Deck 5: Identifying and Analyzing Domestic and International Opportunities

Question 1

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

Answer 1

False

Question 2

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.

Answer 2

False

Question 3

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

Answer 3

False

Question 4

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

Question 5

The U.S.Chamber of Commerce and Small Business Development Centers are good places to get information and assistance in starting a new business.

Question 6

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

Question 7

Gartner provides information on technology markets.

Question 8

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

Question 9

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

Question 10

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 11

The Kaufmann foundation Provides resources for entrepreneurship education and research and lists the angel (private investor)groups throughout the United States.

Question 12

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

Question 13

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

Question 14

The key to successful entrepreneurship is to develop an idea that has a market with a need for the product or service idea conceived.

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

Nonverbal or hidden language of the culture can be thought of in terms of several components - time,intangible value,and business relationships.

Question 21

All of the following are questions an opportunity assessment plan might answer except:

A)How much capital do I need?
B)What market need does it fill?
C)What business skills do I have?
D)Can a patent be obtained?

Question 22

______ 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 23

An opportunity assessment plan:

A)is the same thing as a business plan.
B)is longer than a business plan.
C)has a lot of computer-based spreadsheets.
D)focuses on the opportunity,not the venture.

Question 24

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

Question 25

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

Question 26

Profits and tax benefits are common motivations for going global.

Question 27

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

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

Question 28

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 29

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

Question 30

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

Question 31

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

Question 32

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

Question 33

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 34

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 35

_________ 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 36

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

Question 37

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 38

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

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

In selecting a foreign market the selection decision should be based on both past sales and competitive positioning as well as an assessment of each foreign market alternative.

Question 41

Which of the following is not an aspect of nonverbal or hidden language?

A)Energy
B)Business relationships
C)Space
D)Time

Question 42

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 43

Which of the following statements is not true?

A)Religion in a culture defines the ideas for life,reflected in the values and attitudes of individuals and the overall society.
B)The tenets of nonreligious or secularist societies do not affect behavior.
C)The impact of religion varies depending on the strength of the dominant religious tenets and their impact on the values and attitudes of the culture.
D)Religion provides the basis for some degree of transcultural similarity under shared beliefs and attitude.

Question 44

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

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

Question 45

_____ 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 46

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 47

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 48

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 49

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 50

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 51

All of the following are government sources of information except:

A)Census reports
B)Export/Import Authority
C)NAICS and SIC
D)Hoovers

Question 52

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 53

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 54

_____ is not considered a nonequity arrangement.

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

Question 55

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 56

______ 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 57

It is a practice in some cultures to hug and even kiss when greeting a known business partner.What aspect of nonverbal language is being referred to in the above example?

A)Time
B)Business relationship
C)Space
D)Customs

Question 58

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 59

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

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

Question 60

Which of the following statement is(are)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 61

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 62

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 63

List the seven various aspects of culture.

Question 64

_____ 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 65

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

Question 66

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.
A.Licensing - involves an entrepreneur who is a manufacturer (licensee)giving a foreign manufacturer (licensor)the right to use a patent,trademark,technology,production process,or product in return for the payment of a royalty.
Benefit: Low development costs and risks.
Disadvantages: Lack of control over technology,inability to realize location and experience curve economies,inability to engage in global strategic coordination.
B.Turn-key projects - 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.
Benefits: relatively low risk,ability to earn returns from process technology skills in countries where FDI is restricted.
Disadvantages: Creation of efficient competitors,lack of long-term market presence.

Question 67

Define political risk analysis,and identify and briefly describe the three major types of political risk.
A.Operating risk - risk of interference with the operations of the venture
B.Transfer risk - risk in attempting to shift assets or other funds out of the country
C.Ownership risk - the largest potential risk,where the country takes over the venture's property and employees

Question 68

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

Question 69

What are the major reasons why an entrepreneur would go global?

Question 70

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

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

Question 71

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 72

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

Question 73

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