Question 1

Shana and her finance colleagues are discussing the costs associated with an international market expansion,which includes the need for new product development funds.Their concerns represent __________ factors.

Accepted Answer

The company's funding resources are largely under their control.

Question 2

The most important indicator of how quickly a firm is ready and willing to export is the speed at which resources beneficial to international competitiveness are developed.

Accepted Answer

Developing resources beneficial to international competitiveness, such as market research, international distribution channels, and language and cultural knowledge, indicates a firm's readiness and willingness to export. The faster these resources are developed, the quicker the firm can enter and compete in the international market. Therefore, the speed of resource development is a significant indicator of a firm's ability to export.

Question 3

The fact that the typical channel of distribution in State Chemical's target market involves many intermediaries and several layers of pricing discouraged them pursuing business there.The firm was impacted by the target country factor of __________________________.

Accepted Answer

This category includes the political, economic, geographic and social factors that make one country more attractive for international commerce than another, and is unrelated to channels of distribution.

Question 4

The two categories of external factors considered in determining the mode of global market entry are ____________________________.

Accepted Answer

These are just two of the target country factors that must be considered when assessing modes of global market entry.

Question 5

While small and large companies are different in many respects,their choices of market entry methods are often the same.

Accepted Answer

The choices of market entry methods can differ significantly for small and large companies, depending on their capitalization, production capacity, and marketing resources, among other issues.

Question 6

When Nutrablend Corporation assessed its mode of entry for operations in Belgium,it discovered that foreign sales office personnel were subject to high levels of corporate contribution to social security programs.Nutrablend then decided to utilize its UK sales office for sales into the market.The company was affected by the target country's factor of ___________________ conditions.

Accepted Answer

Market size and growth are unrelated to the issue of government social policies.

Question 7

Diamond Machining Technology was forced to improve its domestic operations by virtue of global competition.

Accepted Answer

The statement suggests that Diamond Machining Technology faced competition from overseas and had to improve its operations in the U.S. in order to stay competitive.

Question 8

Responding to import competition from China and Israel,Diamond Machining Technology,discussed in Box 8-1,deliberately initiated exports of its diamond-based sharpeners to those markets.

Accepted Answer

Although DMT had no plans to compete in international markets, foreign competition on its own turf forced this 30-employee company to improve their products.

Question 9

A large and growing domestic market will commonly provide incentive for companies to expand internationally.

Accepted Answer

A large domestic market can make some companies disinterested in expanding internationally due to the significant growth opportunities at home.

Question 10

Bernie is poring over data accumulated to fine-tune his company's foreign market entry plans.His stack of papers include statements of business ethics,income and balance sheets,maps of geographic and market coverage and a series of client references.Bernie is most likely investigating __________________________________.

Accepted Answer

While some of these factors might be legal issues, Bernie's investigation of client references would preclude this response.

Question 11

Exporters that utilize intermediaries who specialize in this activity from the home base are implementing ___________________.

Accepted Answer

In direct exporting a firm handles the export process directly with internal personnel.

Question 12

The laws and regulations regarding import/export partnerships are generally consistent from country to country owing to the increasing numbers of foreign trade agreements.

Accepted Answer

The laws and regulations of some countries differ from others and can, for example, make it problematic to pull out of a distribution or an agent contract even when that party is not performing its contractual duties.

Question 13

Exporting is limited to actual physical products that are produced outside the target country market.

Accepted Answer

Exporting involves sending physical goods from one country to another, so it is limited to actual physical products that are produced outside the target country market.

Question 14

Low- to moderate-risk strategies commonly employed by SMEs include all of these options except _______________.

Accepted Answer

This method inheres little risk apart from that of sharing confidential strategy data with another firm.

Question 15

"What are the key success factors for our products?" "Do we have excess production capacity?" and "Which of our products have the highest potential abroad?" are all questions posed when a firm determines ___________________________.

Accepted Answer

This decision would already have been made if the firm were asking the questions noted.

Question 16

Changes in economic,competitive,government,and market factors,can be anticipated by the process of _______________________________.

Accepted Answer

Environmental scanning is the process of analyzing and monitoring external factors such as economic, competitive, government, and market factors that may affect a business's strategy and operations. This helps a business to anticipate and prepare for changes in these factors. The other options, such as the International Product Life Cycle model, competitive scanning, and technology scanning, may be useful tools for analyzing specific aspects of a business environment, but they do not encompass the broad range of external factors that environmental scanning considers.

Question 17

Functional Furniture Inc.has uncovered a market for its compact,ready-to-assemble children's furniture in Japan.Because it has limited financial,marketing,and human resource capabilities,and must tap the market quickly,its best entry method is likely ___________________.

Accepted Answer

Exporting is the best entry method for Functional Furniture Inc. as it requires limited financial, marketing, and human resource capabilities. It allows the company to tap the market quickly without investing in foreign operations or partnerships. Exporting will also allow the company to test the market and gather feedback before deciding on further expansion strategies.

Question 18

All of the following are reasons that a firm expands into international markets except: ___________________________.

Accepted Answer

Expanding into international markets actually exposes a firm to global competition, rather than immunizing it from it. Therefore, A is the answer that does not fit the given reasons for why firms expand into international markets.

Question 19

Hakim is lucky.He loves his job! As an executive with Lean Jean denim in the U.S.,he is responsible for arranging the marketing,sales and transport for the firm's clothing lines to all of its global markets through his company's subsidiaries worldwide.Lean Jeans conducts international business via ______________________.

Accepted Answer

Direct exporting involves the company selling its products directly to customers in foreign markets without the involvement of any intermediaries. As Hakim is responsible for arranging the marketing, sales and transport for the company's clothing lines, it suggests that Lean Jeans conducts international business via direct exporting.

Question 20

In order to optimize foreign markets,the entry mode employed must be consistent and retain its original structure.

Accepted Answer

Entry modes may have to be restructured as environmental conditions change.

Quiz 8: Entering Global Markets