Question 1

Management contracts are attractive because they allow firms to earn additional revenues without incurring any investment risks or obligations.

Accepted Answer

A) True 
 B)False

Question 2

What are sogo soshas? What advantages do they offer exporters? Give three examples of prominent sogo soshas.

Accepted Answer

The answer of What are sogo soshas? What advantages do...

Question 3

When the licensor fully investigates market opportunities and the abilities of its licensees, licensing has a relatively low financial risk.

Accepted Answer

A) True 
 B)False

Question 4

________ occur(s) when a firm sells its products to a domestic customer, which in turn exports the product, in either its original form or a modified form.

Accepted Answer

A)  Indirect exporting 
B)  Direct exporting 
C)  Intercorporate transfers 
D)  Intracorporate transfers

Question 5

Pharmaceutical firms routinely use licensing as their entry mode.

Accepted Answer

A) True 
 B)False

Question 6

________ for exporting are those that push a firm into foreign markets.

Accepted Answer

A)  Reactive motivations 
B)  Proactive motivations 
C)  Opportunity motivations 
D)  Avoidance motivations

Question 7

According to the eclectic theory, all of the following should be considered when choosing a mode of entry EXCEPT ________.

Accepted Answer

A)  ownership advantages 
B)  location advantages 
C)  financial control advantages 
D)  internalization advantages

Question 8

Firms should use both objective and subjective measures when considering the potential for growth in an economy.

Accepted Answer

A) True 
 B)False

Question 9

Which form of exporting is used by firms in order to lower their production costs?

Accepted Answer

A)  indirect exporting 
B)  direct exporting 
C)  intercorporate transfers 
D)  intracorporate transfers

Question 10

The greater the investment costs incurred by the licensee, the longer is the likely duration of the licensing agreement.

Accepted Answer

A) True 
 B)False

Question 11

Webb-Pomerene associations play a major role in international business.

Accepted Answer

A) True 
 B)False

Question 12

Executives at KBH Enterprises are considering the idea of entering the Taiwanese market through a licensing agreement. Which of the following factors is LEAST relevant to the firm's assessment of the Taiwanese market?

Accepted Answer

A)  current size of market 
B)  potential size of market 
C)  foreign exchange in market 
D)  legal and political environment in market

Question 13

What is the first step in selecting a foreign market?

Accepted Answer

A)  assessing market potential 
B)  monitoring major markets 
C)  evaluating host country's trade policies 
D)  assessing general legal and political environments

Question 14

Ownership advantages are always tangible resources.

Accepted Answer

A) True 
 B)False

Question 15

Which theory listed below is useful in deciding which mode of entry to use when entering foreign markets?

Accepted Answer

A)  ownership advantage theory 
B)  internalization theory 
C)  eclectic theory 
D)  relative factor endowments

Question 16

Which of the following is not a disadvantage of exporting?

Accepted Answer

A)  vulnerability to tariffs 
B)  logistical complexities 
C)  potential conflicts with distributors 
D)  restrictions on foreign investment

Question 17

Which of the following is not a mode of entry into foreign markets?

Accepted Answer

A)  exporting 
B)  importing 
C)  international licensing 
D)  greenfield strategy

Question 18

The number of joint ventures being formed today is on the decline.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is NOT a characteristic of exporting?

Accepted Answer

A)  high financial exposure 
B)  gradual market entry 
C)  logistical complexities 
D)  local market knowledge

Question 20

BTV Enterprises specializes in the physical transportation of goods for its clients by arranging customs documentation and obtaining transportation services. BTV Enterprises is most likely a(n) ________.

Accepted Answer

A)  manufacturers' agent 
B)  export and import broker 
C)  freight forwarder 
D)  manufacturers' export agent

Exam 12: Strategies for Analyzing and Entering Foreign Markets

Management contracts are attractive because they allow firms to earn additional revenues without incurring any investment risks or obligations.

What are sogo soshas? What advantages do they offer exporters? Give three examples of prominent sogo soshas.

When the licensor fully investigates market opportunities and the abilities of its licensees, licensing has a relatively low financial risk.

________ occur(s) when a firm sells its products to a domestic customer, which in turn exports the product, in either its original form or a modified form.

Pharmaceutical firms routinely use licensing as their entry mode.

________ for exporting are those that push a firm into foreign markets.

According to the eclectic theory, all of the following should be considered when choosing a mode of entry EXCEPT ________.

Firms should use both objective and subjective measures when considering the potential for growth in an economy.

Which form of exporting is used by firms in order to lower their production costs?

The greater the investment costs incurred by the licensee, the longer is the likely duration of the licensing agreement.

Webb-Pomerene associations play a major role in international business.

Executives at KBH Enterprises are considering the idea of entering the Taiwanese market through a licensing agreement. Which of the following factors is LEAST relevant to the firm's assessment of the Taiwanese market?

What is the first step in selecting a foreign market?

Ownership advantages are always tangible resources.

Which theory listed below is useful in deciding which mode of entry to use when entering foreign markets?

Which of the following is not a disadvantage of exporting?

Which of the following is not a mode of entry into foreign markets?

The number of joint ventures being formed today is on the decline.

Which of the following is NOT a characteristic of exporting?

BTV Enterprises specializes in the physical transportation of goods for its clients by arranging customs documentation and obtaining transportation services. BTV Enterprises is most likely a(n) ________.