Deck 9: Global Market Opportunity Assessment

Question 1

A SWOT analysis refers to analyzing a firm's Strengths, Weaknesses, Opportunities, and Tasks.

Answer 1

False

Question 2

Firm managers should determine if corporate globalization is consistent with the goals, skills, and resources of the organization.

Answer 2

True

Question 3

Natural disasters and epidemics in foreign countries lead to the emergence of potential target markets for selling products and services.

Answer 3

True

Question 4

Appropriate countries for firms intending to use FDI as an entry strategy should exhibit a potential for long-term growth with limited political risk.

Question 5

When selecting an appropriate country in which to internationalize, in order to minimize the challenges of doing business abroad, firms often choose nations with physical features and natural resources that are similar to those in their home country.

Question 6

Firms tend to first target psychically near countries, which means markets that are physically near as well.

Question 7

Estimates of industry market potential provide managers with the information necessary to select the most appropriate business partners and foreign intermediaries to facilitate FDI entry.

Question 8

By monitoring key industry-specific indicators, a manager can gain insight into the future and present activities of firm competitors.

Question 9

Proficiency and speed of a firm's success are, among other factors, dependent on human resources, financial resources, competitive environment, and partner capabilities.

Question 10

A favorable global market opportunity for a firm would most likely lead to which of the following?

A) changing product packaging
B) procuring new distributors
C) building a production facility
D) selling corporate stock

Question 11

A shoe manufacturer that is assessing a global market opportunity should first perform which of the following tasks?

A) assess the suitability of the company's shoes for foreign markets
B) analyze the firm's readiness to internationalize
C) choose foreign business partners
D) screen countries to identify foreign markets

Question 12

To assess market industry potential, a company planning to internationalize should do which of the following?

A) take action to eliminate deficiencies in the firm
B) determine the most desirable attributes in foreign business partners
C) develop a 3- to 5-year forecast of industry sales for each target market
D) determine how products or services may need to be adapted for each market

Question 13

In order to determine whether a firm is prepared to successfully internationalize, managers need to first assess their organization's resources, skills, and ________.

A) manufacturing capacity
B) motivation
C) competition
D) opportunities

Question 14

When firm managers research the external business environment of a potential market they most likely examine all of the following except ________.

A) human resources
B) buyer preferences
C) risk
D) competing products

Question 15

One of the goals that firms most likely want to attain from internationalizing is ________.

A) streamlining strategies and operations
B) expanding domestic product lines
C) increasing sales and profits
D) minimizing country risk

Question 16

Evaluating the firm's ________ provides management with the knowledge it needs to duplicate domestic success in a foreign market.

A) competitive advantage
B) diagnostic tools
C) employee motivation
D) manufacturing capacity

Question 17

A product or service will most likely do well in a foreign market if it has exhibited which of the following?

A) creative advertising
B) solid domestic sales
C) celebrity sponsorship
D) visionary leadership

Question 18

All of the following are important factors to consider when determining a product's potential in a foreign market except ________.

A) media contacts
B) buyer preferences
C) income levels
D) climate

Question 19

Which of the following countries would most likely be chosen by a British firm that was internationalizing for the first time and wanted to target a nation that is similar in "psychic" terms?

A) Australia
B) France
C) India
D) South Africa

Question 20

Firms base their operations in ________ in order to expand their markets into larger, adjacent geographical areas.

A) free-trade zones
B) facilitator nations
C) the European Union
D) gateway country

Question 21

When a researcher analyzes information, such as population, income, what products are imported, the local competition, and the like, and gradually narrows the choices of potential markets, he or she is using which screening methodology?

A) indexing
B) ranking
C) gradual elimination
D) market scoring

Question 22

Which is a source of data for doing the initial screening of potential markets?

A) export.gov
B) globalEdge
C) The Economist and other publications
D) all of the above

Question 23

When using the process of gradual elimination to screen potential country markets, a researcher completes which of the following steps first?

A) obtains general information on macro-level indicators such as export statistics
B) obtains general information on macro-level indicators like population
C) narrows down the choices with specific indicators, like import statistics
D) narrows down the choices with specific indicators, such as economic growth

Question 24

In the Emerging Market Potential Indicators index, which of the following is an indicator of market intensity?

