international business test 2
Which of the following statements illustrates a trend in FDI?
Companies from nations with advanced economies are active in FDI.
Which of the following is NOT an important consideration when managers are contemplating international expansion?
Technological and human resources available in the home office
Although Black and White Clothing Company is a successful international retailer, some business activities need improvement. Which of the following company activities should be changed to improve the success of the business?
The company imports all products to its European stores from manufacturing sources abroad.
Which of the following is included in a typical contract between an exporter and an intermediary?
The conditions for terminating the business relationship
Which of the following is the first step in the typical cycle of an international sale through a letter of credit?
The exporter signs a contract for sale of goods to the importer
If a firm seeks to make an international portfolio investment, which of the following will occur?
The firm will purchase stocks and bonds in a foreign company.
Which term refers to the basic contract between an exporter and a shipper?
bill of lading
A U.S. toy company that produces its toys in company-owned subsidiaries in China best illustrates ________.
captive sourcing
The biggest advantage of an export management company is usually its ________.
knowledge of the target market's cultural, political, legal, and economic conditions
A firm is considering establishing several manufacturing facilities abroad and is considering all the factors that influence FDI locations. Currently, it employs researchers to figure out if the locations have the ability to operate the new facilities. What factor of production is the firm considering?
labor
A ________ is an intermediary that imports and exports commodities, products, and services.
trading company
Your company has hired a third party in a foreign country to handle the routine tasks normally performed by the company's analysts and engineers. With more free time, these analysts and engineers can devote their talents to researching and innovating new products that your company has previously been unable to afford. Your company's approach illustrates ________.
transformational outsourcing
In 2014, which of the following was one of the top five recipients of FDI?
uk
A(n) ________ is FDI in which the investor assumes complete ownership of the business and secures complete managerial control over its operations.
wholly owned direct investment
In the past, the Chinese government insisted that foreign firms form joint ventures with Chinese companies, but now the government permits FDI through ________.
wholly owned subsidiaries
Which of the following is an outbound, home-based international exchange activity?
exporting
To help navigate the complex landscape in China, most firms choose to ________.
find a partner
Which company would most likely achieve success in global sourcing?
A company that plans to outsource its weakest value-chain activities
Which of the following companies best illustrates the risks that environmental factors present in global sourcing?
A company whose operations are disrupted by major power outages
What is the difference between an equity joint venture and a project-based collaboration?
A new legal entity is created in an equity joint venture, but not in a project-based collaboration.
What should senior management do to increase the likelihood that a global sourcing endeavor will succeed?v
Collaborate with suppliers in order to develop new ideas
What is the major function of intermediaries in the global supply chain?
Distributing and selling products and services
Which of the following would likely improve the successfulness of an international retailer?
Establishing logistics that are efficient
________ is an entry strategy that brings about huge inflows and outflows that comprise international trade.
Exporting
________ is the strategy of producing products or services in one country (often the producer's home country) and selling and distributing them to customers located in other countries.
Exporting
Which of the following statements about FDI is FALSE?
FDI requires fewer of a firm's capabilities than does any other entry strategy.
Which of the following reasons for acquiring production factors through FDI and collaboration is FALSE?
Firms that find a local partner increase the risks of entry.
What is a characteristic of most collaborations?
Having a partner that can navigate the local regulatory environment
Which of the following examples shows why some international retailers have failed?
Japanese consumers prefer high-quality furnishings, instead of IKEA's low-cost furnishings.
Which of the following can contribute to the success of a collaborative venture?
Protect core competencies by balancing competition with collaboration.
What risk do firms face when using licensing or franchising as an entry strategy in the Chinese market?
Protection of intellectual property
What is one potential reason for Toyota outsourcing value-chain activities to suppliers?
Toyota is not superior in all value-chain activities.
A single electronics firm has ownership of manufacturing and assembling facilities as well as retailers to sell the finished products in several foreign countries. Which of the following does this scenario describe?
