Question 1

Which of the following strategies for reaching global markets allows firms to expand into foreign markets with little or no investment?

Accepted Answer

Foreign licensing allows firms to enter foreign markets by granting a foreign company the rights to produce and sell their products, requiring little or no investment from the original firm.

Question 2

In the context of the strategies for reaching global markets, which of the following statements is true of exporting?

Accepted Answer

Exporting is the most basic level of international market development, as it involves selling domestically produced products to foreign markets.

Question 3

Identify a true statement about foreign licensing.

Accepted Answer

Foreign licensing is common in the food and beverage industry as it allows companies to expand their brand and products internationally without the need for direct investment in foreign markets.

Question 4

Identify a true statement about exporting.

Accepted Answer

Exporting allows small and mid-sized companies to access international markets with relatively lower risk and investment compared to other forms of global involvement.

Question 5

_____ means buying products domestically that have been produced or grown in foreign nations.

Accepted Answer

Importing means buying products domestically that have been produced or grown in foreign nations.

Question 6

Vieorien, a company based in the country of Dannistel, has permitted a foreign company the rights to produce its products and to use the Vieorien trademark. However, Vieorien does not have the authority or the rights to dictate the business operations of the foreign company. In this scenario, the foreign company that Vieorien deals with is the _____.

Accepted Answer

The foreign company is the licensee because it has been granted the rights to produce Vieorien's products and use its trademark, while Vieorien is the licensor.

Question 7

Tanya Williams, the chief executive officer of Willister Computers, believes that the firm is currently best equipped to enter the market of Troyesna, a fast-developing country. The firm offers a small-scale producer in Tryoesna the right to produce and market its goods based on a set of specific operating functions and requirements. This scenario of Willister Computers illustrates _____.

Accepted Answer

This scenario illustrates foreign franchising, where Willister Computers allows a local producer in Troyesna to produce and market its goods under specific conditions.

Question 8

_____ refers to selling products in foreign nations that have been produced or grown domestically.

Accepted Answer

Exporting refers to selling domestically produced or grown products to foreign nations.

Question 9

Which of the following companies is engaged in importing?

Accepted Answer

A company engaged in importing buys goods from other countries to sell domestically. Option D describes a company buying electronic goods manufactured in other countries, which is an import activity.

Question 10

In the context of the strategies for reaching global markets, which of the following is a disadvantage of foreign outsourcing?

Accepted Answer

Foreign outsourcing can lead to ethical concerns, as companies may have less control over the labor practices and environmental standards of their foreign partners, potentially risking adherence to ethical standards.

Question 11

In _____, firms either acquire foreign firms or develop new facilities from the ground up in foreign countries.

Accepted Answer

Direct investment involves acquiring foreign firms or developing new facilities in foreign countries.

Question 12

Brixbee Inc., a European electronics company, has given a domestic firm in Lougard, an Asian country, the rights to manufacture and market its product within Lougard. In this scenario, Brixbee Inc. is most likely involved in _____.

Accepted Answer

Foreign licensing involves granting a company in another country the rights to produce and sell a product within that country.

Question 13

Pyoiunalek's, a restaurant chain, markets and endorses its businesses in other countries by offering buyers the rights to launch and operate the restaurant in that country. It lends financial and marketing assistance to the buyers. In this scenario, Pyoiunalek's is employing the strategy of _____ to reach global markets.

Accepted Answer

Pyoiunalek's is using foreign franchising, where it allows buyers in other countries to operate its restaurant under its brand, providing them with financial and marketing support.

Question 14

Neminski, an Arab country, is renowned for its rich oil reserves. It earns approximately $1.3 billion annually by selling crude oil to other countries. Given this information, Neminski is most likely involved in _____.

Accepted Answer

Neminski is earning money by selling crude oil to other countries, which is an example of exporting. Exporting involves selling goods or services produced in one country to another country.

Question 15

_____ is the authority granted by a domestic firm to an overseas firm for the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area.

Accepted Answer

Foreign licensing is the authority granted by a domestic firm to an overseas firm to produce and market its product or use its trademark/patent rights in a specific geographical area.

Question 16

Which of the following companies is involved in foreign licensing?

Accepted Answer

Foreign licensing involves a company granting another company in a different country the rights to produce and sell its products, which is described in option B.

Question 17

Which of the following strategies for reaching global markets is a specialized type of licensing?

Accepted Answer

Foreign franchising is a specialized type of licensing where a firm allows a foreign company to use its brand, products, and business model in exchange for fees or royalties.

Question 18

In the context of the strategies for reaching global markets, which of the following is a key risk of foreign outsourcing?

Accepted Answer

Involvement of social responsibility is a key risk of foreign outsourcing because it can lead to increased costs, delays, and reputational damage.

Question 19

In the context of the strategies for reaching global markets, a(n) _____ is a firm that is offered the right to produce and market another firm's products if it agrees to specific operating requirements.

Accepted Answer

A franchisee is a firm that is granted the right to produce and market another firm's products under specific operating requirements set by the franchisor.

Question 20

Rubicon Inc., an American guitar manufacturing company, signed a contract with a supplier in Umreia, an Asian country, to manufacture guitars. Rubicon then imported these products and sold them in its markets under its own brand name. Rubicon did this because of the availability of cheap labor in Umreia that substantially cut down Rubicon's cost of production. In this scenario, Rubicon is most likely involved in _____.

Accepted Answer

Rubicon is involved in foreign outsourcing, as it is contracting a supplier in another country to produce goods at a lower cost, which it then imports and sells under its own brand.

Quiz 3: The World Marketplace: Business Without Borders