Exam 12: Strategies for Analyzing and Entering Foreign Markets

Explain the meaning of internalization advantages.

What is the first step in selecting a foreign market?

Reactive motivations for exporting are those that pull a firm into foreign markets as a result of opportunities available there.

Which of the following are potential benefits of entering a new market?

A(n) ________ is a firm that acts as its client's export department.

Which of the following is the most intensive mode of entry into foreign markets?

Ownership advantages are always tangible or intangible resources owned by a firm that grant it a competitive advantage over its industry rivals.

Delvin Pharmaceuticals, a U.S. firm, is considering the idea of entering the Japanese market. Which entry mode will Delvin most likely use?

What is an export management company? Why would an exporter hire an EMC? What are the two ways that EMCs operate?

Which of the following would most likely discourage an international firm from relying on exports as an entry mode?

Franklin Carpets engages in indirect exporting, so the firm sells its carpets to a(n) ________.

Vinson Bicycles, a U.S. firm, is considering the idea of entering the EU market through an international licensing agreement. What is the main disadvantage of this entry method for Vinson?

Pharmaceutical firms routinely use licensing as their entry mode.

Which of the following is a characteristic of foreign direct investment?

Which country is the market leader in providing international business process outsourcing?

Unlike an export management company, an international trading company ________.

Management contracts are attractive because they allow firms to earn additional revenues without incurring any investment risks or obligations.

The liability of foreignness suggests that foreign firms are at a disadvantage when competing with a local firm because the local firm knows more about local customs, culture, political processes, and so on than the foreign firm. In sports, this is called the home field advantage.

When deciding which mode of entry to use, a firm must consider things like ownership advantages, location advantages, and internalization advantages.

Which term refers to compensation under a licensing agreement?