IB exam #3

Which is the following is NOT a​ business-level strategy? A. A focus strategy B. A growth strategy C. A brand strategy D. A​ low- cost leadership strategy E. A differentiation strategy

A growth strategy

Which of the following statements about a mission statement is​ FALSE? A. The mission statement of an international business depends on the type of business it is​ in, the stakeholders it is trying to​ satisfy, and what is most important to achieving goals. B. The mission statement guides decisions such as which industries to enter or exit and how to compete in chosen segments. C. Mission statements often spell out how a​ company's operations affect its stakeholders. D. A mission statement identifies and selects an​ organization's objectives. E. A mission statement is a written statement of why a company exists and what it plans to accomplish.

A mission statement identifies and selects an​ organization's objectives.

Which one of these type of payments is the most favorable method for exporters and least favorable for​ importers? A. Documentary collection B. Open account C. Revocable letter of credit D. Irrevocable letter of credit E. Advance payment

Advance payment

​_________ is the institutional arrangement by which a firm gets its​ products, technologies, human​ skills, or other resources into a market. A. Indirect exporting B. Direct exporting C. A strategic alliance D. A bill of lading E. An entry mode

An entry mode

Which of the following is NOT a problem associated with primary​ research? A. Language B. Cultural variables C. Unique market conditions and circumstances D. Illiteracy rates among the local population E. Availability of data

Availability of data

Which of the following BEST explains primary market​ research? A. Competitor analysis B. The process of collecting and analyzing original data and applying the results to current research needs. C. The research in which an interviewer asks current or potential buyers to answer written or verbal questions D. The process of obtaining information that already exists within the company or that can be obtained from outside sources E. Data obtained from other countries that are interpreted with great caution

B. The process of collecting and analyzing original data and applying the results to current research needs.

Which of the following is NOT part of the screening process a manager would go through in the selection of an international site A. Assess the national business environment. B. Use telephone surveys. C. Identify basic appeal. D. Select the market or site. E. Measure market or site potential

B. Use telephone surveys.

Which of the following is NOT a contractual entry​ mode? A. Management contracts B. Licensing C. Franchising D. Turnkey projects E. Barter

Barter

Which of the following is NOT a key factor in selecting an entry​ mode? A. Political and legal environments B. Selecting partners for cooperation C. Bill of exchange D. Market size E. Cultural environment

Bill of exchange

Which of the following BEST explains market​ intensity? A. The sensitivity of demand for a product relative to changes in income B. The analysis of a​ nation's economic policies before selecting it as a new market or site for operations C. The wealth or buying power of a market from the expenditures of both individuals and businesses D. ​Nation's total population or the amount of energy it produces and consumes E. The attempts to estimate market​ "openness"

C. The wealth or buying power of a market from the expenditures of both individuals and businesses

________ concentrates decision making at a high organizational level at the corporate headquarters. A. A​ low-cost leadership strategy B. Centralized decision making C. A stability strategy D. A focus strategy E. A global strategy

Centralized decision making

Which of the following is the main drawback of a multinational​ strategy? A. It is designed to guard against change. B. It allows companies to monitor buyer preferences closely in each local market and to respond quickly and effectively to emerging buyer preferences. C. It mixes​ growth, retrenchment, and stability strategies across a​ corporation's business units. D. Companies cannot exploit scale economies in product​ development, manufacturing, or marketing. E. It provides cost savings due to product and marketing standardization.

Companies cannot exploit scale economies in product​ development, manufacturing, or marketing.

Which of the following is NOT an advantage of a joint​ venture? A. Government protections B. Penetration of international markets C. Access to an international distribution network D. Conflict among partners E. Reduced risk

Conflict among partners

Which of the following is an advantage of a strategic​ alliance? A. Conflict B. ​Non-compete clauses in a contract C. Communication and cultural differences D. Creating a competitor E. Cost sharing

Cost sharing

Fujitsu of Japan signed a​ five-year cross-licensing agreement with Texas Instruments of the United States. The agreement allowed each company to use the​ other's technology in the production of its own​ goods, thus lowering research and development​ (R&D) costs. Which of the following is this an example​ of? A. Franchising B. Cross licensing C. Management contracts D. Licensing E. Turnkey projects

Cross licensing

Which of the following is NOT an influence of a target​ market's legal system on the choice of entry​ mode? A. Import​ regulations, such as high tariffs or low quota​ limits, encourage investment. B. Governments may enact laws that ban certain types of investment outright. C. Cultural similarity encourages investment. D. If a market does not enforce copyright and patent​ laws, a company may select an investment entry. E. Low tariffs and high quota limits discourage market entry by means of investment.

Cultural similarity encourages investment.

Managers must analyze a​ nation's economic situation when selecting a new market site. Which of the following is NOT an economic​ consideration? A. Poor fiscal and monetary policies B. Culture C. Liquidity problems D. Transport costs E. Currency problems

Culture

​________ disperses decisions to lower organizational​ levels, such as to international subsidiaries. A. Centralized decision making B. Chains of command C. Decentralized decision making D. ​Value-chain analysis E. Strategy

Decentralized decision making

Which of the following steps is NOT part of the evolutionary path of entry​ modes, with each accepting greater risk and​ control? A. Joint venture and strategic alliances B. Wholly owned subsidiaries C. Exporting D. Developing a strategy E. ​Licensing, franchising, management​ contracts, and turnkey projects

Developing a strategy

Company A is facing slow sales in one national market​ (perhaps due to a​ recession). Which one of the following is a compelling reason for the company to begin​ exporting? A. Diversify sales. B. Increase overall market profitability. C. Gain international business experience. D. Achieve economies of scale. E. Saturate domestic markets.

