Exam 8: Entry Strategies in Global Business

Scenario - Lewis Fabrication Lewis Fabrication was founded in 2001 and is based in Maryland, USA.  This company manufactures custom designed motorcycle parts and currently has over two thousand U.S. customers.  Due to the growing number of inquiries received from foreign countries such as Japan, Canada, China, and Indonesia, Lewis Fabrication has decided to begin operations on a global scale. The owners realize there is much to learn before undertaking this monumental step.  However, financial projections indicate about $1 million in profit is very likely in the first year of going global.  The owners are very excited and looking forward to the business expansion. While Lewis Fabrication has decided to begin operations on a global scale, it realizes there is still much to learn. One of the fundamental things it must have knowledge on is the manner in which it can begin operations globally. Which one of the following would not be considered a choice for starting international business operations for this company?  

Scenario - Lewis Fabrication Lewis Fabrication was founded in 2001 and is based in Maryland, USA.  This company manufactures custom designed motorcycle parts and currently has over two thousand U.S. customers.  Due to the growing number of inquiries received from foreign countries such as Japan, Canada, China, and Indonesia, Lewis Fabrication has decided to begin operations on a global scale. The owners realize there is much to learn before undertaking this monumental step.  However, financial projections indicate about $1 million in profit is very likely in the first year of going global.  The owners are very excited and looking forward to the business expansion. In its quest for global expansion Lewis Fabrication must examine its rationales for wanting to expand into the foreign marketplace.  Which one of the following is not a reason why this company would want to expand globally?  

Of the following, which is NOT true about the export-import business?

When Coca-Cola acquired major assets of Parle Exports in India, it instantly received access to Parle's huge national bottling and distribution network. This is an example of international joint venture in global markets.

Brazil is one of the world's lowest cost producers of ethanol and soybeans. Japanese corporations have heavily invested in Brazil to lease large tracts of land to grow soybeans for export to Japan, where they are used to derive products such as soy sauce and chicken feed. These Japanese companies are cutting costs by _____.

Of the following, which is NOT a cost of foreign direct investment?

Companies go global for three possible motives. Describe each of these three motives and the possible strategies available to companies under each motive.

The first stage of the product life cycle is _____.

Briefly describe Dunning's Eclectic Theory of Foreign Direct Investment.

_______ describes how countries exercise authority and how efficiently they deliver basic infrastructure services like water, sanitation, roads, electricity, security, and the like for public as well as private firms.

Scenario - Boseman Clothier, Inc. Boseman Clothier, Inc. has been in operation for over 75 years.  It is based in South Carolina, USA and is a well-recognized name in the industry.  It produces custom fitted men's suits that are in high demand throughout the world.  The average cost of one of its suits is in excess of five thousand U.S. dollars.  Boseman proudly states it has more customer orders than its one store can fill within the next six months.  With growing demand from overseas, the company has recently decided to open operations in four foreign markets next year. Boseman realizes the potential of this move will generate increased revenues for the company.  One of the options it is contemplating is exploring forming an international joint venture.  Boseman is also entertaining the thought of opening operations differently in each of the four new foreign markets.  The company feels the use of different strategies may increase its odds of generating profits in each different market. Boseman Clothier, Inc. has decided to begin international operations using an international joint venture.  Which one of the following is not one of the expectations from this type of entry into the foreign market arena?

According to the text, which of the following entry strategies has the lowest degree of risk?

_____ advantages refer to the mode of entry abroad.

Which of the following is NOT true about franchising?

The level of corruption in a country is usually a good indicator of the degree of good or poor governance in that country.

What are the benefits and costs of foreign direct investment from the host country's perspective? Explain.

The combination of medical treatment in a foreign country with rest and recreation is called _____.

Multinational ______ are firms that are headquartered in one country, but own and control manufacturing, services, research and development facilities, or other business entities on foreign soil.

A fundamental consideration that must be made in business is the risk-return trade-off. In general, the greater the risk (loss of capital invested)entrepreneurs are willing to take, the greater the rewards (profit)they are likely to reap.

Of the following, which is NOT true of mergers and acquisitions?