Deck 12: Analyzing International Opportunities

Question 1

Scenario: Chong's Analysis of International Markets
John Chong is an inexperienced entrepreneur in global business. He wants to sell his product, Zulu doll, a toy for kids below the age of eight, in every corner of the world. He wants to examine all potential markets but wants to keep his costs low. John has asked you to explain a few things about analyzing international markets.
When screening a potential market,which of the following would you advise John to do first?

A) assess the national business environment
B) select the market
C) identify basic appeal for markets
D) measure market potential

Answer 1

C

Question 2

Which of the following is most likely to be caused by poor fiscal and monetary policies of a nation's central bank?

A) increasing levels of productivity
B) decreasing budget deficits
C) appreciating currency
D) high rates of inflation

Answer 2

D

Question 3

________ refers to the continuous monitoring of events in other locations keeps managers aware of potential business opportunities and threats.

A) Operations research
B) Logistics
C) Warehousing
D) Environmental scanning

Answer 3

D

Question 4

Which of the following steps of the market screening process involves the analysis of the quality of workforce,materials,and infrastructure?

A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site

Question 5

The first step in the screening process for potential markets and sites is to ________.

A) select a favorable market or site
B) measure the market or site potential
C) identify the basic appeal of a market
D) assess the national business environment

Question 6

Scenario: Chong's Analysis of International Markets
John Chong is an inexperienced entrepreneur in global business. He wants to sell his product, Zulu doll, a toy for kids below the age of eight, in every corner of the world. He wants to examine all potential markets but wants to keep his costs low. John has asked you to explain a few things about analyzing international markets.
Which step of the market-screening process involves determining the income elasticity of the Zulu doll?

A) select the market or site
B) assessment of the national business environment
C) identification of the basic appeal for markets
D) measure market or site potential

Question 7

Which of the following is not one of the three steps in increasing market share,revenue,and profits?

A) assess alternative markets
B) evaluate respective costs, benefits, and risks
C) perform a situation analysis
D) select market with most potential for entry or expansion

Question 8

Which of the following steps of the screening process for potential markets involves the evaluation of fiscal and monetary policies of a nation?

A) identification of basic appeal of a market
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site

Question 9

Which of the following steps of the market screening process examines the effects of country image on market-entry decisions?

A) identification of basic appeal of a market
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site

Question 10

Which of the following is a characteristic of foreign direct investment?

A) relatively low financial investment
B) low exposure to political risk
C) high profit potential
D) simple management

Question 11

Which of the following is a characteristic of foreign direct investment?

A) relatively low financial investment
B) low exposure to political risk
C) high profit potential
D) simple management

Question 12

A type of risk faced by businesses that decisions made by the government,events,or conditions will significantly affect the profitability of a business is known as ________.

A) volatility risk
B) systemic risk
C) political risk
D) credit risk

Question 13

Which of the following steps of the market screening process involves examining the cost of transporting goods?

A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site

Question 14

________ is the most common form of international business activity.

A) Exporting
B) Licensing
C) Greenfield strategy
D) Management contract

Question 15

The first step in identifying potential markets is to assess the basic demand for a product.

Question 16

Scenario: Chong's Analysis of International Markets
John Chong is an inexperienced entrepreneur in global business. He wants to sell his product, Zulu doll, a toy for kids below the age of eight, in every corner of the world. He wants to examine all potential markets but wants to keep his costs low. John has asked you to explain a few things about analyzing international markets.
Which stage of the market-screening process is John involved in,while examining government regulations and bureaucracy in a market?

A) assessment of the national business environment
B) selection of the market
C) identification of the basic appeal for markets
D) measurement of market potential

Question 17

The key element of political risk of greatest concern for global companies is ________.

A) the cost of transporting materials and goods
B) government regulation, government bureaucracy, and political stability
C) currency and liquidity problems
D) letting past political events blind future opportunities

Question 18

Which of the following statements is true about country image and its effects on global companies?

A) It embodies all important facets of a nation's business environment.
B) If a country's image is positive in one product class, it tends to be positive in all other product classes as well.
C) An image, once formed, seldom changes over time.
D) Products made in emerging countries are evaluated more positively than products made in developed countries.

