GB
At which stage in the formation of alliance must a firm decide whether to take a contract or an equity approach?
2
Which of the following is an advantage of R&D contracts?
Ability to tap into the best
refers to the clustering of economic activities in certain locations
Agglomeration
is designed to combat monopolies and cartels.
Antitrust policy
Which of the following sets of words describes the initial set of actions a firm uses to gain competitive advantage and the other firm's response to it
Attack, counterattack
Which of the following is an advantage of direct exports?
Better control of distribution
International new ventures are also referred to as
Born Global
The price leader's _____ is defined as sufficient resources possessed to deter and combat defection.
Capacity to Punish
People of the same trade seldom meet together, even for merriment and diversion, but their conversation often ends in a conspiracy against the public." This quote from Adam Smith is referring to which of the following business relationship terms?
Collusion
refers to price setting at a level higher than the competitive level by monopolists.
Collusive Price Setting
determines the institutional mix of competition and cooperation that gives rise to the market system and also seeks to balance efficiency and fairness.
Competition Policy
The process of anticipating rivals' actions in order to both revise a firm's plan and prepare to deal with rivals' response is called
Competitor Analysis
The percentage of total industry sales accounted for by the top firms is called:
Concentration Ratio
is the strategy that focuses on a firm engaging in rapid learning and then expanding overseas.
Contender
A non-equity based alliance is also called a
Contractual
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
Country of Origin Effect
is an attack on a competitor's other markets if this competitor attacks a firm's original market.
Cross Market Retaliation
is the difference between two cultures along identifiable dimensions.
Cultural Distance
best suits situations where the pressures to globalize are relatively low, and local firms' strengths lie in a deep understanding of local markets.
Defender Strategy
With regard to foreign market entry, the resource-based view argues that foreign firms
Deploy Overwhelming resources and capabilities to offset
Blue ocean strategy focuses on
Developing New Markets
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
is the sale of products made by entrepreneurial firms in their home country to customers in other countries.
Direct Exports
If a firm is operating in an environment that is customized to home market, which of the following is the most preferred strategy?
Dodger
If a firm is operating in an environment with a high pressure for globalization, which of the following is the most preferred strategy?
Dodger
centers on cooperating through joint ventures with MNEs and sell-offs to MNEs.
Dodger
alliances are based on ownership or financial interest between the firms.
Equity Based
Which of the following industry characteristics contributes to collusion?
Existence of an industry price leader
perform an important "middleman" function by linking sellers and buyers
Export Intermediaries
strategy centers on leveraging home-grown competencies abroad.
Extender
If globalization pressures for a firm are relatively low, and if the firm has skills and assets that are transferable overseas, which of the following is the best strategy for the firm to use?
Extender Strategy
A build-operate-transfer (BOT) agreement is an equity mode of entry.
False
A disadvantage of licensing is high development costs.
False
A letter of credit increases transaction costs by increasing transaction risks.
False
A low degree of market commonality suggests that if a firm attacks in one market, its rivals may engage in cross-market retaliation.
False
According to the stage model, firms will enter culturally distant countries for their first internationalization.
False
An industry without a price leader makes it easier for firms in that industry to form collusions.
False
Blue ocean strategy focuses on attacking core markets defended by rivals.
False
Direct exports are the sale of products made through export intermediaries.
False
Equity modes tend to reflect relatively smaller commitments to overseas markets, whereas non-equity modes are indicative of relatively larger, harder-to-reverse commitments.
False
Franchising is typically used in manufacturing industries.
False
Greenfield operations are a type of wholly owned subsidiary that does not require any
False
Indirect exports are the most basic mode of entry, capitalizing on economies of scale in production concentrated in the home country.
False
Late movers face greater technological and market uncertainties.
False
Licensing and franchising are examples of equity modes of entry.
False
Licensing is mostly used in the service industries.
False
Location-specific advantages never change and only tend to grow.
False
Price leader is a firm that sets the highest price in the industry.
False
Tacit collusions typically lead to a cartel or trust.
False
The American antitrust policy is pro-incumbent and pro-producer.
False
The resource-based view suggests that firms need to take actions deemed legitimate and appropriate by the various formal and informal institutions governing market entries.
False
Turnkey projects cannot be established without FDI.
False
In a service industry, _____ refers to firm A's agreement to give Firm B the rights to use A's proprietary assets for a royalty fee paid to A by B.
Franchising
Which of the following alliances is a contractual alliance?
Franchising
Which of the following is a popular way to enter into international service markets?
Franchising
Which of the following is one of the methods by which entrepreneurial firms internationalize by entering foreign markets?
Franchising
Which of the following is a theory that studies the interactions between two parties that compete and/or cooperate with each other?
Game Theory
Which is one of the four phases in an alliance dissolution?
Going Public
The second phase in an alliance dissolution
Going public
A disadvantage of acquisitions is
High Development Costs
is a way to reach overseas customers by exporting through domestic-based export intermediaries.
Indirect Exports
Which of the following industrial characteristics makes a collusion difficult but leads to competition?
Lack of market commonality
Which of the following types of contracts are used between exporters and importers to reduce transaction risks?
Letter of Credit
A ____ is a financial contract that states that the importer's bank will pay a specific sum of money to the exporter upon delivery of the merchandise.
Letter of credit
In a manufacturing industry, _____ refers to firm A's agreement to give firm B the rights to use A's proprietary technology (such as a patent) or trademark (such as a corporate logo) for a royalty fee paid to A by B.
Licensing
Which of the following entry modes is a type of strategic alliance?
Licensing
The act of setting prices below cost to eliminate rivals while intending to raise them in the long run to make up for the initial losses is known as
Predatory Pricing
Which of the following is an advantage shared by both greenfield operations and acquisitions?
Protection of Know-How
Which of the following occurs in the uncoupling stage of an alliance dissolution?
Reconciliation
is defined as the extent to which a given competitor possesses strategic endowment comparable, in terms of both type and amount, to those of the focal firm.
Resource Similarity
A price leader is a firm that ____ in the industry.
Sets acceptable prices
Model of internationalization that portrays the slow step-by step process an SME must go through to internationalize its business is referred to as the
Stage Model
Natural resource-seeking firms have compelling reasons to enter culturally and institutionally distant countries. This is a counter example of _____.
The Stage Model
The country-of-origin effect refers to
The positive or negative perception of firms and products from a certain country
Which of the following is true of indirect exports?
They export through domestically based export intermediaries.
Agglomeration explains why certain cities and regions can attract businesses even in the absence of obvious geographic advantages.
True
Antitrust policies aim to balance efficiency and fairness in trade.
True
Cartel is an output- and price-fixing entity involving multiple competitors.
True
Cartels are often labeled as anticompetitive and outlawed by antitrust laws.
True
Co-marketing has the ability to reach more customers but with limited control and coordination.
True
Combining resource similarity and market commonality helps yield a framework of competitor analysis for any pair of rivals.
True
Competitive dynamics are the actions and responses undertaken by competing firms.
True
Cultural distance is the difference between two cultures along some identifiable dimensions.
True
Entrepreneurial firms can internationalize while staying in domestic markets through indirect exports.
True
Formal institutions governing domestic competition are broadly guided by competition policy.
True
Franchising is a type of internationalizing business model
True
Franchising is a type of internationalizing business model.
True
Greenfield operations and acquisitions have complete equity and operational control.
True
Indirect export is one of the strategies used by entrepreneurial SMEs to internationalize without leaving their home country.
True
Managers involved in alliances require collaborative relationship skills.
True
Prisoners' dilemma is a type of game in which the outcome depends on two parties deciding whether to cooperate or to defect.
True
Strategic goals and cultural and institutional distances influence the location of foreign entries.
True
The International Trade Administration investigates antidumping cases in the United States.
True
The antitrust policies in the United States make it difficult for incumbents to raise entry barriers for new entrants.
True
The defender strategy centers on local assets in areas in which MNEs are weak.
True
The preemption of scarce resources is a first mover advantage.
True
The price leader in a market possesses the capacity to punish
True
The price leader in a market possesses the capacity to punish.
True
The resource-based view argues that foreign firms need to deploy overwhelming resources and capabilities to offset their liability of foreignness.
True
In _____, clients pay contractors to design and construct new facilities and train personnel.
Turnkey Projects
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 Sub
Greenfield operations are similar to acquisitions in that they are both examples of
Wholly owned subside
A greenfield operation refers to
Wholly owned,new factories from office scratch
At stage 1 in the formation of an alliance, a firm must
decide whether growth can be achieved through market transactions
Co-marketing refers to
efforts among a number of firms to jointly market their products and services
Dumping is defined as a
exporter selling below cost abroad
A(n) ____ is an investment in real operations as opposed to financial capital.
real option