Deck 8: Global Entry and Expansion Strategies

Question 1

Political risk is directly proportional to a country's stage of economic development.

Answer 1

False

Question 2

A company that engages in export marketing uses an extension approach to pricing, ensuring that product prices in export markets are the same as prices in the home-country market.

Answer 2

False

Question 3

The use of computer controls and technology has increased the cost of labor.

Answer 3

False

Question 4

The extent of a company's in-country presence in a target market has no impact on perceived customer value.

Question 5

The greater the distance between the product source and the target market, the lower the transportation costs.

Question 6

Licensees can become direct competitors to licensors.

Question 7

In capital-intensive industries, wage levels are often a large percentage of costs associated with a product.

Question 8

A domestic company can go global simply by responding to an unsolicited order.

Question 9

Global marketers typically take domestic products as they are and sell it to international customers.

Question 10

Before doing any business internationally, a company must look at the conditions in a potential country to analyze what the advantages, disadvantages, and costs will be and whether it is worth the risk.

Question 11

Advanced global companies generally pursue cheap labor for manufacturing locations.

Question 12

When a country's currency fluctuates drastically, a company with productive capacity in other locations can maintain its competitive advantage by shifting production.

Question 13

The costs of maintaining a global staff in an overseas market is cheaper compared to domestic sales.

Question 14

Most companies handle export operations in-house.

Question 15

Exchange-rate fluctuations have little effect on the attractiveness of a potential target market.

Question 16

Export selling involves extensive tailoring of various elements of the marketing mix to global market requirements.

Question 17

If a company's export products are similar to products manufactured inside the target market, the exported target gains competitive advantage.

Question 18

Export marketing involves tailoring various elements of the marketing mix to global marketing requirements.

Question 19

Licensing is a contractual arrangement whereby one company makes an asset available to another company in exchange for some form of compensation.

Question 20

Labor costs include the cost of workers at every level.

Question 21

________ refers to a marketing strategy where companies do not manufacture any of their product's components.

A) Product sourcing
B) Product differentiation
C) Joint venture
D) Export marketing

Question 22

Licensing is a more extensive form of participation in foreign markets than joint ventures.

Question 23

Research and development becomes centralized when a company becomes transnational.

Question 24

Mckelvey Inc., a U.S. - based cosmetics manufacturer, promotes its products using the same price value, composition, and advertisements irrespective of the target market location. In this case, the company is utilizing ________.

A) contract manufacturing
B) export marketing
C) intermediary selling
D) export selling

Question 25

Which of the following is the typical first step for a company that is going global?

A) licensing
B) direct exporting
C) inshoring
D) outsourcing

Question 26

Agents differ from distributors in that agents ________.

A) do not assist in invoice collection
B) do not take title to the goods
C) add channel value where thousands of customers are involved
D) pay directly to exporters

Question 27

How do organizations assess the political risks of an international investment?

A) The higher a country's income, the higher the political risks.
B) The more a country is transparent, the more it is risk-free.
C) The lower the income of per capita, the lower the risks.
D) The more a country allows imports, the higher the risks.

Question 28

A multinational company would be self-sufficient, decentralized, and have its key assets dispersed.

Question 29

Companies can expand seeking new country markets for already identified market segments.

Question 30

While deciding a location for a manufacturing base, which of the following can be directly determined by organizations based on the foreign exchange rate of a country's currency?

A) potential competition
B) product fit
C) demands for a product
D) costs of production

Question 31

Franchising is a contractual agreement where one company sells the rights to its brand, logo, and business model to another company.

Question 32

With foreign direct investment, the owner has a passive role without significant influence or management control.

Question 33

The stages of development for a transnational company are: domestic, international, multinational, global, and transnational.

Question 34

One advantage of a joint venture is that it may be the only way to enter a country if local laws prohibit foreign ownership.

Question 35

Escobar, a global enterprise selling athletic shoes, procures its shoes through contract manufacturing agreements with producers in developing nations. It uses its expertise in distribution and sales to promote these products. In this case, the marketing strategy used by the company is referred to as ________.

A) franchising
B) direct investment
C) product sourcing
D) joint venture

Question 36

Which of the following is true of distributors?

A) They take title to the goods.
B) They cannot add their margins to the sales.
C) They cannot resell to the trade.
D) They allow direct representation to the exporter.

Question 37

How can an organization gain market access in a new country that limits imports?

A) by establishing a production facility within the country
B) by locating a production source outside the market
C) by forming a partnership with a local distribution company
D) by establishing a local supply chain system in the neighboring country

Question 38

Which of the following is true of licensing as a form of global market entry?

A) A company can expand its market reach with almost no capital or marketing costs.
B) It allows a licensor to directly involve in the overseas market and user's needs.
C) It can restrict the growth of domestic competitors in an overseas market.
D) A company's resources cannot be exploited by another company.

Question 39

One of the strengths of the transnational company is that it combines the strengths of each of the preceding stages in an integrated network which leverages worldwide learning and experience.

Question 40

The most extensive form of participation in global markets is 100 percent ownership of a foreign subsidiary.

Question 41

Which of the following is the first stage of development of a transnational corporation?

A) global
B) international
C) domestic
D) multinational

Question 42

A ________ is referred as the collaboration between two or more firms on a specific project to serve one or more markets.

A) franchise
B) direct investment
C) portfolio
D) joint venture

Question 43

How is the location of a manufacturing base dependent on foreign exchange rate of a country's currency?

Question 44

Explain the criteria to be assessed when selecting a potential target market for export?

Question 45

Which of the following kinds of marketing orientation is a domestic company most likely to have?

A) polycentric
B) ethnocentric
C) regiocentric
D) geocentric

Question 46

Which of the following market entry strategies allows an organization 100 percent ownership of its foreign subsidiaries?

A) franchising
B) direct investment
C) product sourcing
D) joint venture