Deck 5: Identifying and Analyzing Domestic and International Opportunities

Question 1

An opportunity assessment plan has four sections-two major sections and two minor sections. 

Answer 1

True

Question 2

Only the pricing element in the business strategy of an international entrepreneur has the potential to be affected by the multiplicity of legal environments. 

Answer 2

False

Question 3

The Small Business Association provides Business Development Centers but also has a Women's Business Center and a Minority Business Center.

Answer 3

True

Question 4

International entrepreneurial decisions are more complex than domestic decisions due to uncontrollable factors such as economic development and stage of economic development. 

Question 5

The laws governing business arrangements have been standardized over 150 international legal systems. 

Question 6

Transfer risk is the risk in attempting to shift assets or other funds out of the country. 

Question 7

Contract law varies significantly from country to country,in part reflecting the two types of legal tradition-commercial law and civil law. 

Question 8

Entrepreneurs doing business in the former U.S.S.R.should be aware that barter,or third-party arrangements,are commonplace. 

Question 9

Nonverbal or hidden language of a culture accounts for a small percentage of all understood communication. 

Question 10

SCORE is a for-profit organization that provides online and in-person assistance in about 100 locations throughout the United States. 

Question 11

Gartner provides information on technology markets. 

Question 12

The key to successful entrepreneurship is to develop an idea that has a large,reachable market.

Question 13

If the legal system of the country the global entrepreneur is dealing with does not have a good track record,it is not possible for the contract to contain any agreement that contract disputes will be heard in the courts of a different country or home country. 

Question 14

For a global entrepreneur,technological environment variations are minimal since firms produce mostly standardized,relatively uniform products that can be sorted to meet industry standards. 

Question 15

Useful government sources of information include Business Source Complete and Mergent. 

Question 16

Three major types of political risks that might be present are operating risk,transfer risk,and ownership risk. 

Question 17

Culture encompasses a wide variety of elements,including language,social structure,religion,political philosophy,economic philosophy,education,and manners and customs. 

Question 18

The Euromonitor provides very industry-specific information on companies in the European Union. 

Question 19

An opportunity assessment plan is basically the same thing as a business plan.

Question 20

International entrepreneurship is the process of an entrepreneur conducting business activities across national boundaries. 

Question 21

An opportunity assessment plan: 

A) is the same thing as a business plan.
B) is longer than a business plan.
C) has a comprehensive financial statement.
D) focuses on the opportunity, not the venture.

Question 22

A nonequity arrangement is a method by which an entrepreneur can enter a market and obtain sales and profits without direct equity investment in the foreign market. 

Question 23

When researching foreign markets,the entrepreneur will usually want data such as population,GDP,per capita income,inflation rate,literacy rate,unemployment,and education levels. 

Question 24

For a U.S.-based entrepreneurial firm,the 75 percent of the world's population living outside the United States offers a very large market opportunity. 

Question 25

A product extension merger occurs when acquiring and acquired companies have related production and/or distribution activities but do not have products that compete directly with each other. 

Question 26

A disadvantage of using licensing as an entry strategy for a foreign market is the high amount of risk involved. 

Question 27

The General Agreement on Tariffs and Trade is an attempt to impose significant tariffs on business between nations. 

Question 28

All of the following statements concerning opportunity assessment plans are correct except: 

A) the first major section of the opportunity assessment plan develops a time line indicating what steps need to be take to successfully launch the venture.
B) an opportunity assessment plan is not a business plan.
C) the second major section of the opportunity assessment plan focuses on the market.
D) an opportunity assessment plan has four sections-two major sections and two minor sections.

Question 29

In selecting a foreign market,two critical issues for the entrepreneur are foreign market selection and market entry strategy.

Question 30

Reference groups in any culture provide values and attitudes that influence behavior. 

Question 31

Gifts related to business proceedings are illegal in most other countries and should not be offered to foreign business partners. 

Question 32

________ is a nonprofit organization that provides free online and in-person assistance to entrepreneurs in the form of training,consulting and mentoring provided mainly by retired executives and entrepreneurs. 

A) CSBC
B) NAICS
C) SCORE
D) SIC

Question 33

The objectives of the General Agreement on Tariffs and Trade was to liberalize trade by eliminating or reducing tariffs. 

Question 34

Nonequity arrangements discussed by the text include licensing,management projects and exporting. 

Question 35

________ provides information on industries such as aerospace,energy,healthcare and defense. 

A) Mergent
B) Plunkett
C) Frost and Sullivan
D) Business Source Complete

Question 36

There are three general classifications for exporting; direct,indirect and third-party. 

Question 37

________ are both government sources of information that might be helpful in gathering the information needed to start a business. 

A) Mergent and The Industrial monitor
B) NAICS and SIC codes
C) Business Source Complete and Small Business News
D) The Euromonitor and Business Source Complete

Question 38

Profits and tax benefits are common motivations for going global. 

Question 39

A vertical merger is the combination of two firms that produce one or more of the same or closely related products in the same geographical area. 

Question 40

The North American Free Trade Agreement (NAFTA)increases trade barriers and quotas among the United States,Canada,and Mexico. 

