MKTG 3420 Chapter 10

Which of the following is an advantage of R&D contracts?

Ability to tap into the best, cost-effective locations

_____ refers to the clustering of economic activities in certain locations

Agglomeration

Which of the following is a first-mover advantage?

Avoidance of clash with a dominant firm at home

A(n) _____ is a non-equity mode of entry used to build a longer-term presence by building and then operating a facility for a period of time before transferring operations to a domestic agency or firm

BOT agreement

Which of the following is an advantage of direct exports?

Better control distribution

_____ is the difference between two cultures along identifiable dimensions.

Cultural distance

_____ are the most basic non-equity mode of entry, capitalizing on economies of scale in production concentrated in the home country and providing better control over distribution.

Direct exports

Which of the following is true of modes of entry?

Equity modes are indicative of relatively larger, harder-to-reverse commitments.

Which of the following is a late-mover advantage?

Fewer technological and market uncertainties

Which of the following conforms to the notion put forward by the school of thought associated with stage models?

Firms enter culturally distant countries in later stages when they may gain more confidence.

Which of the following characterizes an MNE from a non-MNE?

It enjoys OLI advantages

Which of the following entry modes is a type of strategic alliance?

Licensing

Which of the following is a disadvantage of licensing and franchising?

Little control over marketing

Which of the following is an advantage shared by both greenfield operations and acquisitions?

Protection of know-how

_____ refers to the amount of resources committed to entering a foreign market.

Scale of entry

Which of the following is true of licensing/franchising?

The licensor/franchisor does not have tight control over production and marketing.

Which of the following is a benefit of large-scale entries?

They demonstrate strategic commitment to certain markets.

Which of the following is true of indirect exports?

They export through domestically based export intermediaries.

Which of the following is a non-equity mode of entry?

Turnkey projects

Which of the following is an equity mode of entry?

Wholly owned subsidiaries

A greenfield operation refers to _____.

a wholly owned subsidiary created by building a new factory and offices from scratch

Companies with market-seeking strategic goals search for _____.

abundance of strong market demand and customers willing to pay

With regard to foreign market entry, the resource-based view argues that foreign firms need to:

deploy overwhelming resources and capabilities to offset their liability of foreignness.

Efficiency-seeking firms go to countries that have _____.

economies of scale and abundance of low-cost factors

Co-marketing refers to _____.

efforts among a number of firms to jointly market their products and services

The distinction between _____ is what defines an MNE from a firm that merely exports or imports.

equity and non-equity modes of entry

A disadvantage of acquisitions is _____.

high development costs

In the LLL framework, _____ refers to an emerging MNE's ability to identify and bridge gaps in its market.

linkage

An advantage of joint ventures is _____.

the access to partners' assets

A recent survey revealed that more than nine out of ten people prefer a watch made by firms in Switzerland to one made in India or U.S.A or any other country. This is an example of _____.

the country-of-origin effect

Liability of foreignness is _____.

the inherent disadvantage foreign firms experience in host countries

The country-of-origin effect refers to _____.

the positive or negative perception of firms and products from a certain country

Natural resource-seeking firms have compelling reasons to enter culturally and institutionally distant countries. This is a counter example of _____.

the stage model

In _____, clients pay contractors to design and construct new facilities and train personnel.

turnkey projects

Greenfield operations are similar to acquisitions in that they are both examples of _____.

wholly owned subsidiaries