A) annual growth rate of commercial energy use
B) percentage share of middle-class income and consumption
C) private consumption as a percentage of GDP
D) government consumption of economic output

Question 25

In the Emerging Market Potential Indicators index, which of the following is an indicator of market size?

A) real GDP growth rate
B) telephones per 100 habitants
C) population per retail outlet
D) middle class population

Question 26

In the Emerging Market Potential Indicators index, trade and tax policies are an indicator of which of the following?

A) economic freedom
B) market receptivity to imports
C) market size
D) market growth rate

Question 27

Using the Emerging Market Potential Indicators index, which of the following indicators would not be important to the manufacturer of exotic sports cars?

A) income
B) commercial infrastructures
C) country risk
D) middle class population

Question 28

Which of the following factors is typically most important to firms considering FDI entry?

A) skilled labor and managerial talent
B) economic freedom
C) market intensity
D) average income

Question 29

According to the A.T. Kearney Foreign Direct Investment Confidence Index, investors have the highest confidence in which of the following countries?

A) Malaysia and Brazil
B) Canada and France
C) Japan and Canada
D) China and India

Question 30

All of the following are factors relevant to firms performing country screening for global sourcing except ________.

A) input quality and cost
B) large consumer market
C) exchange rate stability
D) technically skilled labor

Question 31

Which of the following would most likely be a valuable resource for firms seeking prospective foreign business partners?

A) IMF
B) WTO
C) Wall Street Journal
D) Citibank

Question 32

Trade audits may provide managers insight regarding which of the following?

A) manufacturing cost estimates
B) company employee opinions
C) competitors' offerings and pricing
D) market fluctuation tendencies

Question 33

Which of the following is used by some firms to gauge long-term sales potential without fully committing to a foreign market?

A) competitor assessment
B) test marketing
C) distributor estimates
D) end-user surveys

Question 34

Comparing the data obtained from one country to data gather in another that is similar, such as the botanicals used in hair shampoo, is the technique of __________ in estimating company sales potential.

A) market research
B) analogy
C) testing the waters
D) proxy indicators

Question 35

Happy Pet Internationalization
Based in California, the Happy Pet Corporation has 45 pet supply stores across the United States. Given the firm's success in the U.S. market, Happy Pet managers are considering internationalizing their operations. Beth Schultz, the founder and CEO of Happy Pet, has expressed concerns about expanding the firm's operations into foreign markets. However, Edward O'Neal, the COO of Happy Pet, believes the corporation is ready for the next step. Happy Pet executives and managers have gathered to discuss their organization's readiness to internationalize.

-Which of the following questions would be more important for Happy Pet executives to evaluate when determining the firm's readiness to internationalize?

A) What does Happy Pet hope to gain from internationalizing its operations?
B) How are the domestic sales figures of Happy Pet's competitors?
C) What would be the best type of foreign business relationship for Happy Pet?
D) Where would be the best location for a Happy Pet product distribution center?

Question 36

Happy Pet Internationalization
Based in California, the Happy Pet Corporation has 45 pet supply stores across the United States. Given the firm's success in the U.S. market, Happy Pet managers are considering internationalizing their operations. Beth Schultz, the founder and CEO of Happy Pet, has expressed concerns about expanding the firm's operations into foreign markets. However, Edward O'Neal, the COO of Happy Pet, believes the corporation is ready for the next step. Happy Pet executives and managers have gathered to discuss their organization's readiness to internationalize.

-Which of the following most likely supports the opinion of Beth Schultz over the opinion of Edward O'Neal?

A) Happy Pet sells high-quality organic dog and cat food made in California.
B) Happy Pet's Internet sales reflect a high demand for premium pet food in the EU.
C) Happy Pet's business plan includes gaining 75% of the pet supply market in the U.S.
D) Happy Pet's competitors have successfully branched into foreign markets.

Question 37

Happy Pet Internationalization
Based in California, the Happy Pet Corporation has 45 pet supply stores across the United States. Given the firm's success in the U.S. market, Happy Pet managers are considering internationalizing their operations. Beth Schultz, the founder and CEO of Happy Pet, has expressed concerns about expanding the firm's operations into foreign markets. However, Edward O'Neal, the COO of Happy Pet, believes the corporation is ready for the next step. Happy Pet executives and managers have gathered to discuss their organization's readiness to internationalize.

