Question 1

According to the text,the most prevalent reason for mergers is:

Accepted Answer

The text states that "the most common reason for mergers is to achieve economies of scale." Therefore, B) is the best choice.

Question 2

All of the following is true of the General Agreement on Tariffs and Trade except:

Accepted Answer

The General Agreement on Tariffs and Trade (GATT) does not have extensive authority to enforce trade practices, as its membership is voluntary and it relies on negotiation and consultation between member nations. Enforcement of trade practices is handled by the World Trade Organization (WTO), which was established in 1995 to replace GATT as the primary mechanism for international trade negotiations and dispute resolution. The other statements are true of GATT.

Question 3

List the seven various aspects of culture.

Accepted Answer

The answer of List the seven various aspects of culture....

Question 4

_____ is a type of merger in which acquiring and acquired companies have related production and/or distribution activities but do not have products that compete directly with each other.

Accepted Answer

A product extension merger is a type of merger in which acquiring and acquired companies have related production and/or distribution activities but do not have products that compete directly with each other. They have related but distinct products that can complement each other and enable the combined entity to offer a wider range of products to customers.

Question 5

Identify and briefly describe the four sections of an opportunity assessment plan.

Accepted Answer

The answer of Identify and briefly describe the four sections...

Question 6

What is a nonequity arrangement? Define the two major types of nonequity arrangements: licensing and turn-key projects,and give at least one advantage and disadvantage for each.
A.Licensing - involves an entrepreneur who is a manufacturer (licensee)giving a foreign manufacturer (licensor)the right to use a patent,trademark,technology,production process,or product in return for the payment of a royalty.
Benefit: Low development costs and risks.
Disadvantages: Lack of control over technology,inability to realize location and experience curve economies,inability to engage in global strategic coordination.
B.Turn-key projects - A method of doing international business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners.
Benefits: relatively low risk,ability to earn returns from process technology skills in countries where FDI is restricted.
Disadvantages: Creation of efficient competitors,lack of long-term market presence.

Accepted Answer

The answer of What is a nonequity arrangement? Define the...

Question 7

Define political risk analysis,and identify and briefly describe the three major types of political risk.
A.Operating risk - risk of interference with the operations of the venture
B.Transfer risk - risk in attempting to shift assets or other funds out of the country
C.Ownership risk - the largest potential risk,where the country takes over the venture's property and employees

Accepted Answer

The answer of Define political risk analysis,and identify and briefly...

Question 8

Explain the major factors an entrepreneur needs to consider in choosing the best distribution channel in a foreign country.

Accepted Answer

The answer of Explain the major factors an entrepreneur needs...

Question 9

What are the major reasons why an entrepreneur would go global?

Accepted Answer

The answer of What are the major reasons why an...

Question 10

The North American Free Trade Agreement (NAFTA)is between which of the following countries?

Accepted Answer

NAFTA is an agreement between the United States, Canada, and Mexico.

Question 11

McDonald's acquiring its store franchises is an example of what type of merger?

Accepted Answer

McDonald's acquiring its store franchises is an example of a vertical merger, where it is integrating with a supplier or distributor in the supply chain to gain better control and efficiency in the business process.

Question 12

Explain what the differences are between a business plan and an opportunity assessment plan.

Accepted Answer

The answer of Explain what the differences are between a...

Question 13

Philip Morris acquiring Miller Brewing is an example of what type of merger?

Accepted Answer

Philip Morris acquiring Miller Brewing is an example of a product extension merger because it involves a company expanding its product line or market reach by acquiring another company that operates in a related sector, thereby offering complementary products or services.

Quiz 5: Identifying and Analyzing Domestic and International Opportunities