Exam 13: Selecting and Managing Entry Modes

Letters of credit are popular among traders because banks assume most of the risks.

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

Which of the following is an advantage of wholly owned subsidiaries?

Using a distributor increases an exporter's risk.

Companies involved in direct exporting typically rely on ________.

Which of the following is the most common method of buying and selling goods internationally?

A document ordering the importer to pay the exporter a specified sum of money at a specified time is called a ________.

Which of the following types of joint ventures involve parties investing together in downstream business activities?

Which of the following is a contractual entry mode?

The primary advantage of franchising is that franchisees have a great degree of organizational flexibility.

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

Which of the following allows a country to earn back some of the currency it pays out for imports?

A(n)________ becomes a negotiable instrument that can be traded among financial institutions when inscribed "accepted" by an importer.

Most large companies use exporting as a means of expanding total sales when the domestic market has become saturated.

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

Which of the following is true of distributors?

A ________ is a separate company created and owned by two or more independent entities to achieve a common business objective.

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 methods of export/import financing is Techno Toys' bank using if it acts as an intermediary without accepting financial risk?

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

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. -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.