Question 19

Which of the following is a characteristic of exporting?

A) high financial exposure
B) rapid market entry
C) logistical simplicity
D) local market knowledge

Question 20

Countries differ significantly in their cultures,politics,laws,and economies.International managers must work to understand these differences and to incorporate their understanding into market- and site-selection decisions.Which of the following steps of the market screening process involves an evaluation of the government bureaucracy?

A) identification of basic appeal of a market
B) assessment of the national business environment
C) measurement of market or site potential
D) selection of the market or site

Question 21

Products made in emerging countries tend to be evaluated more positively than those from relatively more developed countries.

Question 22

If the income-elasticity coefficient for coffee is 0.5,the demand for coffee will ________.

A) decrease 0.5 percent for every 1.0 percent increase in income
B) increase 1.0 percent for every 5.0 percent increase in income
C) increase 0.5 percent for every 1.0 percent increase in income
D) decrease 0.5 percent for every 0.5 percent increase in income

Question 23

Companies usually modify or adapt elements of their marketing plan to be used in different markets in which they sell their products.

Question 24

Stable currency values make it easier for firms to predict future earnings accurately in terms of the home-country currency.

Question 25

Governments bar international companies from entering economic sectors like energy exploration for security reasons.

Question 26

Consumer products such as toothpaste and soft drinks undergo extensive adaptation to suit local preferences.

Question 27

A country's climate plays an important role in determining the basic demand for a company's product.

Question 28

A typical industry analysis does not include the ________.

A) names, production volumes, and market shares of the largest competitors
B) structure of the wholesale and retail distribution networks
C) background on the market, including population figures and key social trends
D) history of currency fluctuations

Question 29

In the context of the sensitivity of demand for a product relative to changes in income,a coefficient greater than 1.0 conveys a(n)________.

A) surplus product
B) economic equilibrium
C) economic surplus
D) income-elastic product

Question 30

Briefly discuss the important political and legal forces that should be analyzed in the market/site screening process.

Question 31

The sensitivity of demand for a product relative to changes in income is called ________.

A) income elasticity
B) demand shaping
C) income distribution
D) market intensity

Question 32

Cultural elements do not have any influence what kinds of products are sold and how they are sold in a country.

Question 33

Companies that require particular resources to carry out local business activities must be sure they are available.

Question 34

What is country image? Explain how it affects the screening process using examples.

Question 35

Which of the following steps of the market screening process involves the determination of a product's income elasticity?

A) identification of basic appeal of a product
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site

Question 36

Discuss how companies identify the basic appeal for products when screening a potential market,and explain how international organizations provide the essential information to researchers.

Question 37

Discuss the importance of cultural factors when assessing a national business environment,and explain why cultural differences between markets create difficulties when conducting international research.

Question 38

Which of the following is the final step in the screening process for potential markets and sites?

A) assessment of the national business environment
B) measurement of market or site potential
C) selection of the market or site
D) assessment of climate suitability

Question 39

Which of the following steps should occur in the screening process for potential markets after the basic demand for a product has been identified?

A) assessment of the national business environment
B) selection of the market or site
C) measurement of the market or site potential
D) assessment of climate suitability

Question 40

Government regulations can quickly eliminate a market or site from further consideration.

Question 41

Food and utilities are examples of income-inelastic products.

Question 42

Issues regarding potential threat from substitute products in a market are addressed in ________.

A) security analysis
B) technical analysis
C) product fit analysis
D) competitor analysis

Question 43

While assessing the market potential of emerging markets,market consumption capacity is generally obtained through estimates of energy consumption.

Question 44

Which of the following stages of the market or site screening process involves an assessment of potential threat from substitute products?

A) identification of basic appeal of a product
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site

Question 45

When developing a market-potential indicator for an emerging market,market growth rate is typically estimated from the ________.

A) per capita private consumption
B) GDP
C) total population
D) percentage of a market's population in the middle class

Question 46

When creating a market-potential indicator for an emerging market,market consumption capacity is often estimated from the ________.

