Question 1

Exporting has two advantages: These are:
A)forging alliances partners along with sensible exporting.
B)the multiplier effect along with growth prospects.
C)contract manufacturing along with nurturing direct contacts.
D)avoiding substantial manufacturing costs along with experience curve advantages.

Accepted Answer

Avoiding substantial manufacturing costs along with experience curve advantages is the best choice as it highlights the cost-saving benefits of exporting and the potential for the company to improve its costs and efficiency over time. While the other options also have potential benefits, they do not directly relate to the advantages of exporting.

Question 2

The trade of goods and services for other goods and services via a whole range of barter-like agreements is called:
A)insider trading.
B)competitive bargaining.
C)countertrade.
D)marketing edge.

Accepted Answer

The trade of goods and services for other goods and services via a whole range of barter-like agreements is called countertrade. This typically occurs between countries with trade restrictions or limited access to international currency exchange. Insider trading refers to the illegal practice of trading stock based on insider information. Competitive bargaining is a negotiation strategy in which each party tries to achieve their own objectives. Marketing edge refers to techniques or strategies that give a company an advantage over its competitors. None of these concepts are directly related to the exchange of goods and services through barter-like agreements.

Question 3

For the novice small exporter,using an agent located within the home country may be the best option until the firm gains more experience.This is called:
A)indirect exporting.
B)direct exporting.
C)individual exporting.
D)discreet exporting.

Accepted Answer

Indirect exporting involves hiring an intermediary located in the exporter's home country to handle all aspects of the export transaction. This option is often recommended for novice exporters who lack the resources, knowledge, or experience to manage their export operations on their own. The intermediary, typically an export agent, can provide a range of services, such as finding foreign buyers, negotiating prices and terms, arranging shipping and logistics, handling documentation and paperwork, and ensuring compliance with export regulations. By using an agent, the firm can minimize its risk and costs while still accessing foreign markets and testing its export potential. With time and success, the firm may consider shifting to direct exporting, which involves selling directly to foreign customers without an intermediary.

Question 4

Countertrades main attraction is that it can give a firm a way to:
A)finance an export deal when other means are not available.
B)broker a deal that will help collect as much pertinent information on potential allies as possible.
C)counteract any criticism in deal-sharing arrangements.
D)get to know the potential partner well before committing to trade.

Accepted Answer

Countertrade allows firms to finance export deals when other means, such as traditional currency exchanges, are not available. This can be particularly helpful for small or cash-strapped companies looking to expand into new markets.

Question 5

The advantages of franchising as an entry mode are similar to that of:
A)strategic alliances.
B)turnkey projects.
C)licence agreements.
D)contract manufacturing.

Accepted Answer

The advantages of franchising as an entry mode are similar to that of licensing agreements. Both allow the franchisor/licensor to expand globally quickly while maintaining control over their brand and product/service quality. Additionally, both modes involve a low investment of capital and provide a relatively low-risk option for entering new markets. Strategic alliances and contract manufacturing involve more complex partnerships and require significant investment and risk. Turnkey projects involve the complete transfer of knowledge and technology, which may not be suitable for all types of businesses.

Question 6

___________ is basically a specialised form of granting the rights to intangible property to another entity (the licensee)for a specified period.
A)Cooperative synergies
B)Strategic alliances
C)Licensing
D)Tactical partnerships

Accepted Answer

The definition provided in the statement clearly describes licensing as the process of granting rights to intangible property to another entity for a specific time. Cooperative synergies and strategic alliances refer to different types of business collaborations, and tactical partnerships is not a widely known or commonly used term in business.

Question 7

One of the principal risks with turnkey projects is:
A)forging alliances partners.
B)to give control of a firm's technology to its partner(s).
C)a firm has no long-term interest in the foreign country.
D)intangible property rights.

Accepted Answer

The answer of One of the principal risks with turnkey...

Question 8

A firm and its subsidiaries who own 100% of its shares is regarded as:
A)risk averse.
B)a very successful firm.
C)debt free.
D)a wholly owned subsidiary.

