Deck 15: International Small Business

Question 1

The size of a business is not a barrier to entry into international markets; it only limits the number of markets you can serve.

Answer 1

True

Question 2

Using licensing,a small business owner can enter a foreign market quickly with virtually no capital.

Answer 2

True

Question 3

Of all the ways to conduct business internationally,exporting provides the lowest level of risk and investment.

Answer 3

True

Question 4

Japan,Germany,and the United Kingdom top the list of importers of products made in the United States.

Question 5

As seen in the chapter opener,Lonely Planet was started with the intent of writing a travel guide for every inhabited country on the planet.

Question 6

After exporting,the next level of commitment in international business is licensing.

Question 7

The vast majority of small business activity in the international market is conducted via importing and exporting.

Question 8

A foreign licensing agreement is a partnership between two businesses in different countries.

Question 9

A disadvantage of exporting is waiting longer for payments than would occur if dealing with local markets.

Question 10

In France,working an 80-hour work week is highly undesirable,whereas it is typical in the United States.

Question 11

In an international business plan,analysis becomes more critical than information.

Question 12

A disadvantage of exporting is reduced dependence by the small business owner on existing markets.

Question 13

A problem for many small businesses when trading internationally is getting paid for the product or service that is delivered.

Question 14

Opening a factory or a store in another country is the highest level of commitment a small business owner can make to international business.

Question 15

For small businesses,the largest trading partners of the United States are the best countries to focus on when exporting products.

Question 16

Joint ventures are often huge successes with profits in the millions of dollars.

Question 17

No business is too small to compete in the global market.

Question 18

The same competitive advantages that have made small businesses successful in local markets can make those same businesses successful in foreign markets.

Question 19

The simplest and most cost-effective way for a small business to export is to hire an export service company.

Question 20

The size of a business does not determine its ability to enter global markets,nor does it influence the number and scale of markets a business can enter.

Question 21

According to the tip-of-the-iceberg concept,only 10 to 15 percent of a region's culture is visible.

Question 22

There is a proper protocol in Japan and South Korea for presenting a business card.

Question 23

Products will qualify under NAFTA only if the products originate in the United States,Mexico,or Canada.

Question 24

Which of the following is a valid supply chain consideration in establishing a competitive advantage in international business?

A) Finding the right distributor
B) Finding the right customer
C) Finding the right oversees manager
D) Finding the right venture

Question 25

The same ____ that makes a business successful in local markets may create an advantage in foreign markets.

A) Product
B) Advertising campaign
C) Low price
D) Competitive advantage

Question 26

All cultures have norms and ways of doing business that are the same.

Question 27

Of all the firms that export,______ percent are small businesses.

A) 52
B) 67
C) 84
D) 97

Question 28

Since the Korean War,a major development in the world economy has been the creation of regional trade associations.

Question 29

Which of the following businesses,based upon size,has an advantage when looking to enter international markets?

A) Small businesses
B) Medium-sized businesses
C) Large businesses
D) Size is not a barrier to entry

Question 30

A type of trading known as bartering is a recently developed idea to enable international trade to be conducted more efficiently.

Question 31

According to the "good reason" test,if ____ is not part of a business's core business strategy,the company should not bother going international.

A) Importing
B) Manufacturing
C) Exporting
D) Providing services

Question 32

Behind most successful businesses is a

A) Large cash flow
B) Large advertising budget
C) Good business plan
D) Large number of management personnel

Question 33

The first global tariff agreement began in 1955 with the inception of the World Bank.

Question 34

Approximately 45 percent of Export-Import Bank transactions impact small businesses.

Question 35

About what percent of American exporters have fewer than 100 employees?

A) 10
B) 15
C) 30
D) 60

Question 36

The most important cultural factors to be considered when conducting business overseas include language,religion,education,and social systems.

Question 37

One of the provisions of the latest round of negotiations of GATT was to create its successor,the World Exchange Organization.

Question 38

A small business owner should try to conduct business in the buyer's language as a sign of good faith.

