Question 1

For small businesses, the ultimate incentive to go global is the following:

Accepted Answer

A)  Purely domestic firms are less likely to stay in business over the long run. 
B)  Government programs are available to ensure success of global firms, but not domestic ones. 
C)  If you fail to seize an international market opportunity, someone else will. 
D)  Research shows that global firms experience more consistent gains in profitability. 
A)  Purely domestic firms are less likely to stay in business over the long run. 
B)  Government programs are available to ensure success of global firms, but not domestic ones. 
C)  If you fail to seize an international market opportunity, someone else will. 
D)  Research shows that global firms experience more consistent gains in profitability. C

Question 2

Peter Herring, a 32-year-old American, has decided to use set up an import/export business with friends in Thailand that he met in his MBA program. One good source of valuable information and advice about starting and maintaining the business would be the

Accepted Answer

A)  Small Business Administration. 
B)  Office of Export Trade. 
C)  International Export Board. 
D)  Foreign Service Office. 
A)  Small Business Administration. 
B)  Office of Export Trade. 
C)  International Export Board. 
D)  Foreign Service Office. A

Question 3

The interest in international markets dates back at least as far as the 1200s when Marco Polo traveled to China to trade western goods for Oriental silk and spices.

Accepted Answer

A) True 
 B)False  True

Question 4

Economic risk is very different from political risk; indeed, these forms of risk are unrelated to one another.

Accepted Answer

A) True 
 B)False

Question 5

For most small businesses, the primary motivation for going global is to

Accepted Answer

A)  develop new market opportunities. 
B)  reduce the costs of doing business. 
C)  gain access to resources that are important to the firm's operations. 
D)  capitalize on special features of location. 
A)  develop new market opportunities. 
B)  reduce the costs of doing business. 
C)  gain access to resources that are important to the firm's operations. 
D)  capitalize on special features of location.

Question 6

While not always true for small firms, large multinationals can deal with currency fluctuations by

Accepted Answer

A)  using forward contracts and foreign-currency options. 
B)  locating all their plants in the country that offers the most advantageous exchange position. 
C)  limiting sales in each country market to reduce exposure to any one currency. 
D)  following the advice of the international sales manager. 
A)  using forward contracts and foreign-currency options. 
B)  locating all their plants in the country that offers the most advantageous exchange position. 
C)  limiting sales in each country market to reduce exposure to any one currency. 
D)  following the advice of the international sales manager.

Question 7

IT Retail owner Martin Goodwin's decision to go global was because the american market was too small to ensure that he would recover development costs.

Accepted Answer

A) True 
 B)False

Question 8

When a small business owner is thinking of going global, he or she should first decide whether

Accepted Answer

A)  the firm has the necessary "deep pockets" to follow through. 
B)  domestic operations are capable of subsidizing overseas operations. 
C)  the firm has the technology necessary to get into the international game. 
D)  the company is up to the task. 
A)  the firm has the necessary "deep pockets" to follow through. 
B)  domestic operations are capable of subsidizing overseas operations. 
C)  the firm has the technology necessary to get into the international game. 
D)  the company is up to the task.

Question 9

When an American biotechnology startup establishes an office in Brazil to manage teams of biologists that search the rain forest to find new plants that may have undiscovered medicinal properties, the firm has globalized to

Accepted Answer

A)  gain access to essential raw materials. 
B)  capitalize on special features of location. 
C)  expand its supply chain. 
D)  extend the life cycle of its products. 
A)  gain access to essential raw materials. 
B)  capitalize on special features of location. 
C)  expand its supply chain. 
D)  extend the life cycle of its products.

Question 10

When the exchange rate for a currency rises relative to that of another country, the rising currency

Accepted Answer

A)  has decreased in value relative to the other currency. 
B)  has increased in value relative to the other currency. 
C)  has been devalued by its government. 
D)  reflects increased political risk in its home country. 
A)  has decreased in value relative to the other currency. 
B)  has increased in value relative to the other currency. 
C)  has been devalued by its government. 
D)  reflects increased political risk in its home country.

Question 11

If an entrepreneur has decided to go global, the next step is to

Accepted Answer

A)  begin to hire employees with international experience. 
B)  spend some time estimating the market potential of various countries. 
C)  join a trade mission. 
D)  plan a strategy that takes into account the potential of the firm. 
A)  begin to hire employees with international experience. 
B)  spend some time estimating the market potential of various countries. 
C)  join a trade mission. 
D)  plan a strategy that takes into account the potential of the firm.

Question 12

Regional free trade areas have been formed in order to

Accepted Answer

A)  duplicate government regulatory systems. 
B)  reduce tariffs to increase trade. 
C)  coordinate the currencies of included countries. 
D)  accommodate the demands of organized labor. 
A)  duplicate government regulatory systems. 
B)  reduce tariffs to increase trade. 
C)  coordinate the currencies of included countries. 
D)  accommodate the demands of organized labor.

