Question 1

In the context of foreign market entry, _____ are long-term, nonequity associations between a company and another in a foreign market.

Accepted Answer

Contractual agreements are long-term, nonequity associations between a company and another in a foreign market.

Question 2

In the context of foreign market entry, _____ serve as a means of transfer of knowledge rather than equity.

Accepted Answer

Contractual agreements serve as a means of transfer of knowledge rather than equity.

Question 3

In the context of foreign market entry, a _____ is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective without forming a separate legal entity.

Accepted Answer

A strategic international alliance (SIA) is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective.

Question 4

Which of the following relationship skills is necessary during the initiating activity of building a strategic alliance?

Accepted Answer

The third relationship activity in building a strategic alliance is labeled as initiating. It involves bringing key executives into action and creating trust through face-to-face time. These actions require the key relationship skill of trust building. Refer to Exhibit 12.3-Building Strategic Alliances.

Question 5

Which of the following forms of business relationships lets a company grant patent rights, trademark rights, and the rights to use technological processes to another company in a foreign country?

Accepted Answer

Patent rights, trademark rights, and the rights to use technological processes are granted in foreign licensing.

Question 6

In the context of foreign market entry strategies, the advantages of _____ are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse.

Accepted Answer

The advantages of licensing are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse.

Question 7

Which of the following is true of franchising?

Accepted Answer

Franchising is a rapidly growing form of licensing in which the franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management. The combination of skills permits flexibility in dealing with local market conditions and yet provides the parent firm with a reasonable degree of control. The franchiser can follow through on marketing of the products to the point of final sale. It is an important form of vertical market integration. Potentially, the franchise system provides an effective blending of skill centralization and operational decentralization. Foreign laws and regulations are friendly toward franchising because it tends to foster local ownership, operations, and employment.

Question 8

Pots and Pans Inc., a large U.S. kitchenware distributor, sells its inventory twice a year to CookWell Corp., a kitchenware retailer in the United States. CookWell, in turn, sells those products through its retail stores in Vietnam and Thailand. Which of the following is Pots and Pans most likely engaged in?

Accepted Answer

Pots and Pans Inc. is engaged in indirect exporting. Indirect exporting usually means that a company sells to a buyer (importer or distributor) in the home country, which in turn exports the product.

Question 9

Which of the following primary relationship activities in building strategic alliances involves facilitating the creation of personal relationships at many levels, traveling to partner facilities and engaging in technical conversations, and blending social and business time?

Accepted Answer

The fourth relationship activity in building a strategic alliance is labeled as interfacing. It involves facilitating the creation of personal relationships at many levels, traveling to partner facilities and engaging in technical conversations, and blending social and business time. Refer to Exhibit 12.3-Building Strategic Alliances.

Question 10

In the context of foreign market entry, _____ requires no equity investment and thus has a low risk, low rate of return, and little control.

Accepted Answer

Indirect exporting requires no equity investment and thus has a low risk, low rate of return, and little control.

Question 11

Which of the following modes of foreign market entry offers the most control and the highest potential return for a company?

Accepted Answer

Direct foreign investment requires the most equity of the four modes of foreign market entry and creates the greatest risk while offering the most control and the potential highest return.

Question 12

Kwok Winn wants to open a new business in his own country, Singapore. He has decided on a form of licensing that will provide him with a standard package of products, systems, and management services in order to sell fast food to local residents. Which of the following best describes the form of business that Mr. Winn has chosen?

Accepted Answer

In this case, Mr. Winn has chosen to conduct his business through franchising. Franchising is a rapidly growing form of licensing in which the franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management.

Question 13

Which of the following relationship skills is necessary during the imaging activity of building a strategic alliance?

Accepted Answer

Seeing the reality in possibilities, creating a shared vision from being together, and involving trusted senior managers are actions taken during the imaging stage of building a strategic alliance. These actions require the key relationship skill of creating intimacy. Refer to Exhibit 12.3-Building Strategic Alliances.

Question 14

The first relationship activity in building a strategic alliance, where senior executives leverage their personal networks is labeled as _____.

Accepted Answer

The first relationship activity in building a strategic alliance is labeled as dating. It involves senior executives leveraging personal networks and wondering how to respond to inquiries and how to seek out possibilities. Refer to Exhibit 12.3-Building Strategic Alliances.