Question 39

The use of consignment selling is commonly used in the United States; however,using this method of financing is extremely risky in international sales.

Question 40

Switzerland is a member state of the European Union.

Question 41

All but which of the following are disadvantages of exporting?

A) Development of new promotional materials
B) Necessity for additional financing
C) Increased market accessibility
D) Additional administrative expenses

Question 42

Selling goods or services in a foreign country is known as

A) Exporting
B) Importing
C) Outsourcing
D) Replacement selling

Question 43

The two biggest advantages of licensing are

A) Speed of entry and cost
B) Cost and profit potential
C) Speed of entry and profit potential
D) Profit potential and advertising agreements

Question 44

A partnership between two businesses (often in different countries)that is more informal than a joint venture is known as a/an

A) International licensing
B) Importing
C) Direct investment
D) Strategic alliance

Question 45

In the Chapter 15 Entrepreneurial Snapshot,what is the mission of Lonely Planet,which has not changed in its 30 years of existence?

A) When you absolutely,positively have to be there overnight
B) Lonely places are the best places
C) Get unique information to travelers as quickly and accurately as possible
D) Travel is good business

Question 46

A licenser is contractually obligated to another business for a ____.

A) Certain percentage of profits
B) Certain amount of advertising
C) Certain time period
D) Certain gross profit margin

Question 47

All but which of the following are advantages of exporting?

A) Increased total sales and profits
B) Reduced dependence on existing markets
C) Enhanced domestic competitiveness
D) Modification of product packaging

Question 48

Increased total sales and profits,reduced dependence on existing markets and enhanced domestic competitiveness are all advantages of which of the following?

A) Joint ventures
B) Exporting
C) Importing
D) Licensing

Question 49

The success rate for joint ventures is

A) About one-tenth
B) About one-third
C) About one-half
D) About two-thirds

Question 50

Wally's Widgets,a U.S.based company,has decided to sell its products in Canada and Mexico later this year.Based on this information,Wally's will be engaging in which level of international business?

A) Importing
B) Exporting
C) Licensing
D) Joint venture

Question 51

The most common way for small businesses to operate in other countries is through

A) Exporting
B) Importing
C) Outsourcing
D) Joint ventures

Question 52

In the Chapter 15 Entrepreneurial Snapshot,why did the Wheelers start Lonely Planet?

A) To get good deals for themselves on travel
B) Because they both were fired at the same time
C) Because so many people asked how they traveled so cheaply
D) Because their $150 Austin minivan broke down

Question 53

A match between a large,well-established company abroad that is in need of fresh ideas and products,which small business can often supply,is known as which of the following?

A) International licensing
B) A joint venture
C) A direct investment
D) A strategic alliance

Question 54

Gwen's Global Works Inc.is looking to form a short-term partnership with an IT company in India to develop a new human resource management database.Gwen's Global Works should enter into which type of international agreement?

A) Export agreement
B) Licensing agreement
C) Joint venture
D) Import agreement

Question 55

An agreement in which two businesses form a temporary partnership to produce a product or to service a market that neither could satisfy alone is known as which of the following?

A) International licensing
B) A joint venture
C) A direct investment
D) A strategic alliance

Question 56

An international business plan should include both market entrance and market exit approaches because

A) A business owner should be prepared for failure
B) A business owner should be prepared for governmental instability in foreign markets
C) Some markets may be hard to leave and may drain export profits
D) Some markets may be hard to enter and may drain profits before they are received

Question 57

Stock Supply Systems Inc.is looking to form an informal partnership with a mining company in Vietnam in order to obtain cheaper raw materials for a long-term project.Stock Supply Systems should enter into which type of international agreement?

A) Export agreement
B) Licensing agreement
C) Joint venture
D) Strategic alliance

Question 58

Foregoing short-term profits in the interest of long-term gain,allocating funds for travel,modifications of product and/or packaging,and additional financing are all disadvantages of

A) Joint ventures
B) Exporting
C) Importing
D) Licensing

Question 59

The agreement that allows one business to sell the rights to use a business process or product to another business in a foreign country is known as

A) International licensing
B) Joint ventures
C) Direct investment
D) Strategic alliances

Question 60

Which of the following was NOT one of the questions cited in the Global Test?