Question 41

________ is the process of an entrepreneur conducting business activities across national borders. 

A) Intrapreneurship
B) International entrepreneurship
C) Domestic entrepreneurship
D) Direct importing

Question 42

Motivations for going global,discussed in the text,include all the following except: 

A) cheap shipping costs
B) excess production capacity
C) technological advantage
D) competitive pressures

Question 43

In Kenya,the tribe where an individual is from can play a significant role in employer relations.This best exemplifies which aspect of culture

A) Social structure
B) Education
C) Political philosophy
D) Economic philosophy

Question 44

Which among the following influences whether customers are able to use the good or service properly and whether they are able to understand the firm's advertising or other promotional messages  

A) Political philosophy
B) Religion
C) Manners and customs
D) Education

Question 45

Exporting: 

A) is the least popular method for going global.
B) results in a lack of control over quality.
C) results in an inability to realize location economies.
D) can be direct or indirect.

Question 46

All of the following are government sources of information except: 

A) census reports
B) export/import authority
C) NAICS and SIC
D) Hoovers

Question 47

What term describes the practice of paying for goods indirectly through another source  

A) Licensing
B) Barter
C) Promotion
D) Exporting

Question 48

A turn-key project is best defined as: 

A) a method of doing business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners
B) giving a foreign manufacturer the right to use a patent in return for the payment of a royalty
C) a method in which an entrepreneur contracts his or her management techniques and skills to a (foreign) purchasing company
D) a form of direct foreign investment in which the investing entrepreneur holds a minority ownership position in the foreign venture

Question 49

________ has the main disadvantages of high transportation costs,trade barriers,and problems with local marketing agents. 

A) Exporting
B) Turn-key projects
C) Licensing
D) Franchising

Question 50

________ is defined as the risk of interference with the operations of the venture. 

A) Transfer risk
B) Ownership risk
C) Investment risk
D) Operating risk

Question 51

A country's ________ is the difference between the value of a country's imports and exports over time. 

A) gross national product
B) purchasing power parity
C) current account
D) foreign exchange reserve

Question 52

A ________ is the joining of two firms in order to form a third company in which the equity is shared. 

A) majority interest
B) joint venture
C) product extension merger
D) minority interest

Question 53

McDonalds has learned to adapt its restaurants to local design preferences and the U.S.government tries to design their local embassies with local architectural considerations.These are examples of which aspect of culture

A) Social structure
B) Political philosophy
C) Aesthetics
D) Manners and customs

Question 54

Primary data is: 

A) data that has been collected by the private sector.
B) data collected by the government.
C) original information collected by the entrepreneur.
D) data that is hard to find.

Question 55

Which of the following statements is true  

A) Most countries have laws and court procedures protecting intellectual property such as those in the United States.
B) Civil laws tend to be relatively nonspecific.
C) Laws of a country regulate the manner in which business transactions are executed.
D) Global entrepreneurs cannot specify in the contract that any contract disputes will be heard in the courts of another country.

Question 56

Licensing is best described as: 

A) a nonequity method of international business in which an entrepreneur contracts his or her management techniques and skills to a (foreign) purchasing company.
B) a method of doing international business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners.
C) a method that involves giving a foreign manufacturer the right to use a patent, technology, production process, or product in return for the payment of a royalty.
D) an equity partnership that involves selling patents to foreign governments.

Question 57

Which of the following statements is not true  

A) Technology, like social factors, varies significantly across countries.
B) Major events often are the beginning of slow shifts in public opinion or buying habits.
C) Cultural ethics deals with the values and morals of a society and how they translate to societal acceptance.
D) Psychographics exist within demographics.

Question 58

Concerns regarding roads,electricity,banking facilities,communication,and educational systems have to do with a country's: 

A) infrastructure.
B) balance of payments.
C) political climate.
D) economics.

Question 59

________ is not considered a nonequity arrangement. 

A) Turn-key projects
B) Exporting
C) Licensing
D) Management contracts

Question 60

Which among the following political risks is considered the biggest risk of all  

A) Transfer risk
B) Ownership risk
C) Investment risk
D) Operating risk

Question 61

Explain the major factors an entrepreneur needs to consider in choosing the best distribution channel in a foreign country. 

Question 62

According to the text,the most prevalent reason for mergers is: 

A) taxation.
B) economies of scale.
C) currency fluctuations.
D) to combine complementary resources.

Question 63

Identify and briefly describe the four sections of an opportunity assessment plan. 

Question 64

List the seven various aspects of culture. 

Question 65

List five of the nine major reasons why an entrepreneur would go global
 

Question 66

McDonald's acquiring its store franchises is an example of what type of merger  

A) Market extension merger
B) Horizontal merger
C) Product extension merger
D) Vertical merger

Question 67

Philip Morris acquiring Miller Brewing is an example of what type of merger  

A) Market extension merger
B) Horizontal merger
C) Product extension merger
D) Vertical merger

Question 68

The North American Free Trade Agreement (NAFTA)is between which of the following countries  

A) The United States, Brazil, and Canada
B) The United States, Mexico, and Brazil
C) The United States, Argentina, and Brazil
D) The United States, Canada, and Mexico

Question 69

Explain what the differences are between a business plan and an opportunity assessment plan. 

Question 70

What is a nonequity arrangement
Define the two major types of nonequity arrangements: licensing and turn-key projects,and give at least one advantage and disadvantage for each.

Question 71

________ is a type of merger in which acquiring and acquired companies have related production and/or distribution activities but do not have products that compete directly with each other. 

A) Market extension merger
B) Horizontal merger
C) Product extension merger
D) Vertical merger

Question 72

All of the following is true of the General Agreement on Tariffs and Trade except: 

A) it includes over 100 nations.
B) it reduces tariffs, subsidies, and import quotas.
C) it has extensive authority to enforce trade practices due to its voluntary membership.
D) it is one of the longest-lasting agreements on trade.

Question 73

Discuss government stability and political risk when applied to international versus domestic business.Identify and briefly describe the three major types of political risk.