Vertical integration
Which of the following describes a firm's ownership of the manufacturing and distribution of a product?
Vertical integration
Which of the following methods ensures payment based on a contract between the banks of a buyer and seller?
a letter of credit
The MNEs that are the most active in FDI are in the ________, ________, and ________ industries.
automotive; oil; telecommunications
Which of the following is an efficiency-seeking motive for FDI?
avoiding trade barriers
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 strategy is a company using when goods are exchanged without using money?
batering
Which type of documentation is the actual demand for payment that an exporter issues when a sale is made?
commercial invoice
What is the result when multiple partners venture to collaborate on a large-scale, non-equity project?
consortium
The main reason for global sourcing is ________.
cost efficiency
Lenovo's computers were previously made in China but are now made in North Carolina. What is the advantage of this global sourcing strategy?
cost savings
One of the challenges facing companies that wish to enter the Chinese market is ________.
cultural incompatibility
Which term refers to the cost savings that arise from using a relatively fixed base of managerial talent, facilities, and other company assets across a larger marketplace?
economies of scope
A(n) ________ is a foreign marketdash-based intermediary that is under contract with an exporter and is responsible for taking title to and circulating the exporter's products in a national market.
foreign distributor
A(n) ________ is an intermediary based abroad and contracted by an exporter.
foreign distributor
Dell is a computer company that assembles its computers with parts that are manufactured in companies around the world. For example, Dell uses keyboards made in a Japanese-owned factory in China, an LCD monitor from a factory in South Korea, a motherboard from a Taiwanese company, and memory from a factory in Italy. Dell's manufacturing network best illustrates ________.
global sourcing
Procuring products or services from international suppliers for consumption in the home country or in a third country is called ________.
global sourcing
A(n) ________ is a firm's integrated network of sourcing, production, and distribution, organized on a worldwide scale in locations that maximize a firm's competitive advantage.
global supply chain
A firm has decided against entering into collaborative ventures with other companies. Which of the following arrangements would be possible without collaborating or joining with another firm?
greenfield investment
Which of the following refers to buying foreign products and bringing them into the home country for sale?
importing
Which of the following is frequently included in international sales contracts to indicate how the cost of freight and insurance is shared by the buyer and seller as well as when the buyer takes title to the shipment?
incoterms
________ are used in international sales contracts to specify how the buyer and the seller share the cost of freight and insurance in an international transaction and at which point the buyer takes title to the goods.
incoterms
Which of the following is a risk of global sourcing?
increased transportation and energy costs
Which foreign market entry strategy offers the focal firm the lowest degree of control over foreign operations?
indirect exporting
Walmart has been successful in China because ________.
it sources products locally and provides jobs
Lenovo is now making computers in the United States; this represents a big win for U.S. workers because global sourcing has typically led to ________.
job losses
A(n) ________ is a form of collaboration between two or more firms to create a new enterprise.
joint venture
Products are physically moved through the supply chain through _______, which involves transportation, inventory, and warehousing.
logistics
Some people view global sourcing negatively because of ________.
loss of local jobs
Horizontal integration implies that a company ________.
makes investments in its own industry in order to expand its capacity
Why are firms motivated to do business in China?
market size
A(n) ________ is a special type of acquisition in which two companies join to form a larger firm.
merger
Which of the following involves obtaining value-adding activities, including semi-finished or finished products, from suppliers outside the firm?
outsourcing
To develop positive constructive working relationships, the exporter should provide its intermediaries with ________.
products that offer substantial profits
One of the main advantages of global sourcing is ________.
reducing input costs
Managers most likely seek FDI opportunities when ________.
rivals plan to expand in their home market
The Internet has caused ________ to become the fastest-growing sector of exporting.
services
________ is a firm's integrated network of sourcing, production, and distribution.
the global supply chain
Today, no automaker owns or makes its own parts. So, how does Toyota get suppliers?
toyota has a global supply chian