Deck 9: Country Market Analysis

Question 1

All,but one of the following,are examples of common pitfalls in exporting:

A)poor market analysis.
B)poor understanding of competitive conditions in the foreign market.
C)host government regulatory environment and business conditions.
D)a failure to customise product offering to the needs of foreign customers.

Answer 1

C

Question 2

The New Zealand Trade and Enterprise Commission is to New Zealand,the same way that the Australian Trade Commission (Austrade)is to Australia.

Answer 2

False

Question 3

Studies show that many large firms tend to be proactive about seeking opportunities for profitable exporting,whereas many small- and medium-sized firms (SMEs)are very reactive.

Answer 3

True

Question 4

It is a ______anager who may wait for an external trigger such as an unsolicited order to examine the viability of entering a foreign market.

A)proactive
B)reactive
C)junior
D)senior

Question 5

Whilst many of the larger firms benefit from international trade and FDI,fewer opportunities exist for smaller firms,particularly in joint ventures.

Question 6

A bill of lading is a document issued by a bank indicating that it will make payments to a beneficiary upon presentation of particular documents.

Question 7

Promoting export performance in Australia is the domain of the Australian Trade Commission (Austrade).

Question 8

Companies who know how to grow their firm,take advantage of economies of scale,utilise marketing advantages (unique product,marketing know-how),diversify,build the brand or extend sales of seasonal products need not undertake a county market analysis.

Question 9

A letter of credit is a document issued to an exporter by the carrier transporting the merchandise;it serves as a receipt,a contract and a document title.

Question 10

For managers in SMEs without any international experience in exporting,the best strategy to enter markets that are physically and economically close to the home market is said to be the:

A)no-risk strategy.
B)medium-risk strategy.
C)low-risk strategy.
D)high-risk strategy.

Question 11

Studies have shown that while many large firms are reactive about seeking opportunities for profitable exporting,many small- to medium-size firms (SMEs)by contrast are proactive.

Question 12

Having learned from previous experience,UNIQLO has moved cautiously in other overseas markets.Stores are established in carefully chosen locations such as London,Paris and New York to communicate brand identity and values to foreign customers.In April 2010,the company's first store was opened in:

A)Rio,South AmericA.
B)Moscow,Russia.
C)Bali,Indonesia.
D)Auckland,New ZealanD.

Question 13

One way at looking at the importance of FDI inflows is to express them as a percentage of:

A)net fixed costs allocation.
B)capital expenditure protections.
C)gross fixed capital formation.
D)secured asset investments.

Question 14

Measures and frameworks that could assist in identifying country markets,especially country competitive reports,are based on an indexing approach developed by:

A)Transparency International.
B)Asian Development Bank Key Indicators.
C)World Bank Index of Economic Growth and Development.
D)The World Economic Forum Global Economic Report.

Question 15

The Japanese retailing company Fast Retailing Co.Ltd,who in 2002 sought low-cost manufacturing in China for its UNIQLO brand of casual wear,is now searching for even lower production costs in:

A)South America and AfricA.
B)Vietnam and Bangladesh.
C)Indonesia and Thailand.
D)Suva and Tonga.

Question 16

After a firm has identified the country market,the firm then must consider the timing and scale of entry.

Question 17

3M's strategy 'to win big' in the marketplace was used on the basis of entering markets on a large scale.

Question 18

One of the first and most important decisions a firm contemplating foreign expansion must make is about:

A)resource-rich markets in which to enter.
B)taxation and other concessions.
C)timing and scale of entry.
D)sufficient staffing resources and availability.

Question 19

Given that Japan is experiencing __________ and ___________,many firms have set their sights on markets outside of Japan as a way to sustain growth.

A)a young population;long-term stagflation
B)an ageing population;short-term depression
C)a young population;short-term deflation
D)an ageing population;long-term recession

Question 20

Because of family connections and market familiarity,Australian wine producer Sirromet's first international market expansion was to:

A)ChinA.
B)Japan.
C)Sweden.
D)IcelanD.

Question 21

The probability of exporting successfully can be increased dramatically by utilising all of the following steps,except:

A)hire an EMC,or at least an export consultant,and initially focus on one market.
B)enter the market on a small scale initially,and recognise the time and managerial commitments involved.
C)devote a lot of attention to building relationships with distributors and hire local personnel.
D)be proactive to business opportunities and reactive to market threats that may arise.

Question 22

What type of costs involve promoting and establishing a product offering,including the costs of educating customers?

A)trail-blazing costs
B)pioneering costs
C)second-mover costs
D)timing costs

Question 23

The attractiveness of a country as a potential market depends on balancing the benefits,costs and risks associated with doing business in that country,and also:

A)the objectives of the firm.
B)listening to what customers want.
C)undertaking market research.
D)taking large and small orders.

Question 24

When undertaking a major analysis to determine which markets to enter,the textbook focus is on __________ overview.

A)microeconomic
B)macroeconomic
C)strategic
D)operational

Question 25

The attractiveness of a country as a potential market depends on balancing the benefits,costs and risks associated with doing business in that country,and all of the following,except:

A)the objectives of the firm.
B)the type of products it has to sell.
C)its size and resources available.
D)assessment of the competition.