Question 15

Which of the following primary relationship activities in building strategic alliances involves bringing key executives into action and creating trust through face-to-face time?

Accepted Answer

The third relationship activity in building a strategic alliance is labeled as initiating. It involves bringing key executives into action and creating trust through face-to-face time. Refer to Exhibit 12.3-Building Strategic Alliances.

Question 16

Which of the following primary relationship activities in building strategic alliances involves seeing the reality in possibilities of an alliance, creating a shared vision from being together, and involving trusted senior managers?

Accepted Answer

The second relationship activity in building a strategic alliance is labeled as imaging. It involves seeing the reality in possibilities of an alliance, creating a shared vision from being together, and involving trusted senior managers. Refer to Exhibit 12.3-Building Strategic Alliances.

Question 17

Pots and Pans Inc., a large U.S. kitchenware distributor, takes a selection of its inventory twice a year to Vietnam and sells it to CookWell Corp., a large Vietnam-based kitchen retailer. CookWell, in turn, sells those products through its retail stores in Vietnam and Thailand. Which of the following best describes the alternative market-entry strategy that Pots and Pans is engaged in?

Accepted Answer

In this scenario, Pots and Pans Inc. is engaged in direct exporting. With direct exporting, a company sells to a customer in another country. This method is the most common approach employed by companies taking their first international step because the risks of financial loss can be minimized.

Question 18

GHB Corp. is a manufacturer of consumer goods. It intends to sell its products in Vietnam as it is looking to enter into Asian markets. It does not want to make any equity investment and is keen on minimizing any risk of loss in the foreign market. It is also willing to settle for a low rate of return. Which of the following types of foreign market-entry strategies is GHB most likely to follow?

Accepted Answer

In this case, GHB Corp. is most likely to follow indirect exporting. The amount of equity required by a company to use different modes affects the risk, return, and control that it will have in each mode. Indirect exporting requires no equity investment and thus has a low risk, low rate of return, and little control.

Question 19

Which of the following is true of franchising?

Accepted Answer

Franchising is a rapidly growing form of licensing in which the franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management. The combination of skills permits flexibility in dealing with local market conditions and yet provides the parent firm with a reasonable degree of control. The franchiser can follow through on marketing of the products to the point of final sale. It is an important form of vertical market integration. Potentially, the franchise system provides an effective blending of skill centralization and operational decentralization. Foreign laws and regulations are friendly toward franchising because it tends to foster local ownership, operations, and employment.

Question 20

A direct sales force may be required in a foreign country particularly for _____.

Accepted Answer

Particularly for high-technology and big ticket industrial products, a direct sales force may be required in a foreign country.

Quiz 12: Global Marketing Management: Planning and Organization

In the context of foreign market entry, _____ are long-term, nonequity associations between a company and another in a foreign market.

In the context of foreign market entry, _____ serve as a means of transfer of knowledge rather than equity.

In the context of foreign market entry, a _____ is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective without forming a separate legal entity.

Which of the following relationship skills is necessary during the initiating activity of building a strategic alliance?

Which of the following forms of business relationships lets a company grant patent rights, trademark rights, and the rights to use technological processes to another company in a foreign country?

In the context of foreign market entry strategies, the advantages of _____ are most apparent when capital is scarce, import restrictions forbid other means of entry, a country is sensitive to foreign ownership, or patents and trademarks must be protected against cancellation for nonuse.

Which of the following is true of franchising?

Which of the following primary relationship activities in building strategic alliances involves facilitating the creation of personal relationships at many levels, traveling to partner facilities and engaging in technical conversations, and blending social and business time?

In the context of foreign market entry, _____ requires no equity investment and thus has a low risk, low rate of return, and little control.

Which of the following modes of foreign market entry offers the most control and the highest potential return for a company?

Which of the following relationship skills is necessary during the imaging activity of building a strategic alliance?

The first relationship activity in building a strategic alliance, where senior executives leverage their personal networks is labeled as _____.

Which of the following primary relationship activities in building strategic alliances involves bringing key executives into action and creating trust through face-to-face time?

Which of the following primary relationship activities in building strategic alliances involves seeing the reality in possibilities of an alliance, creating a shared vision from being together, and involving trusted senior managers?

Which of the following is true of franchising?

A direct sales force may be required in a foreign country particularly for _____.