Accepted Answer

A firm and its subsidiaries who own 100% of its shares is known as a wholly owned subsidiary. This means that the owning firm has full control over its subsidiary's operations and decisions, as they hold all of the subsidiary's stocks. It does not necessarily mean that the firm is risk averse, debt-free, or very successful, as these factors are not determined solely by ownership structure.

Question 9

One of the principal risks with joint venture agreements is:
A)that they bring together the complementary skills of alliances partners.
B)to give control of a firm's technology to its partner.
C)a firm can give away more than it receives.
D)that they allow firms to share fixed costs.

Accepted Answer

To give control of a firm's technology to its partner.

Question 10

According to the textbook,the success of any type of cooperative venture is a function of three factors.These are: partner selection,alliance structure and ________________.
A)similarity in size of the alliance partners
B)geographic distance between the alliance partners
C)the manner in which the venture is managed
D)government support

Accepted Answer

The third factor that determines the success of any cooperative venture is the manner in which the venture is managed. It is important for the partners to establish clear objectives, governance frameworks, decision-making processes, and conflict resolution mechanisms. Effective management ensures that the alliance operates efficiently and that the partners are able to leverage each other's strengths to achieve their goals. While similarity in size and geographic distance might be important considerations, they are not as critical as partner selection and alliance structure. Government support can be beneficial, but it is not always necessary for success.

Question 11

In cooperative ventures,to increase the probability of selecting a good partner,a firm should do all of the following,except:
A)collect as much pertinent,publicly available information on potential allies as possible.
B)contact the potential ally's family and friends to find out as much information as possible.
C)collect data from informed third parties.
D)get to know the potential partner as well as possible before committing to an alliance.

Accepted Answer

Contacting a potential ally's family and friends is inappropriate and likely to be ineffective in evaluating the suitability of the partner. The other choices are appropriate steps in selecting an appropriate partner for a cooperative venture.

Question 12

Non-convertibility of currency implies that the exporter may not be paid in his or her home currency,and few exporters would desire payment in a currency that is not convertible.One solution to overcome this problem is to:
A)cross-cultural trade.
B)countenance offset trade.
C)currency hedge.
D)countertrade.

Accepted Answer

Countertrade is a solution where goods and services are exchanged instead of using a non-convertible currency, allowing trade to continue despite currency issues.

Question 13

If exporting is done well,it usually results in what is called a positive:
A)productivity element.
B)multiplier effect.
C)significant outcome.
D)reproductive capacity.

Accepted Answer

The multiplier effect is a well-known positive outcome of exporting. When a company exports its products, it creates ripple effects through the economy, stimulating other industries such as transportation, packaging, and banking. This leads to job creation, increased economic activity, and ultimately a stronger economy. Therefore, choice B is the best choice as it correctly identifies the positive outcome of exporting. The other choices are not entirely relevant.

Question 14

One of the principal risks with franchising is:
A)forging alliances partners.
B)to give control of a firm's technology to its partner(s).
C)a firm must bear the full capital costs and risks of setting up overseas operations.
D)quality control.

Accepted Answer

Quality control is one of the principal risks in franchising because a franchisor cannot directly control how its brand and products are presented and perceived by customers at each franchise location. Franchisees may not adhere to the same standards as the franchisor, leading to inconsistent customer experiences and potential damage to the brand.

Question 15

Skills within the firm that competitors cannot easily match or imitate are referred to as:
A)core competencies.
B)global competencies.
C)in-born skills.
D)competitive strengths.

Accepted Answer

Core competencies are skills or capabilities within a firm that are unique and difficult for competitors to replicate or imitate, providing a sustainable competitive advantage. These skills may include technology, marketing, research and development, and customer service. Global competencies, in-born skills, and competitive strengths do not necessarily refer to unique capabilities that competitors cannot easily match or imitate.

Question 16

The wine industry in Australia is reliant on oak wood and barrels to manufacture wine.As oak is not a tree that grows in Australia in the quantities and type suitable for the Australian market,oak is therefore:
A)replaced with steel and aluminium barrels.
B)not used very much.
C)used only for expensive wines.
D)imported from New ZealanD.