Question 26

The first stage of any analysis when deciding to enter a foreign market is examining the broader economic indicators to obtain an impression of the type of economy the firm is seeking to undertake business in,its economic potential and its ______.

A)managerial skills
B)financial standing
C)degree of risk
D)competitors

Question 27

Other things being equal,the cost-risk trade-off is likely to most favourable in ______table developed and developing nations that have ______et systems.

A)economically;open
B)socially;closed
C)legislatively;flexible
D)politically;free

Question 28

Often,Australian and New Zealand firms exploring foreign markets will choose initial targets based on:

A)products and services.
B)culture and language.
C)size and timing.
D)market research and analysis.

Question 29

The _________ entrant is more likely than the _______ entrant to be able to capture the first-mover advantages associated with demand pre-emption,scale economies and switching costs.

A)small-scale;large-scale
B)small-scale;moderate-scale
C)large-scale;small-scale
D)There is no relationship between scale of entrant and the ability to capture first-mover advantages.

Question 30

Once attractive markets have been identified,it is important to consider the:

A)timing of entry.
B)competition.
C)costs involved.
D)insurance needed in the event of failure.

Question 31

When making basic entry decisions,the cost-risk trade-off is likely to be most favourable in what type of country?

A)one that is large
B)one with a free market system
C)one that is politically instable
D)a Communist country

Question 32

The Minnesota Mining and Manufacturing Company (3M)export strategy,known as FIDO,stands for:

A)frequent interplay dovetails objectives.
B)forthright involvement deepens ownership.
C)first in defeats others.
D)fast involvement demonstrates opportunities.

Question 33

Which of the following are costs that an early entrant has to bear,that a later entrant can avoid?

A)experimental costs
B)untried costs
C)introductory costs
D)pioneering costs

Question 34

The Minnesota Mining and Manufacturing Co.(3M)built its export strategy around simple principles.One is known as:

A)FIFO (First In First Out).
B)FIDO First In Defeats Others).
C)FILO (First In Last Out).
D)LILO (Last In Last Out).

Question 35

Which entry strategy is regarded as the first step in foreign direct investment (FDI)?

A)exporting
B)joint venture
C)franchising
D)contract manufacturing

Question 36

A decision that has a long-term impact,and is difficult to reverse,is:

A)an operational pledge.
B)a functional assurance.
C)a tactical covenant.
D)a strategic commitment.

Question 37

The advantages frequently associated with entering a market early are commonly known as:

A)inaugural advantages.
B)first-mover advantages.
C)initial-entrant premiums.
D)proactive-mover benefits.

Question 38

Brisbane-based winery,Sirromet,has built its success principally based on:

A)specialised white and red grape vines grown in the area for international markets.
B)selling white wine first and red wine second internationally.
C)prior experience in international markets.
D)understanding the market(s)entereD.

Question 39

The Australian Trade Commission (Austrade)provides the potential exporter with all of these services,except:

A)initiation and expansion programs.
B)trade promotion and aid.
C)extensive industry and country data.
D)export subsidy.

Question 40

Which of the following is NOT a basic decision that a firm contemplating foreign expansion must make?

A)which markets to enter
B)when to enter new markets
C)how to withdraw from markets
D)scale of entry

Question 41

By giving a firm time to collect information,_______ reduces the risks for that firm.

A)importing
B)pioneering
C)large-scale entry
D)small-scale entry

Question 42

What type of entry allows a firm to learn about a foreign market,while limiting the firm's exposure to that market?

A)minimal commitment
B)small scale
C)reduced commitment
D)maximum scale

Question 43

The __________ firm that enters a foreign market on a small scale may limit its potential losses,but it may also miss the chance to capture first-mover advantages.

A)risk-seeking
B)risk-averse
C)wise
D)unwise

Question 44

Common pitfalls of exporting include all of the following except:

A)poor understanding of competitive conditions.
B)problems securing financing.
C)poor market analysis.
D)intimidating the foreign customers.

Question 45

For Australian firms,the most comprehensive source of information about export opportunities is:

A)the Small Business Administration.
B)the Australian Trade Commission.
C)the Federal Trade Commission.
D)foreign embassies.

Question 46

Another key factor contributing to foreign direct investment is the rise in:

A)staffing.
B)synergy.
C)shared values.
D)services.

Question 47

The great promise of _______ is that large revenue and profit opportunities are to be found in foreign markets for most firms in many industries.

A)financing
B)countertrade
C)importing
D)exporting

Question 48

The success of Jollibee,a Philippines-based fast-food chain,demonstrates that:

A)developing countries can learn from the success of competing multinationals from developed countries.
B)firms from developing countries are strategically situated to succeed over firms from developed countries.
C)firms from developing countries will never catch up to those from developed countries.
D)developing countries use unethical practices to get ahead of firms from developed countries.

Question 49

Entering a market on a large scale implies:

A)rapid entry.
B)gradual entry.
C)forced entry.
D)domestic entry.

Question 50

FDI is an acronym that stands for:

A)Foreign of Direct Impact.
B)Foreign Diversification Initiative.
C)Foreign Direct Investment.
D)Foreign Direct Internationalisation.