Question 1

Two-way trade between ________ and the United States represents the world's largest bilateral trading relationship.

Accepted Answer

A)  China 
B)  Canada 
C)  Vietnam 
D)  Russia

Question 2

In a short essay, explain the factors involved in a firm's decision to use indirect exporting or direct exporting.

Accepted Answer

The answer of In a short essay, explain the factors...

Question 3

Organic Towel Exports (Scenario)
The Organic Towel Company (OTC) employs 400 workers at its facility in Liverpool, England, where the firm has been manufacturing 100% organic cotton towels for five years. OTC sells towels in the United Kingdom primarily to boutique hotels and specialty retail stores, as well as to individual consumers through the company's . Recently, OTC managers attended a trade show in London where they made contact with numerous foreign market managers. OTC received a request from Earth Waves, an organic clothing store in Toronto, Canada, for a large order of towels. OTC had not been looking into expanding, but firm managers are seriously considering the opportunity to reach a global niche market with their towels.
-Which of the following most strongly suggests OTC should not export its towels to Earth Waves?

Accepted Answer

A)  OTC managers are risk-takers with the determination to expand OTC. 
B)  OTC's towel manufacturing at the Liverpool facility is nearing maximum capacity. 
C)  Earth Waves has a large client base and publishes a semi-annual catalog. 
D)  Earth Waves has offered to guide OTC through Canadian regulations.

Question 4

Which of the following questions is most likely to be addressed as firms organize for exporting?

Accepted Answer

A)  Which market offers the most opportunities to the firm for profit and expansion? 
B)  Which domestic and foreign retailers will probably purchase the firm's products? 
C)  How much should the firm rely on intermediaries to carry out exporting? 
D)  How to adapt pricing and marketing strategies to suit the foreign market?

Question 5

Prox Inc. is a U.S.-based manufacturer of consumer electronics. It decides to export to Mexico and wants to protect its goods against damage, loss, and pilferage. Which of the following documents is applicable here?

Accepted Answer

A)  insurance certificate 
B)  bill of lading 
C)  pro forma invoice 
D)  license

Question 6

Describe the four-step process many managers use to achieve successful exporting.

Accepted Answer

The answer of Describe the four-step process many managers use...

Question 7

Which of the following activities can be classified as home-based international exchange activities?

Accepted Answer

A)  foreign direct investment 
B)  equity-based collaborative venture 
C)  countertrade 
D)  franchising

Question 8

Which of the following is an advantage of countertrade?

Accepted Answer

A)  The cash that the seller receives upon selling received goods is always more than expected. 
B)  It can help a firm get a foothold in new markets, leading to new customer relationships. 
C)  It is simple, easy, and time-saving because deals are easily agreed upon. 
D)  It is a high-control strategy that requires substantial resource commitment when compared to an equity joint venture.

Question 9

Organic Towel Exports (Scenario)
The Organic Towel Company (OTC) employs 400 workers at its facility in Liverpool, England, where the firm has been manufacturing 100% organic cotton towels for five years. OTC sells towels in the United Kingdom primarily to boutique hotels and specialty retail stores, as well as to individual consumers through the company's . Recently, OTC managers attended a trade show in London where they made contact with numerous foreign market managers. OTC received a request from Earth Waves, an organic clothing store in Toronto, Canada, for a large order of towels. OTC had not been looking into expanding, but firm managers are seriously considering the opportunity to reach a global niche market with their towels.
-Which of the following most likely supports OTC exporting their towels to Earth Waves?

Accepted Answer

A)  Domestic sales of OTC towels have dwindled, and a new market is needed. 
B)  Earth Waves is located in an excellent location in central Toronto. 
C)  OTC is an SME that can readily adapt to the demands of the Canadian market. 
D)  The founder of OTC has numerous contacts in Canada.

Question 10

The bill of lading is the "birth certificate" of the goods being shipped and indicates the country where they originate.

Accepted Answer

A) True 
 B)False

Question 11

In a short essay, explain why exporting is often more advantageous for SMEs than large MNEs. Provide an example of an SME that has seen significant growth since exporting.

Accepted Answer

The answer of In a short essay, explain why exporting...

