Exam 13: Selecting and Managing Entry Modes

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

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?

Which of the following is an investment entry mode?

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 ________.

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

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?

Identify the strategic factors that influence a company's international entry mode selection.Explain any three of them.

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?

Direct exporters always sell directly to end users.

Export/import financing in which a bank acts as an intermediary without accepting financial risk is called ________.

Discuss the steps companies should take to avoid export and import blunders.How can an advance payment method help exporters reduce financial risk?

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?

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 ________.

What is countertrade? Explain the concept of buyback as a type of countertrade,and discuss buyback as a joint venture configuration.

Countertrade provides a way for firms to trade either by using a small amount of hard currency or even none at all.

Which of the following is the oldest known form of countertrade?

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

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. -In his research,Alistair discovers a type of arrangement in which industrial equipment is exported in return for products produced by that equipment.This arrangement is known as ________.

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

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