Exam 13: Selecting and Managing Entry Modes

Describe the process of how the documentary collection procedure works using an example.

________ is the most common form of international business activity.

Scenario: Sports Stuff Inc. Herb Graham is vice president of Sports Stuff Inc., a business that develops, manufactures, and markets sports products. The company is looking to expand its operations into the European market. Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe, the company will achieve success there. -The board of directors of Sports Stuff is concerned with the firm's lack of experience in foreign markets.To minimize this problem,Herb recommends that the firm create a ________ with a local partner.

________ take ownership of the merchandise when it enters their country and accept all the risks associated with generating local sales.

Scenario: Wang's Techno Toys Ann Wang has been successfully running Wang's Techno Toys that sells high-tech toys in the domestic market. Continually increasing and stiff competition at home has now forced Wang's Techno Toys to enter international markets through direct exports. -Which of the following will most likely help Techno Toys sell its toys directly to buyers in the target market?

Which of the following normally takes the form of a wire transfer of money from the bank account of the importer directly to that of the exporter prior to shipment of merchandise?

Cross licensing occurs when companies use licensing agreements to swap intangible property with one another.

Countertrade is not an option for smaller companies because of the cash outlays involved.

Explain franchising with examples.Mention the advantages and disadvantages associated with franchising.How is franchising different from licensing?

Letters of credit are popular among traders because it reduces the risk of non-shipment.

Companies can achieve economies of scale in production by expanding into international markets.

What are the different financing methods available to exporters and importers?

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. -Which of the following methods would Gro-Tru be implementing if it exchanges its products directly for other goods or services without the use of money?

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. -If Owen's HomeCare Products decides to sell their products to intermediaries who then resell them to buyers in target markets,the company would be engaging in ________ and use the services of an Export Management Company (EMC).

Letters of credit are popular among traders because the risk of non shipment are assumed by ________.

Scenario: Sports Stuff Inc. Herb Graham is vice president of Sports Stuff Inc., a business that develops, manufactures, and markets sports products. The company is looking to expand its operations into the European market. Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe, the company will achieve success there. -Which of the following entry modes would Sports Stuff be implementing if it hires a company to design,construct,and test a production facility on its behalf?

What is the primary risk an exporter faces with documentary collection?

Low tariffs and high quota limits encourage market entry by means of investment.

Which of the following is a strategic factor that influences a company's international entry mode selection?

Buyback is the export of industrial equipment in return for products produced by that equipment.