A) growth in gross domestic product
B) percentage of a market's population in the middle class
C) gross domestic product at purchasing power parity
D) amount of energy the total population produces

Question 47

Which of the following stages of the market or site screening process involves competitor analysis?

A) identification of basic appeal of a product
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site

Question 48

During which stage of the market or site screening process do managers normally want to visit locations?

A) identification of basic appeal of a product
B) measurement of market or site potential
C) assessment of the national business environment
D) selection of the market or site

Question 49

Assessing potential in emerging markets by ranking locations using market-potential indicators is useful only for companies involved in exporting.

Question 50

When creating a market-potential indicator for an emerging market,an estimate of the wealth or buying power of a market can be formed by examining the ________.

A) market intensity
B) market growth rate
C) market size
D) market receptivity

Question 51

Which of the following variables attempts to estimate market openness when creating a market-potential indicator for an emerging market?

A) market consumption capacity
B) market receptivity
C) market size
D) market intensity

Question 52

A product's income-elasticity refers to the sensitivity of the demand of a product relative to changes in the income of consumer population.

Question 53

Scenario: Chong's Analysis of International Markets
John Chong is an inexperienced entrepreneur in global business. He wants to sell his product, Zulu doll, a toy for kids below the age of eight, in every corner of the world. He wants to examine all potential markets but wants to keep his costs low. John has asked you to explain a few things about analyzing international markets.
Which of the following stages of the market-screening process would require John to visit a potential market personally?

A) assessment of the national business environment
B) selection of the market
C) identification of the basic appeal for markets
D) measurement of market potential

Question 54

When creating a market-potential indicator for an emerging market,________ is estimated by determining a nation's volume of international trade as a percentage of GDP.

A) market receptivity
B) market intensity
C) market consumption capacity
D) market size

Question 55

When developing a market-potential indicator for an emerging market,the ________ factor attempts to assess channels of distribution and communication.

A) market size
B) market intensity
C) commercial infrastructure
D) economic freedom

Question 56

Which of the following is an example of a legal force that is used to assess the national business environment?

A) resource quality
B) environmental regulations
C) workforce qualifications
D) liquidity issues

Question 57

When developing a market-potential indicator for an emerging market,market intensity is typically estimated from the ________.

A) per capita private consumption
B) GDP
C) total population
D) percentage of a market's population in the middle class

Question 58

Which of the following is an income-elastic product?

A) food
B) utilities
C) jewelry
D) beverages

Question 59

When developing a market-potential indicator for an emerging market,the size of the market is typically estimated from the nation's ________.

A) income elasticity
B) GDP
C) total population
D) GDP at purchasing power parity

Question 60

A product for which demand increases more relative to an increase in income has an income-elasticity coefficient less than 1.

Question 61

A(n)________ is an international trip by government officials and businesspeople that is organized by agencies of national or provincial governments for the purpose of exploring international business opportunities.

A) focus group
B) field research
C) expo
D) trade mission

Question 62

The process of obtaining information that already exists within the company or that can be obtained from outside sources is called secondary market research.

Question 63

Scenario: Markowitz Tools
Susan Markowitz is analyzing potential markets where Markowitz Tools can sell its products, and she has narrowed her search to three markets. Country A is a developing country with a low literacy rate, Country B has a group-oriented culture, and Country C is a highly developed nation.
Which of the following would be the least expensive method in terms of both time and money,for conducting a market research in Country C?

A) structured interviews
B) surveys
C) data from the Internet
D) focus groups

Question 64

In countries with high illiteracy rates,a(n)________ should not be used to collect information.

A) personal interview
B) written survey
C) focus group
D) field research

Question 65

________ is relatively inexpensive because it has already been collected,analyzed,and summarized by another party.

A) Primary data
B) Secondary data
C) Raw data
D) Transaction data

Question 66

Scenario: Indy Bats LLC
Indy Bats LLC is looking for new markets for its products. Matt Johnson has been appointed head of a special team that has been given the responsibility of identifying new markets for the company's products. The company is especially interested in exploring emerging economies.
If Matt wants to estimate an emerging market's spending capacity,he should focus on the ________.

