Question 1

In industries such as footwear, it is too expensive to manufacture products in Australia. In order to remain competitive, footwear companies such as Blundstone have shifted their production overseas, with the finished goods being _____________ back to their home country, Australia.
A) released
B) outsourced
C) exported
D) imported

Accepted Answer

When production is shifted overseas, the finished goods are imported back to the home country for sale. This is because the goods are produced outside and then brought into the country, which is the definition of importing.

Question 2

Cochlear gained substantial scale economies and market share in bionic ears by:
A) forging alliances with partners, along with sensible exporting.
B) establishing licensing arrangements with partners globally.
C) forming a joint venture with South Korean firm Samsung.
D) manufacturing in a central location and exporting to other markets.

Accepted Answer

Cochlear gained substantial scale economies and market share in bionic ears by manufacturing in a central location and exporting to other markets, which allowed them to optimize production and reduce costs.

Question 3

Among the three main disadvantages associated with a turnkey strategy are:
A) reduced likelihood of realising experience curve economies.
B) missed opportunities to form partnerships with other firms.
C) inadvertently creating a competitor.
D) unfair distribution of rewards.

Accepted Answer

The answer of Among the three main disadvantages associated with...

Question 4

With its roots in the simple trading of goods and services for other goods and services, countertrade has evolved into a diverse set of activities that include all except which two of the following?
A) Barter and counter purchasing
B) Hedging and speculating
C) Offset and switch trading
D) Compensation and buy-back

Accepted Answer

Hedging and speculating are financial strategies used to manage risk and invest or make profit from market movements, respectively, rather than direct forms of countertrade, which involve the exchange of goods and services.

Question 5

A firm's optimal choice of entry mode depends on the firm's strategy. When technological know-how constitutes a firm's core competence, _______________________ is the preferred entry mode.
A) wholly owned subsidiary
B) licensing
C) acquisition
D) turnkey project

Accepted Answer

When technological know-how is a firm's core competence, a wholly owned subsidiary is preferred to protect its technology and maintain control over its operations.

Question 6

All except which one of the following are reasons why acquisitions may fail?
A) Failure to integrate operations
B) The acquiring firm overpaying for the target
C) Lack of government support
D) High level of management attrition after acquisition

Accepted Answer

Lack of government support is not typically listed among the primary reasons why acquisitions may fail. The main reasons often include failure to integrate operations, overpaying for the target company, and high management attrition after the acquisition, which can disrupt operations and hinder the success of the merger.

Question 7

Joint venture agreements can be constructed to minimise the risk of unwittingly giving away a technology that is central to the core competence of one of the firms. One option is to hold majority ownership; another is to:
A) patent technology.
B) 'wall off' technology.
C) hide technology.
D) form agreements with firms with similar capabilities.

Accepted Answer

'Wall off' technology refers to the practice of protecting sensitive technology or information within a company by restricting access to it, even within a joint venture. This helps in minimizing the risk of inadvertently sharing core competencies or critical technology with a partner.

Question 8

Vetafarm is a small firm located in regional New South Wales that specialises in pet and zoo animal health and welfare products. The company chose to internationalise because of a:
A) desire to help all animals.
B) limited domestic market.
C) licence agreement.
D) takeover.

Accepted Answer

Vetafarm likely chose to internationalize due to a limited domestic market, seeking broader opportunities for growth and sales in international markets beyond the constraints of regional New South Wales.

Question 9

After half a century of operating internationally, German discount retailer Aldi entered the Australian grocery market in 2001 using a _____________ strategy.
A) franchising
B) exporting
C) greenfield
D) acquisition

Accepted Answer

Aldi entered the Australian market using a greenfield strategy, which involves starting a new operation from scratch in a foreign country rather than through acquisition or franchising.

Question 10

Cross-licensing agreements are one way to achieve the goal of swapping ____________ and _______________ that each company in a strategic alliance covets, and ensuring a chance for equitable gain.
A) competencies; knowledge
B) information; markets
C) skills; technologies
D) technologies; valuable assets

Accepted Answer

The answer of Cross-licensing agreements are one way to achieve...

Question 11

The term _______________ refers to a diverse set of activities that can be categorised into five distinct types of trading arrangement: barter, counter purchase, offset, switch trading and compensation or buy-back.
A) tactical trading
B) countertrade
C) trade affiliation
D) economic association

Accepted Answer

Countertrade refers to a variety of trading arrangements that do not rely on standard methods of international trade payment (such as currency exchange). Instead, it encompasses alternative arrangements like barter, counter purchase, offset, switch trading, and compensation or buy-back, allowing countries or companies to trade goods and services directly.

Question 12

Barter is the direct exchange of goods or services between two parties, without a cash transaction. The problems with barter are twofold. Firstly, if goods are not exchanged simultaneously then one party ends up financing the other for a period and, secondly, firms risk:
A) losing time over negotiating terms.
B) losing the opportunity to form alliances with other firms
C) having to accept goods they cannot use or find difficult to resell.
D) losing control over operational processes

Accepted Answer

In a barter system, firms may have to accept goods they cannot use or find difficult to resell, which is a significant risk.

Quiz 11: Entering Foreign Markets

In industries such as footwear, it is too expensive to manufacture products in Australia. In order to remain competitive, footwear companies such as Blundstone have shifted their production overseas, with the finished goods being _____________ back to their home country, Australia.

Cochlear gained substantial scale economies and market share in bionic ears by:

Among the three main disadvantages associated with a turnkey strategy are:

With its roots in the simple trading of goods and services for other goods and services, countertrade has evolved into a diverse set of activities that include all except which two of the following?

A firm's optimal choice of entry mode depends on the firm's strategy. When technological know-how constitutes a firm's core competence, _______________________ is the preferred entry mode.

All except which one of the following are reasons why acquisitions may fail?

Joint venture agreements can be constructed to minimise the risk of unwittingly giving away a technology that is central to the core competence of one of the firms. One option is to hold majority ownership; another is to:

Vetafarm is a small firm located in regional New South Wales that specialises in pet and zoo animal health and welfare products. The company chose to internationalise because of a:

After half a century of operating internationally, German discount retailer Aldi entered the Australian grocery market in 2001 using a _____________ strategy.

Cross-licensing agreements are one way to achieve the goal of swapping and ___ that each company in a strategic alliance covets, and ensuring a chance for equitable gain.

The term _______________ refers to a diverse set of activities that can be categorised into five distinct types of trading arrangement: barter, counter purchase, offset, switch trading and compensation or buy-back.

Barter is the direct exchange of goods or services between two parties, without a cash transaction. The problems with barter are twofold. Firstly, if goods are not exchanged simultaneously then one party ends up financing the other for a period and, secondly, firms risk: