IBA 350 Test 2

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What ethical concerns do government intervention and trade barriers raise for developing​ economies?

Tariffs can hurt poor countries like​ Bangladesh, where clothing exporters are concentrated

A(n)________ is a designated location within a country that receives imported goods for assembly and then​ re-exports finished products.

Foreign trade zone

An upscale hotel chain is developing a global marketing strategy to expand into foreign markets. Which market segment should be​ targeted?

Frequent business travelers

________ means serving a key international customer in a consistent and standardized​ manner, regardless of where in the world it operates.

Global account management

A(n) ________ is the​ firm's integrated network of​ sourcing, production, and​ distribution, organized on a worldwide scale and located in countries where competitive advantage can be maximized.

Global supply chain

​________ formulate best practices that the firm implements in all its units worldwide.

Global​ new-product planning teams

There is a high degree of unrest in the Middle East. Given these​ conditions, which of the following participants is the most important in transforming political and legal​ systems?

Government

What can governments do to lessen the harm that global sourcing can​ cause?

Governments can foster the development of new technologies at home.

Which of the following is an example of protectionism used to support local​ businesses?

Governments institute trade barriers on foreign imports to let​ young, domestic firms gain market share

________ refers to the legal importation of genuine products into a country by intermediaries other than authorized distributors​ (also known​ as parallel imports).

Gray market activity

An international technology company is deciding how to utilize its advertising budget for the year. Which of the following is the best​ option?

Hire a global advertising agency

What effect do import licenses have on businesses​ overseas?

Import licenses allow companies to do business legally overseas by allowing them to import products

A large cosmetics company is looking to break into international markets. What strategy should the company pursue to achieve this​ goal?

It should develop a global brand

Which of the following describes the Foreign Corrupt Practices Act​ (FCPA)?

Firms are prohibited from offering bribes to foreign firms to obtain business

Which statement about free trade zones​ (FTZs) is​ true?

Firms can use FTZs to assemble foreign materials and components into finished​ products, which are​ re-exported

​________ is a group of customers who share similar characteristics across many national markets.

A global market segment

Toyota uses​ ________ to ensure that its supply of brown seat covers is delivered when needed on the assembly line.

A just-in-time inventory system

What is a bill of​ lading?

A legal contract between exporters and importers for shipping goods

________ is an alliance of two or more countries that have agreed to eliminate tariffs and other restrictions to​ cross-border flow of​ products, services,​ capital, and occasionally labor.

A regional economic bloc

Which of the following statements about the General Agreement on Tariffs and Trade​ (GATT) is​ FALSE?

According to the​ GATT, a trade concession to one country did not become a concession to all countries

In marketing products to bottom of the pyramid​ (BOP) countries, Unilever decided to​ ________ its products to the​ cultural, social, and political local environment.

Adapt

TDC​ Industries, a U.S.​ firm, has established operations in​ Germany, so TDC Industries has free trade access to​ ________of the EU market.

All

Which of the following examples includes a compensation​ deal?

An energy company purchases timber using oil and a​ $10,000 check.

Which of the following characterizes​ extraterritoriality?

Applying​ home-country laws to persons outside national borders

What is the benefit of environmental​ scanning?

Assessing potential threats to the firm

When​ Coca-Cola began to sell beverages in​ Japan, research showed that products labeled​ "diet" were unappealing to the​ Japanese, a population not considered obese. The company changed the name to Coke Light. This is an example of positioning according to​ ________.

Attributes

Unilever's global marketing strategy is to​ ________.

Be both global and local

Activists organized​ a(n) ________ of petroleum company BP following the oil spill in the Gulf of Mexico

Boycott

The strength of a global brand is measured by​ ________.

Brand equity

________ is the outsourcing to independent suppliers of business service functions such as​ accounting, payroll, or technical support.

Business process outsourcing

An American company that does business overseas has to be concerned about local events. Why should a company be concerned about political events and the legal environment in the country in which it does​ business?

Changes in the political climate might influence government interference in business​ practices, putting the safety of the​ company's employees in jeopardy

What is the basis of civil​ law?

Codified rules

Which of the following statements best describes​ socialism?

Collective welfare outweighs individual welfare

In the Middle​ East, Iran is a theocratic totalitarian state. Which economic system is expected to be aligned with this political​ system?

Command economy

Which type of economic system is associated with​ totalitarianism?

Command economy

In its current​ state, the EU can be described as being at which stage of economic​ integration?

Common market

Which of the following is NOT a benefit of​ standardization?

Compliance with local regulations

If one of the politically unstable countries in the Middle East decides to take over all foreign firm possessions without any form of​ payment, ________ has occurred.

Confiscation

Which of the following is an arrangement in which a focal firm has an agreement with an independent supplier to produce items according to​ well-defined specifications?

Contract manufacturing

In selecting a transportation​ mode, firms should keep three factors in​ consideration: ________.

Cost, transit​ time, and predictability

Which of the following involves paying for goods or services using other goods or services when conventional means of payment are difficult or​ unavailable?

Countertrade

________ refers to the possibility of loss or adverse effects on company operations and profitability as a result of changes in a​ country's political​ and/or legal environment.

Country risk

Which of the following was NOT a step taken by the European Union​ (EU) in becoming an economic​ union?

Creation dispute settlement methods in areas such as​ investment, unfair​ pricing, labor​ issues, and the environment

Which of the following are environmental conditions that influence a​ firm's product​ development?

Cultural and financial factors

Which of the following determines buyer attitudes toward​ advertising?

Culture

The second level of regional integration is​ a(n) ________.

Customs union

Many firms are avoiding traditional distribution channels by using​ ________.

Direct marketing

An agricultural firm is considering doing business in a foreign country with environmental​ laws, foreign investment​ laws, e-commerce​ laws, an underdeveloped legal​ system, and a socialistic government. Which of the following would most prevent the company from maximizing its​ profits?

Environmental law would cause the greatest hindrance because firms must pay for pollution

Six countries formed an alliance in 1957 called the​ ________.

European Economic Community

Which of the following is a regional trade​ organization?

European Union​ (EU)

________ involves producing products or services in one nation and selling them in another.

Exporting

What kind of government seizure compensates​ foreign-owned businesses?

Expropriation

A U.S. pharmaceutical corporation outsources its research and development of new medications to various other countries in order to complete more clinical trials at one time. Which of the following benefits to global sourcing does this example best​ demonstrate?

Increasing speed to market

________ is accomplished by contracting with intermediaries located in the​ firm's home market.

Indirect exporting

Regional integration leads to increased​ ________ by firms inside their economic bloc.

Internationalization

Which type of government intervention encourages foreign companies to enter a​ host-country market?

Investment incentives

Which of the following best describes a political​ system?

It ensures stability based on laws

Why would a nation choose to be a member of an economic​ bloc?

It is easier to reach an agreement on free trade with a few nations than with numerous countries.

A huge MNE was the victim of creeping expropriation from a foreign government. Why is creeping expropriation ethically​ wrong?

It occurs after an MNE makes large investments in a​ country's property and facilities

A U.S. liquor company is establishing a distribution chain for stores across several national markets. The company wants to ensure close control over marketing activities. Which of the following is best for this company and​ why?

It should use foreign direct investment because this allows the firm to stay close to the market.

Which of the following benefits most from global​ sourcing?

Large-scale manufacturing firms

________ occurs when one party files a lawsuit against another.

Litigation

Which of the following is a disadvantage of regional​ integration?

Loss of direct investment

Which of the following best describes global​ sourcing?

Low-control strategy

An Italian exporter of designer clothes who sells products in the United States has gained a price advantage because the euro is weakening in relation to the dollar. What is a good strategy for dealing with this​ situation?

Maintain normal price​ levels, expand the product​ line, or add more costly features

Which of the following is a strategy managers can employ to manage country​ risk?

Maintaining a strict adherence to ethical behavior

Which of the following is an internal factor that affects international​ pricing?

Management's market share goals

Economists Debbie and Don are discussing the effect of government intervention on business. Debbie believes that businesses that operate internationally have a more difficult time succeeding than those that operate solely domestically because of government intervention abroad. Don disagrees and asserts that international businesses experience ease of trade more readily than exclusively domestic businesses. Which of the following is the strongest argument for​ Debbie's point of​ view?

Many governments enforce strict tariffs and restrictions on imports

Unilever used​ ________ to inform consumers in Africa about the health benefit of using iodized​ salt, even though the cost was higher.

Marketing communications

Which of the following​ determine(s) the nature of international marketing​ communications?

Media availability and quality

Asterix, a French theme​ park, spoke out against the French​ government's support for the creation of Disneyland Paris because Disney is an American company. This example shows that​ ________.

Rival domestic firms complain to their government when foreign firms receive governmental support

Today, the Tunisian legal system is based on French civil​ law, whereas the Law of Personal Status is based on Islamic law.​ Tunisia's legal system is an example of which of the​ following?

Mixed system

Which of the following best describes the role of an​ intermediary?

Moving products through a distribution channel to a retailer

Which of the following statements about NAFTA is​ true?

NAFTA allowed​ member-country firms to submit bids for government contracts in the three countries

The United States blocks exports of nuclear and military technology to nations considered state sponsors of​ terrorism, such as Iran and Syria. This is an example of which defensive motive by the U.S.​ government?

National Security

A government policy or procedure that restricts trade through means other than tariffs is known as​ a(n) ________.

Nontariff trade barrier

Which of the following limits a​ manager's success in global​ sourcing?

Outsourcing all​ value-chain activities

Which of the following is NOT a key strategy to combat export price escalation​ abroad?

Outsourcing production to a country with a higher standard of living and higher wages

Which of the following characterizes the cash in advance​ method?

Payment is made prior to product shipment.

​________ refers to making the marketing program elements uniform with a view to targeting entire​ regions, or even the global​ marketplace, with the same product or service.

Standardization

An international supermarket chain is opening stores in foreign markets. Which adaptation could be made to accommodate national​ preferences?

Stocking local produce

The World Bank has published an index entitled Ease of Doing Business. Which of the following is most likely to make a country​ "easy" to do business​ in?

Subsidies

Which of the following is an advantage of direct​ exporting?

Potential for greater profit margins

Which of the following participants is LEAST likely to transform a​ nation's political and legal​ system?

Private MNEs such as Unilever and Coca Cola

Which of the following best characterizes a​ democracy?

Private property rights

Which statement about international promotional activities is​ true?

Promotions are intended to stimulate​ first-time purchases

________ pertains to national economic policies that restrict free trade and protect domestic industries from foreign competition.

Protectionism

A large consumer home products exporter issues a document that lists the cost of its cleaning products and describes the products themselves and their uses. The document is most likely​ a(n) ________.

Quotation

Which of the following is NOT a risk of global​ sourcing?

Redesigning business processes

Many critics of global sourcing assert that global​ sourcing________.

Reduces the number of home country jobs

An electronics firm in the United States procures production parts from a manufacturer in Japan.​ Recently, the Japanese manufacturer received a larger client.​ Consequently, the Japanese manufacturer is not providing the level of service to the U.S. electronics firm as in the past. Which global sourcing risk does this scenario​ illustrate?

Relying too heavily on suppliers

What is a disadvantage of foreign direct​ investment?

Requiring costly investments

Which of the following is a characteristic of​ exporting?

There is less of an opportunity to learn the purchase behavior of foreign customers.

Which of the following describes a legal system with clear rules that are publicly​ disclosed, enforced​ fairly, and respected by​ individuals, organizations, and the​ government?

Rule of law

It has recently been found that special interest groups​ (SIGs) have unprecedented access to politicians through social events. Why should companies be concerned with the​ SIGs' access to government​ officials?

SIGs influence elected officials who can change policy

The United States has implemented trade sanctions on Iran and Syria. What is the purpose of​ sanctions?

Sanctions punish unwanted activities by foreign countries

All of the following are ways to find foreign intermediaries EXCEPT by​ ________.

Searching the U.S. Small Business Administration website

According to the​ author, managers should pursue a strategy that​ ________.

Seeks local responsiveness and international integration

China has added democratic approaches such as land reforms and open markets to increase commercial activity. This example shows that​ ________.

Some totalitarian regimes are evolving toward democracy and capitalism

Which of the following coordinates​ economic, social, and cultural affairs among​ Bahrain, Kuwait,​ Oman, Qatar, Saudi​ Arabia, and the United Arab​ Emirates?

The Gulf Cooperation Council​ (GCC)

If you are a business looking for a foreign market in which to sell​ goods, what does economic freedom in a country mean to your​ business?

The government will support foreign business by enacting laws that decrease import quotas

Which of the following does NOT describe Islamic​ law, also known as sharia​ law?

The origins of Islamic law date back to Roman law and the Napoleonic Code

How can​ export-led development models help countries improve their​ economies?

The​ export-led development model enables countries to make goods and then sell them to the world

Many countries in the Middle East and North Africa exhibit which of the following political systems with substantial dictatorial​ powers?

Totalitarianism

Today, no automaker owns or makes its own parts.​ So, how does Toyota get​ suppliers?

Toyota has a global supply chain

What is one potential reason for Toyota outsourcing​ value-chain activities to​ suppliers?

Toyota is not superior in all​ value-chain activities

Which of the following statements best describes the European Union​ (EU)?

Trade among the EU members takes place unobstructed

What type of intermediary handles transactions for the importing and exporting of​ commodities, products, and​ services?

Trading company

What is the basis of common​ law?

Tradition, previous​ cases, and legal precedents

A U.S. computer company utilizes FedEx for all of its shipping and delivering needs. Which aspect of implementing global sourcing does this example​ demonstrate?

Using​ third-party logistics providers

Which of the following is a key risk associated with global​ branding?

Violating​ host-country laws and regulations

You own a company in Texas and have an offer to open up a manufacturing plant as a maquiladora within the territory of one of your largest​ customers, Mexico. Why is this scenario beneficial to your​ business's profit?

You can manufacture your goods in the destination country and take advantage of​ low-cost labor

You own a firm that engages in overseas business.​ Recently, the exchange rate became much higher for your​ country's currency. How would the new exchange rate most likely affect your​ sales?

Your sales would likely decrease because your goods are now more expensive than those of your local counterparts

What is the most typical type of intermediary in the exporting​ process?

​Foreign-based independent distributor


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