Exam 13: Selecting and Managing Entry Modes

The most important disadvantage of a strategic alliance is that it can create a future local or even global competitor.

Matching market needs to the company's abilities is the first step in developing a successful export strategy.

What are the advantages of pursuing a wholly owned subsidiary as an entry strategy?

A company proposes that in exchange for a hard-currency sale,it will make a hard-currency purchase of an unspecified product from the buyer nation in the future.Which of the following is the company proposing?

Which of the following is an investment entry mode?

Which of the following statements is true of licensing?

Which of the following is a method of export/import financing in which the importer's bank issues a document stating that the bank will pay the exporter when the exporter fulfills the terms of the document?

A time draft extends the period of time following delivery by which the importer must pay for goods.

Which of the following letters of credit can be modified without obtaining approval from either the exporter or the importer,by the bank issuing the letter of credit?

Advance payment is commonly used for export/import financing when ________.

Scenario: Gro-Tru Grows To Europe Gro-Tru, a maker of chemical fertilizers and pesticides, sees enormous growth potential in Central Europe. The company has received several inquiries from potential importers in the region, but in most cases, the potential importers have expressed difficulty in obtaining the hard currency to pay for Gro-Tru's products. Alistair Green, vice-president for business development, is exploring how Gro-Tru can meet the needs of the potential market. -Alistair has identified an option that might help the firm deal with the importer's inability to pay with hard currency.The option involves selling goods or services that are paid for in whole or part with other goods or services.Which of the following methods is Alistair considering?

What is the first step in selecting a foreign market?

Why would an exporter use a sales representative or a distributor? Why would the exporter be reluctant to offer an open account payment method?

Most large companies use exporting to increase sales and open up new markets when the domestic market has become saturated.

________ is a countertrade whereby one company sells to another its obligation to make a purchase in a given country.

Which of the following financing methods entails the greatest risk for importers?

Companies involved in direct exporting typically rely on ________.

Scenario: Owen's HomeCare Products Owen McCain, owner of Owen's HomeCare Products, is considering going international. He feels that the products he manufactures will be well-received, especially in developing countries. He wants to understand the exporting process and then scale his exporting activities accordingly. -Which of the following steps would Owen implement toward the end while developing a successful export strategy?

Scenario: Gro-Tru Grows To Europe Gro-Tru, a maker of chemical fertilizers and pesticides, sees enormous growth potential in Central Europe. The company has received several inquiries from potential importers in the region, but in most cases, the potential importers have expressed difficulty in obtaining the hard currency to pay for Gro-Tru's products. Alistair Green, vice-president for business development, is exploring how Gro-Tru can meet the needs of the potential market. -One option that intrigues Alistair is the process in which one company sells to another its obligation to make a purchase in a given country.This arrangement is known as ________.

The biggest advantage of an export management company is usually its ________.