Question 13

The established motivations behind global expansion include all of the following, except

Accepted Answer

A)  promoting the independence of the enterprise. 
B)  gaining access to resources. 
C)  expanding markets. 
D)  cutting costs. 
A)  promoting the independence of the enterprise. 
B)  gaining access to resources. 
C)  expanding markets. 
D)  cutting costs.

Question 14

Part of the appeal of forming a regional trade area is that companies can then

Accepted Answer

A)  gain access to more employees. 
B)  benefit from locational features unrelated to costs. 
C)  draw upon the advantages of a "fortress mentality." 
D)  acquire the potential to expand into international markets. 
A)  gain access to more employees. 
B)  benefit from locational features unrelated to costs. 
C)  draw upon the advantages of a "fortress mentality." 
D)  acquire the potential to expand into international markets.

Question 15

Experience curve efficiencies refers to the savings that arise from spreading activity across more units of output and from acquiring more specialize plants, equipment, and employees.

Accepted Answer

A) True 
 B)False

Question 16

Experience curve efficiencies refers to

Accepted Answer

A)  having more experienced management team members. 
B)  expanding your business globally. 
C)  insights gained by employees that lead to improved work performance. 
D)  as sales volume expands, businesses can usually find ways to be more efficient. 
A)  having more experienced management team members. 
B)  expanding your business globally. 
C)  insights gained by employees that lead to improved work performance. 
D)  as sales volume expands, businesses can usually find ways to be more efficient.

Question 17

When a small business forges an agreement with a bank that consents to honor a draft or other demand for payment after goods are delivered internationally, the firm receives a

Accepted Answer

A)  international invoice. 
B)  bill of lading. 
C)  letter of confirmation. 
D)  letter of credit. 
A)  international invoice. 
B)  bill of lading. 
C)  letter of confirmation. 
D)  letter of credit.

Question 18

Entrepreneurs decide to go global to expand their opportunities, but sometimes they are forced to enter foreign markets to compete with firms that have already done so.

Accepted Answer

A) True 
 B)False

Question 19

Perhaps the easiest way to break into international markets is to use a trade intermediary.

Accepted Answer

A) True 
 B)False

Question 20

Prior to the 1990s, startups considered going global

Accepted Answer

A)  only after they had established a solid position in the domestic market. 
B)  early in the firm life cycle. 
C)  from the beginning because market growth in the United States had stagnated. 
D)  when they recognized the wealth of support the government provided to expand abroad. 
A)  only after they had established a solid position in the domestic market. 
B)  early in the firm life cycle. 
C)  from the beginning because market growth in the United States had stagnated. 
D)  when they recognized the wealth of support the government provided to expand abroad.

Exam 18: Global Opportunities for Small Business

For small businesses, the ultimate incentive to go global is the following:

Peter Herring, a 32-year-old American, has decided to use set up an import/export business with friends in Thailand that he met in his MBA program. One good source of valuable information and advice about starting and maintaining the business would be the

The interest in international markets dates back at least as far as the 1200s when Marco Polo traveled to China to trade western goods for Oriental silk and spices.

Economic risk is very different from political risk; indeed, these forms of risk are unrelated to one another.

For most small businesses, the primary motivation for going global is to

While not always true for small firms, large multinationals can deal with currency fluctuations by

IT Retail owner Martin Goodwin's decision to go global was because the american market was too small to ensure that he would recover development costs.

When a small business owner is thinking of going global, he or she should first decide whether

When an American biotechnology startup establishes an office in Brazil to manage teams of biologists that search the rain forest to find new plants that may have undiscovered medicinal properties, the firm has globalized to

When the exchange rate for a currency rises relative to that of another country, the rising currency

If an entrepreneur has decided to go global, the next step is to

Regional free trade areas have been formed in order to

The established motivations behind global expansion include all of the following, except

Part of the appeal of forming a regional trade area is that companies can then

Experience curve efficiencies refers to the savings that arise from spreading activity across more units of output and from acquiring more specialize plants, equipment, and employees.

Experience curve efficiencies refers to

When a small business forges an agreement with a bank that consents to honor a draft or other demand for payment after goods are delivered internationally, the firm receives a

Entrepreneurs decide to go global to expand their opportunities, but sometimes they are forced to enter foreign markets to compete with firms that have already done so.

Perhaps the easiest way to break into international markets is to use a trade intermediary.

Prior to the 1990s, startups considered going global

The Entrepreneurial Life

Entrepreneurial Integrity and Ethics

Getting Started

Franchises and Buyouts

The Family Business

The Business Plan: Visualizing the Dream

The Marketing Plan

The Human Resources Plan: Managers, Owners, Allies, and Directors

The Location Plan

Understanding a Firms Financial Statements

Forecasting Financial Requirements

A Firms Sources of Financing

Planning for the Harvest

Building Customer Relationships

Product and Supply Chain Management

Pricing and Credit Decisions

Promotional Planning

Professional Management in the Entrepreneurial Firm

Managing Human Resources

Managing Operations

Managing the Firms Assets

Managing Risk in the Small Business

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