A) Do you pass the "good reason" test?
B) Are you ready to run a much different type of company?
C) Do you like politics?
D) Can you find a good distributor?

Question 61

The simplest and most cost-effective method for a small business to use in exporting is to

A) Use an intermediary
B) Use direct export
C) Use a distributor
D) Use a sales representative

Question 62

The top trading partner for the United States is

A) Canada
B) China
C) Mexico
D) Japan

Question 63

All but which of the following are choices when using direct exporting?

A) Sales representatives
B) Distributors
C) Agents or brokers
D) Sell directly to the consumer

Question 64

The major disadvantage of using an intermediary is which of the following?

A) Increased sales
B) Increased access to foreign markets
C) The fees charged by the intermediary
D) An increase in control over how the product is handled in the foreign market

Question 65

An intermediary who is already based in the foreign country and who can provide the advantage of knowledge of the local culture is known as

A) Agent or broker
B) Export Management Company
C) Foreign-based distributor or agent
D) Piggyback exporter

Question 66

The major distinction between indirect and direct exporting is which of the following?

A) Use of intermediaries
B) Expense
C) Laws and regulations
D) Use of technology

Question 67

Tanney's Trade Company buys and sells exported goods while taking title to all merchandise in its possession.The company pays the seller directly for these goods.Tanney's is an example of what type of company?

A) Piggyback export company
B) Export Management Association
C) Export trade company
D) Foreign-based distributor

Question 68

A small business owner who must choose the target country,arrange the most efficient channel of distribution,and market the product is using which of the following?

A) Direct exporting
B) Export Management Companies
C) Foreign-based distributors or agents
D) Piggyback exporting

Question 69

An intermediary who is already exporting may let a small business owner take advantage of the international connections they have already established.This is known as

A) Brokering
B) Export management
C) Export trading
D) Piggyback exporting

Question 70

Foreign affiliates of the U.S.Chamber of Commerce are called:

A) AmChams
B) SITC
C) HS
D) FCofC

Question 71

Which of the following is an independent federal agency with a program that covers 100 percent of working capital for a commercial loan for financing international business activities of small businesses?

A) The Export-Import Bank
B) The SBA
C) The National Association of Credit Management
D) The World Bank

Question 72

All but which of the following countries are the top importers of products from the United States?

A) Canada
B) Japan
C) Mexico
D) Germany

Question 73

A ____ draft is a document that requires the buyer to pay the seller the face amount as soon as the product arrives.

A) Time
B) Sight
C) Cash
D) Credit

Question 74

In the United States,the average number of days needed to collect accounts receivable is

A) 21
B) 42
C) 68
D) 112

Question 75

How many days can you expect to wait for payment from customers from Greece,Albania,and Lithuania?

A) 15
B) 42
C) 120
D) 240

Question 76

Intermediaries who provide a full range of services such as conducting marketing research,arranging financing,and acting as the export department for small companies but do not take title to the goods or services are called which of the following?

A) Agents and brokers
B) Export Management Companies
C) Export Trade Companies
D) Piggyback exporters

Question 77

Intermediaries who provide a full range of services and actually take title of the goods and pay the small business owner are called

A) Agents and brokers
B) Export Management Companies
C) Export Trade Companies
D) Piggyback exporters

Question 78

If a small business is importing as opposed to exporting,the major focus of activities shifts from supplying the product to

A) Producing the product
B) Finding an appropriate source of the product
C) Marketing the product
D) Delivering the product

Question 79

Intermediaries who set up deals with foreign buyers but do not buy the product from the small business owner are called

A) Agents and brokers
B) Export Management Companies
C) Export Trade Companies
D) Piggyback exporters

Question 80

The advantages of more control over the exporting process,greater profit potential,and direct contact with customers arises with which of the following?

A) Direct exporting
B) Export Management Companies
C) Foreign-based distributors or agents
D) Piggyback exporting