A) population in the middle class
B) need for consumer products
C) demand for consumer and industrial products
D) volume of imports

Question 67

An ongoing process of gathering,analyzing,and dispensing information for tactical or strategic purposes is called ________.

A) data harvesting
B) peer production
C) survey research
D) environmental scanning

Question 68

Scenario: Markowitz Tools
Susan Markowitz is analyzing potential markets where Markowitz Tools can sell its products, and she has narrowed her search to three markets. Country A is a developing country with a low literacy rate, Country B has a group-oriented culture, and Country C is a highly developed nation.
Which of the following would be most appropriate for conducting primary market research on attitudes,behaviors,and purchasing habits in Country B?

A) Internet-based research
B) focus groups
C) consumer panels
D) data from trade agencies

Question 69

Scenario: Indy Bats LLC
Indy Bats LLC is looking for new markets for its products. Matt Johnson has been appointed head of a special team that has been given the responsibility of identifying new markets for the company's products. The company is especially interested in exploring emerging economies.
For several emerging markets,Matt has collected data on the number of telephones,TVs,and fax machines per capita,and population per retail outlet,which assesses the ________.

A) economic freedom
B) commercial infrastructure
C) market growth rate
D) market size

Question 70

An exhibition at which members of an industry showcase their latest products,study activities of rivals,and examine recent trends and opportunities is called a(n)________.

A) focus group
B) trade show
C) environmental survey
D) field research

Question 71

The process of obtaining information that already exists within the company or that can be obtained from outside sources is called ________.

A) secondary market research
B) data mining
C) data harvesting
D) scientific data archiving

Question 72

Scenario: Chong's Analysis of International Markets
John Chong is an inexperienced entrepreneur in global business. He wants to sell his product, Zulu doll, a toy for kids below the age of eight, in every corner of the world. He wants to examine all potential markets but wants to keep his costs low. John has asked you to explain a few things about analyzing international markets.
The income-elasticity coefficient for Zulu doll is 1.2,which means the demand for Zulu doll will ________.

A) increase 1.2 percent for every 1.0 percent increase in income
B) decrease 1.0 percent for every 1.2 percent increase in income
C) decrease 1.2 percent for every 1.0 percent increase in income
D) remain stagnant since 1.2 is the equilibrium value

Question 73

Which of the following is a source of secondary data for conducting international market research?

A) surveys
B) interviews
C) focus groups
D) trade associations

Question 74

The annual income considered below the poverty line in one country is the annual income of a middle-class family in another country.Which of the following difficulties associated with conducting international market research does this scenario illustrate?

A) availability of data
B) protection of data
C) marketability of data
D) comparability of data

Question 75

The process of collecting and analyzing original data and applying the results to current research needs is called ________.

A) primary market research
B) secondary market research
C) data harvesting
D) data mining

Question 76

Some researches consist of errors due to misinterpretations by foreign language interpreters.Which of the following difficulties associated with conducting international market research does this example signify?

A) protection of data
B) availability of data
C) cultural differences
D) political differences

Question 77

Small and medium-sized companies often find trade missions very appealing because ________.

A) it gives companies an opportunity to visit new places
B) such trips are usually cheap even for the smallest of businesses
C) it provides access to important business officials and executives
D) it helps companies analyze the strategies of all major competitors

Question 78

Scenario: Markowitz Tools
Susan Markowitz is analyzing potential markets where Markowitz Tools can sell its products, and she has narrowed her search to three markets. Country A is a developing country with a low literacy rate, Country B has a group-oriented culture, and Country C is a highly developed nation.
If Susan wants to obtain information in the least expensive way,she should use ________.

A) secondary market research
B) consumer panels
C) structured interviews
D) large focus groups followed by surveys

Question 79

The potential to conduct written surveys is independent of the literacy rates among the local population.

Question 80

Scenario: Indy Bats LLC
Indy Bats LLC is looking for new markets for its products. Matt Johnson has been appointed head of a special team that has been given the responsibility of identifying new markets for the company's products. The company is especially interested in exploring emerging economies.
If Matt wants to estimate the extent to which free-market principles predominate in an emerging market,Matt should consider the variable called ________.

A) economic freedom
B) commercial infrastructure
C) market receptivity
D) market intensity