Exam 13: Selecting and Managing Entry Modes

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

Which of the following is the first step in developing a successful export strategy?

Which of the following is true of distributors?

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

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 CEO of Sports Stuff has decided that the company needs to retain complete control over its operations in Europe.To achieve this objective,Herb would most likely recommend that the firm establish a ________.

Typically,indirect exporting relies on local sales representatives or distributors.

In a backward integration joint venture,the parties choose to invest together in downstream business activities.

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

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. -Through his research,Owen learns that the first step in developing a successful export strategy is ________.

When one company is hired to design,construct,and test a production facility for a client,the arrangement is called ________.

Which of the following occurs when a company sells its products to buyers in a target market without going through intermediary companies?

Agency relationships are popular among exporters because they are easy to terminate should difficulties arise.

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. -Gro-Tru would be engaging in ________,if it decides that in exchange for a hard-currency sale it would make a hard-currency purchase of an unspecified product from the importing nation in the future.

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. -In some countries,people exchange electronic goods for Techno Toys instead of paying money for them.This practice is known as ________.

Selling goods or services that are paid for,in whole or part,with other goods or services is called ________.

Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors?

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

Advance payment made by an importer to an exporter normally takes the form of a sight draft.

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. -Herb has been exploring another type of entry mode that requires ongoing assistance on the part of one firm,often in the form of start-up capital,management training,or location advice.Herb is most likely considering ________.

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?