to a market that is difficult for new entrants to access due to high trade barriers, such as tariffs, quotas, or stringent regulations. These barriers protect the domestic industries from foreign competition but can limit the choices available to consumers and the efficiency of the market.

Deck 7: Market Entry