Question 12

Small Business Intermediaries (Scenario)
Mary's Mosaics is a small business in California that creates custom-designed decorative items from mosaic tiles and glass. The international e-commerce created for Mary's Mosaics generates the majority of the firm's business, although the firm also sells items to U.S. retailers for domestic sale. Mary Boyd, the CEO of Mary's Mosaics, recently received an order from a Spanish retailer for $20,000 worth of mosaic items. Similar orders have been placed from importers in Australia, England, and Canada. Mary needs to identify appropriate foreign intermediaries for each market.
-When Mary begins her search for a foreign intermediary in Australia, ________ would most likely provide her with helpful information.

Accepted Answer

A)  Australian customers 
B)  Australian trade consultants 
C)  Australian newspapers 
D)  Australian s

Question 13

Indirect exporting is exporting that is accomplished by contracting with intermediaries located in the foreign market.

Accepted Answer

A) True 
 B)False

Question 14

Organic Towel Exports (Scenario)
The Organic Towel Company (OTC) employs 400 workers at its facility in Liverpool, England, where the firm has been manufacturing 100% organic cotton towels for five years. OTC sells towels in the United Kingdom primarily to boutique hotels and specialty retail stores, as well as to individual consumers through the company's . Recently, OTC managers attended a trade show in London where they made contact with numerous foreign market managers. OTC received a request from Earth Waves, an organic clothing store in Toronto, Canada, for a large order of towels. OTC had not been looking into expanding, but firm managers are seriously considering the opportunity to reach a global niche market with their towels.
-Which of the following questions must be evaluated by OTC managers as a first step to exporting?

Accepted Answer

A)  What are the risks involved in exporting OTC towels to Earth Waves? 
B)  Do Canadian towel companies have a high success rate when they export? 
C)  Will OTC save money on domestic marketing by exporting? 
D)  How can OTC adapt its distribution strategy in Canada?

Question 15

Which of the following is an example of a push factor for a focal firm?

Accepted Answer

A)  foreign government incentives 
B)  increasing competition in the home market 
C)  collaborative venture with a competitor in the foreign market 
D)  increasing demand in the home market

Question 16

Buying products and services from foreign sources and bringing them into the home market is called ________.

Accepted Answer

A)  exporting 
B)  global sourcing 
C)  global bartering 
D)  offshoring

Question 17

Factoring occurs when an independent company coordinates an export order in the seller's country and makes payment for the goods in the currency of that country.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is most likely a disadvantage to firms who use exporting as an entry strategy?

Accepted Answer

A)  high cost of foreign market entry 
B)  difficulties withdrawing from foreign markets 
C)  high risk of low sales due to fluctuations in exchange rates 
D)  high risk due to uncertainty in the political environment of the foreign market

Question 19

Compared to other entry strategies, exporting minimizes risk and maximizes flexibility.

Accepted Answer

A) True 
 B)False

Question 20

________ is the procurement of products or services from independent suppliers or company-owned subsidiaries located abroad for consumption in the home country or a third country.

Accepted Answer

A)  Importing 
B)  Exporting 
C)  Offshoring 
D)  Microfinancing

Exam 14: Exporting and Countertrade

Two-way trade between ________ and the United States represents the world's largest bilateral trading relationship.

In a short essay, explain the factors involved in a firm's decision to use indirect exporting or direct exporting.

Which of the following questions is most likely to be addressed as firms organize for exporting?

Prox Inc. is a U.S.-based manufacturer of consumer electronics. It decides to export to Mexico and wants to protect its goods against damage, loss, and pilferage. Which of the following documents is applicable here?

Describe the four-step process many managers use to achieve successful exporting.

Which of the following activities can be classified as home-based international exchange activities?

Which of the following is an advantage of countertrade?

The bill of lading is the "birth certificate" of the goods being shipped and indicates the country where they originate.

In a short essay, explain why exporting is often more advantageous for SMEs than large MNEs. Provide an example of an SME that has seen significant growth since exporting.

Indirect exporting is exporting that is accomplished by contracting with intermediaries located in the foreign market.

Which of the following is an example of a push factor for a focal firm?

Buying products and services from foreign sources and bringing them into the home market is called ________.

Factoring occurs when an independent company coordinates an export order in the seller's country and makes payment for the goods in the currency of that country.

Which of the following is most likely a disadvantage to firms who use exporting as an entry strategy?

Compared to other entry strategies, exporting minimizes risk and maximizes flexibility.

________ is the procurement of products or services from independent suppliers or company-owned subsidiaries located abroad for consumption in the home country or a third country.