Accepted Answer

The passage states that oak is not a tree that grows in Australia in the quantities and type suitable for the Australian market, and thus the wine industry is reliant on importing oak from elsewhere. The only option listed that involves importing oak is D, which states that oak is imported from New Zealand.

Question 17

Toyota is able to produce high-quality,well-designed cars at a lower delivered cost than any other firm in the world.This is an example of:
A)a core competency.
B)an external opportunity.
C)an initial strength.
D)a comparative advantage.

Accepted Answer

Toyota's ability to produce high-quality, well-designed cars at a lower cost is a core competency, as it is a unique capability that gives the company a competitive advantage.

Question 18

One of the principal risks with wholly owned subsidiaries is:
A)that they bring together the complementary skills of alliances partners.
B)to give control of a firm's technology to its partner.
C)a firm must bear the full capital costs and risks of setting up overseas operations.
D)that they allow firms to share fixed costs.

Accepted Answer

Wholly owned subsidiaries require a significant investment in capital to establish operations in a foreign country, and the parent company is solely responsible for bearing the risks and financial costs. This can result in significant financial risks for the parent company.

Question 19

In cooperative ventures,managing a venture successfully requires building interpersonal relationships between the firms' managers,or what is sometimes referred to as:
A)relational capital.
B)personal capital.
C)personality advantage.
D)relationship advantage.

Accepted Answer

Relational capital is the term used to describe the value that can be created through the establishment and maintenance of effective interpersonal relationships between the managers of partnering firms. In cooperative ventures, it is crucial to build strong relationships between the parties involved to ensure that the venture is managed effectively and efficiently. This requires establishing trust, effective communication, and a shared understanding of the goals and objectives of the venture. Therefore, managing a venture successfully requires building relational capital between the firms' managers.

Question 20

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 can be categorised as agreements in all but two of the following ways:
A)barter and counter-purchasing.
B)hedge and speculating.
C)offset and switch trading.
D)compensation and buyback.

Accepted Answer

The two options that do not fall under countertrade are hedge and speculating. The other three options are all categories of countertrade. Barter and counter-purchasing involve the exchange of goods and services between two parties without using currency. Offset and switch trading involve the purchase of goods and services with the agreement to use the proceeds from the sale of other goods and services to pay for them. Compensation and buyback involve the exchange of goods and services for the promise of future business.

Quiz 11: Entering Foreign Markets

Exporting has two advantages: These are:

The trade of goods and services for other goods and services via a whole range of barter-like agreements is called:

For the novice small exporter,using an agent located within the home country may be the best option until the firm gains more experience.This is called:

Countertrades main attraction is that it can give a firm a way to:

The advantages of franchising as an entry mode are similar to that of:

___________ is basically a specialised form of granting the rights to intangible property to another entity (the licensee) for a specified period.

One of the principal risks with turnkey projects is:

A firm and its subsidiaries who own 100% of its shares is regarded as:

One of the principal risks with joint venture agreements is:

According to the textbook,the success of any type of cooperative venture is a function of three factors.These are: partner selection,alliance structure and ________________.

In cooperative ventures,to increase the probability of selecting a good partner,a firm should do all of the following,except:

Non-convertibility of currency implies that the exporter may not be paid in his or her home currency,and few exporters would desire payment in a currency that is not convertible.One solution to overcome this problem is to:

If exporting is done well,it usually results in what is called a positive:

One of the principal risks with franchising is:

Skills within the firm that competitors cannot easily match or imitate are referred to as:

The wine industry in Australia is reliant on oak wood and barrels to manufacture wine.As oak is not a tree that grows in Australia in the quantities and type suitable for the Australian market,oak is therefore:

Toyota is able to produce high-quality,well-designed cars at a lower delivered cost than any other firm in the world.This is an example of:

One of the principal risks with wholly owned subsidiaries is:

In cooperative ventures,managing a venture successfully requires building interpersonal relationships between the firms' managers,or what is sometimes referred to as:

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 can be categorised as agreements in all but two of the following ways: