Chapter 9 Quiz

The Continental AG has been searching for less expensive raw materials for manufacturing its vehicle tires. Continental has found that there are less expensive sources in the country of Indonesia, but it needs to form a partnership with the government of Indonesia in order to gain access to the country's rubber. What type of partnership will need to be formed?

A joint venture

H&M has opened stores in Beijing and Shanghai and hopes to capitalize on China's growing consumer economy because the potential of China's consumer market is so vast that it is almost impossible to measure. H&M and other global retailing giants operating in China are beneficiaries of the _____, which was established in 1989 to promote open trade and economic and technical cooperation among member nations. In addition, they are allowed to participate in a wide range of organizational activities and have become increasingly competitive regarding global business.

APEC

The trade alliance that includes Brazil, Argentina, Chile, and other countries is known as

MERCOSUR.

Select the true statement.

Refusing to give payoffs and bribes in some foreign countries may put a marketer at a competitive disadvantage.

Which approach entails minimal effort and cost?

Using an export intermediary

Scenario 9.1 Use the following to answer the questions. Harley-Davidson Motors manufactures all of its motorcycles in the U.S. at one of four sites. With a large number of its bikes sold in markets all around the world, it still retains the manufacturing close to the headquarters for several reasons, one being that its management wants to keep close watch on the quality of its products. However, for all the accessories, apparel, and other riding gear, Harley-Davidson contracts out to other manufacturers to produce the items with the Harley name and logo. Some of these items, particularly the apparel, are made in China. Lately, some members of the Harley Owners' Group (HOG) have been complaining to the company about this practice, citing that "everything Harley should be made in America." Refer to Scenario 9.1. Harley-Davidson's practice of having manufacturers in China produce apparel items with the Harley logo is an example of

contract manufacturing.

LG Electronics sells several different product lines around the world through home appliance and electronics stores. LG appliances and electronics have been historically made in Korea, where the company is headquartered. Recently, LG has been investigating the possibility of buying land and building a production plant in Texas, in the United States. LG is now operating as a(an) ______; however, if the plant is built in Texas, it will be operating as a(an) ______.

exporter; multinational enterprise

Traditionally, most firms entered international markets

incrementally.

The practice of contracting with an organization to perform some or all business functions in a country other than the country in which the product will be sold is known as

offshore outsourcing.

Mercedes Benz announced it was ending a partnership with Tesla. A few years earlier, Mercedes Benz had partnered with Tesla and agreed to use its vehicle batteries on some of its vehicles. The hope was that the firms could use their combined knowledge in electric vehicle technology to develop better products in this area. Eventually, Mercedes Benz began to focus more on hydrogen cell technology, and the partnership dissolved. This partnership between the two firms was most likely a(n)

strategic alliance