Exam 18: Global Opportunities for Small Business

You Make the Call-Situation 1 Bill Moss and several other small business owners joined a trade mission to China to explore market opportunities there. The group learned that China has a population of 1.3 billion and is the third-fastest-growing export market for small- and medium-sized U.S. firms. Average annual income for farmers in China is approximately $285 per person; typical urban income is about $827, with an average of $1,557 a year in more prosperous cities like Shanghai. In any given year, the Chinese software market grows by 30 percent and the number of Internet users quadruples. Furthermore, the demand for management consulting services is increasing, especially information technology consulting. Members of the group were surprised by the number of people who had cell phones and regularly surfed the Internet, especially in large urban centers such as Beijing, Shanghai, and Guangzhou. On the downside, they found that counterfeit goods (from clothing and leather goods to software and CDs) were readily available at a fraction of the cost of legitimate merchandise and that local merchants expressed an interest in doing business only with vendors with whom they had established relationships. (Sources: Data from http://www.china.org.cn/english/2002/Feb/26975.htm and http://www.china.org.cn/BAT/28231.htm.)

For the small business that wants to go global, one of the activities that is most fundamental to success abroad is

Importing is the "flip side" of exporting.

When it comes to expanding the market, an emerging motivation for going global is to

List and briefly describe the main strategy options for small firms that decide to go global.

Internationalization is increasing among large firms, but this has not been the trend with small businesses in recent years.

When Howard Podolsky began to market his eco-friendly refrigeration technology he found that _____ markets were far more interested in it than their american counterparts.

Salvatore intended from the start that his small pasta firm would sell its products in overseas market, some would say the business

Considering the nature of its products, a cement fabricator that specializes in the manufacture of bird baths is likely to go global to

The export strategy option involves

Learning effects are the direct result of economies of scale in operations.

In the past, firms tended to introduce new products in the United States first and then sell them in other developed nations, giving no attention to less-advanced countries because of their weak consumer purchasing power.

Because technologies are becoming increasingly sophisticated, expensive, and short-lived,

International business will never be as easy as doing business at home.

With a foreign licensing strategy, the company purchasing the right to manufacture and sell a product in overseas markets is called the

Which term below refers to the increasing similarities found in markets around the world?

A revocable letter of credit is an agreement to honor a draft or other demand for payment when specified conditions are met and cannot be changed unless both the buyer and the seller agree to the change.

The Internet has been helpful to small firm operations in the United States, but there are too few customers with Internet access in foreign markets to make this a powerful tool for going global.

These days, the rival on the other side of the street from a firm may be a minor threat compared to an online competitor on the other side of the globe.

With a foreign licensing strategy, the company granting the right to manufacture and sell a product in overseas markets is called the