Exam 11: Selecting and Managing Entry Modes

Briefly explain the different types of countertrade.

The ________ payment method is commonly used when there is an ongoing relationship between the two parties.

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 unsolicited 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 new business development,is exploring how Gro-Tru might meet the needs of the potential market. -If Gro-Tru exchanges its products directly for other goods or services without the use of money,it would be conducting which of the following?

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

________ occurs when companies employ licensing agreements to swap intangible property with one another.

Using a distributor reduces an exporter's risk.

Which of the following is NOT true of countertrade?

________ is a company that provides services to indirect exporters in addition to those activities directly related to clients' exporting activities.

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

Letters of credit are popular among traders because most of the risks are assumed by ________.

Describe briefly the contractual entry modes companies can use for international expansion,listing the advantages and disadvantages of each.

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

Which of the following allows the bank issuing a letter of credit to modify the terms of the letter only after obtaining the approval of both exporter and importer?

________ is a specialist in such export-related activities as customs clearing,tariff schedules,and shipping and insurance fees.

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.The company is proposing which of the following?

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

Scenario: Sports Stuff,Inc. Herb Graham is vice president of Sports Stuff,a business that develops,manufactures,and markets sports memorabilia.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. -If Sports Stuff hires a company to design,construct,and test a production facility on its behalf,the company would be participating in which of the following?

Discuss the steps companies can take to avoid export and import blunders,and explain why an advance payment method can help exporters reduce financial risk.

A form of countertrade that usually typifies long-term relationships between the companies involved is called ________.

Explain how small exporters increase the probability of getting paid for a shipment.