Exam 1: Introduction: What Is International Business

Calexor is a telecommunications SME that has been highly successful despite its limited resources. Stakeholders attribute Calexor's success to its ability to serve niche markets. Which of the following, if TRUE, would most strongly support the claim that Calexor's growth can be attributed to niche market sales?

International Trade Summit (Scenario) An international trade summit is held in Geneva, Switzerland. The purpose of the summit is to cooperatively develop policies that promote international trade. Representatives from 50 different countries attend the summit. -One of the attendees represents a leading nation in the international services trade. This attendee is most likely from which of the following countries?

Each of the following represents a factor of production EXCEPT ________.

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. -One shareholder wanted clarification about a research effort that investigated the possibility of setting up a plant in China. The CEO explained that serving China's rapidly growing middle class population would enable Sterling to increase the size of its customer base dramatically. In China, the CEO was most likely interested in ________.

In a short essay, describe the major trends in the growth of foreign direct investment (FDI) since the 1980s.

Which of the following is another term for importing?

Each of the following types of organizations is active in international business EXCEPT ________.

Which of the following best explains why Taiwanese computer manufacturers established subsidiaries in the United States?

For manufacturing companies, on a per-unit-of-output basis, high volumes of production are correlated with lower per-unit cost.

International business today is predominantly the domain of large, multinational companies.

Sterling Auto International (Scenario) Sterling Auto International is a successful car manufacturing company headquartered in Detroit, Michigan. Over the past year, the company implemented multiple efforts to expand its overseas operations. At a recent shareholder's meeting, attendees questioned the CEO's motivations for authorizing certain aspects of the expansion efforts. -The CEO justified one of the company's moves by pointing out that it not only enabled Sterling to benefit from global sourcing advantages, but it also provided access to new ideas about business methods. The shareholders viewed this justification positively most likely because they understood which of the following?

SMEs usually choose exporting as their main strategy for entering foreign markets.

Which of the following would NOT be considered an example of foreign direct investment (FDI)?

What distinguishes an MNE from an SME? In a short essay, describe the major differences between the two types of firms.

Overseas Expansion (Scenario) Whittaker Semiconductors has recently decided to expand its operations overseas. Amanda Quan, Vice President of International Business, assigned a team of investigators to analyze the risks faced by the company in making this move. Of particular interest were the risks that might affect the success of a new production plant to be located in one of three potential countries. -LeShaun Golding researched the risks linked to establishing the plant in Country B. He cited government intervention, lack of local managerial talent, and unethical business practices as the most prominent risks for this location. LeShaun noted all of the following types of risks EXCEPT ________.

International business is also known as which of the following?

In a short essay, explain the cross-cultural risk faced by internationalizing firms. What causes this type of risk? Why might it pose a problem for internationalizing firms?

Which of the following is an example of a new global challenger?

In a short essay, explain why nonprofit organizations might conduct cross-border activities.

For internationalizing firms, the consequences of poor business management decisions are usually more costly when mistakes occur abroad than when they occur at home.