-Which of the following should most likely be considered in determining whether Happy Pet is ready to internationalize?

A) Will internationalization coincide with Happy Pet's domestic Internet sales?
B) What demands will internationalization make on Happy Pet's financial resources?
C) How will Happy Pet managers determine which foreign market is appropriate?
D) Should Happy Pet relocate its corporate headquarters after internationalizing?

Question 38

All You Cosmetics
Executives of the All You Cosmetics Company have hired a consulting firm, Brown and Associates, to identify foreign markets that might be appropriate for internationalization. Brown consultants have been working for two weeks with All You managers to identify the best foreign markets for the Canadian cosmetics company, which specializes in organic cosmetics and skin care products. So far, Brown consultants have narrowed down the list of countries to fifteen. However, the consultants need to eliminate unattractive markets and reduce the list to five nations, which will then be researched more closely.

-Which of the following factors should most likely be considered by Brown consultants as they screen countries for All You Cosmetics?

A) Which markets have the highest number of skin cancer cases among women?
B) In which markets are women the primary breadwinners for their families?
C) Which markets have the highest number of environmentally friendly corporations?
D) Which markets have a growing demand for organic cosmetics and skin care products?

Question 39

All You Cosmetics
Executives of the All You Cosmetics Company have hired a consulting firm, Brown and Associates, to identify foreign markets that might be appropriate for internationalization. Brown consultants have been working for two weeks with All You managers to identify the best foreign markets for the Canadian cosmetics company, which specializes in organic cosmetics and skin care products. So far, Brown consultants have narrowed down the list of countries to fifteen. However, the consultants need to eliminate unattractive markets and reduce the list to five nations, which will then be researched more closely.

-Which of the following supports using the gradual elimination method for country screening instead of the indexing and ranking method?

A) All You managers want a list of foreign markets based on specific variables, such as market size and growth rate.
B) All You managers are primarily looking for a market with a large urban population and a great deal of economic freedom.
C) All You managers will consider any reasonable market and want to narrow down the list with increasingly specific information.
D) All You managers have assigned values to different variables within the cosmetic and skin care industry.

Question 40

Australian Business Partner
The Coffee Cup Corporation (CCC) is a large U.S.-based coffee retailer with stores across America. After months of investigation, CCC executives have decided to open their first international store in Sydney, Australia. CCC managers have been assigned the task of selecting an appropriate Australian business partner for the coffee company. CCC managers flew to Sydney to interview potential business partners, and they have narrowed the list to three.

-Business Partner X, who owns a small chain of Sydney coffee shops, has offered to make an equity investment in CCC. Which of the following types of relationships would most likely result if Business Partner X is selected?

A) intermediary partnership
B) licensing partnership
C) franchising partnership
D) international collaborative venture

Question 41

Australian Business Partner
The Coffee Cup Corporation (CCC) is a large U.S.-based coffee retailer with stores across America. After months of investigation, CCC executives have decided to open their first international store in Sydney, Australia. CCC managers have been assigned the task of selecting an appropriate Australian business partner for the coffee company. CCC managers flew to Sydney to interview potential business partners, and they have narrowed the list to three.

-Which of the following most likely supports CCC managers selecting Business Partner Y instead of Business Partner Z?

A) Business Partner Y expresses goals and objectives similar to those of CCC managers.
B) Business Partner Y was on a list of partner candidates prepared by a Sydney bank.
C) Business Partner Z went to the same university as the founder of CCC.
D) Business Partner Z recently moved from New York to start a business in Sydney.

Question 42

In a short essay, describe the purpose of CORE. How does it aid managers? Provide an example of an organization that benefited from CORE.

Question 43

In a short essay, explain why market choice is especially critical vis-à-vis foreign direct investment (FDI)? What kind of data variables are used?

Question 44

In a short essay, describe what factors are important to consider when screening a foreign market for internationalization potential.

Question 45

In a short essay, identify market potential criteria for global market opportunity assessments as well as indicators used in market potential research. Discuss their use and provide an example of a source for such data as well the problems that arise in using it.