Diversify sales.

Which of the followings statements does NOT apply to environmental​ scanning? A. The continuous monitoring of events in other locations keeps managers aware of potential business opportunities and threats. B. Environmental scanning cannot help companies develop contingency plans for a particularly volatile environment. C. It is an ongoing process of​ gathering, analyzing, and dispensing information for tactical or strategic purposes. D. Environmental scanning contributes to making​ well-informed decisions and to the development of effective strategies. E. The process obtains both factual and subjective information

Environmental scanning cannot help companies develop contingency plans for a particularly volatile environment.

Which one of the following is a company that exports products on behalf of an indirect​ exporter? A. Export import firm B. Agent C. Export management company​ (EMC) D. Export trading company E. A sales representative

Export management company​ (EMC)

Which of the following statements about franchising is​ FALSE? A. Franchisees can gain organizational flexibility in franchising agreements. B. Franchisers can use franchising as a​ low-cost, low-risk entry mode into new markets. C. Franchising is an entry mode that allows for rapid geographic expansion. D. Franchisers can benefit from the cultural knowledge and​ know-how of local managers. E. Franchising gives a company greater control over the sale of its product in a target market than licensing does

Franchisees can gain organizational flexibility in franchising agreements.

Which one of the following is a contractual entry mode in which one company supplies another company with intangible property and other assistance over an extended​ period? A. Management contracts B. Cross licensing C. Franchising D. Licensing E. Turnkey projects

Franchising

​________ is the sensitivity of demand for a product relative to changes in income. A. Market size B. Market intensity C. Market receptivity D. Market growth rate E. Income elasticity

Income elasticity

Which of the following methods is NOT a means of conducting primary​ research? A. International organizations B. Surveys C. Focus groups D. Environmental scanning E. Trade missions

International organizations

Which of the following is NOT a form of primary market​ research? A. Internet B. Trade missions C. Interviews and focus groups D. Surveys E. Trade shows

Internet

Which of the following is NOT a problem associated with secondary​ research? A. Reliability of data B. Interviews C. Measurement techniques D. Comparability of data E. Availability of data

Interviews

Which of the following is NOT a main source of secondary market​ research? A. Internet B. Service organizations C. Government agencies D. Interviews and focus groups E. Industry and trade associations

Interviews and focus groups

What are the shortcomings of the global matrix​ structure? A. It is​ cumbersome, and individual responsibility and accountability are unclear. B. The matrix structure can increase coordination. C. The global matrix structure increases the efficiency of highly specialized employees. D. The global matrix structure improves communication among divisions. E. This matrix structure can improve agility and local responsiveness.

It is​ cumbersome, and individual responsibility and accountability are unclear.

Which of the following in NOT an advantage of​ licensing? A. Licensees can upgrade their technologies. B. Licensing finances international expansion. C. Licensing might create competitors. D. Licensing helps avoid black market sales. E. Licensing reduces risk.

Licensing might create competitors.

Which of the following is NOT a variable included in​ market-potential analyses? A. Market consumption capacity B. Commercial infrastructure C. Market growth rate D. Logistics E. Market size

Logistics

Which of the following is the collection and analysis of information used to assist managers in making informed​ decisions? A. Consumer panel B. Market research C. Focus group D. Environmental scanning E. Income elasticity

Market research

Rising incomes in a market encourage investment entry modes because investment allows a firm to prepare for expanding market demand and to increase its understanding of the target market. Which one of the following strategic factors influences the selection of the country entry​ mode? A. Infrastructure of the target country B. Strength of rivals C. Joint venture options D. Countertrade options E. Availability of information F. Market size

Market size

If a market is lax in enforcing copyright and patent​ laws, a company may prefer to use investment entry to maintain control over its assets and marketing. Which one of the following strategic factors should the company consider when making the appropriate entry mode​ selection? A. Market size B. International experience C. Political and legal environments D. Production and shipping costs E. Cultural environment

Political and legal environments

Which of the following is NOT a reason to set up production​ locally? A. Gaining a competitive advantage B. When the total cost of production in a market is lower than in the home market C. Political instability D. ​Low-cost local production might encourage licensing or franchising E. When producing goods with high shipping costs

Political instability

What is the disadvantage of a management​ contract? A. A firm can reserve its financial capital. B. Political or social turmoil can threaten​ managers' lives. C. A firm can exploit an international business opportunity without risking assets. D. Governments can use management contracts to upgrade public facilities. E. Management contracts can be used to develop local talent.

Political or social turmoil can threaten​ managers' live

Which of the following is NOT a benefit of a letter of​ credit? A. Requiring an importer to deposit funds B. Payment only upon verification C. Reduced nonshipment risk D. Reduced risk for traders E. Secure form of payment

Requiring an importer to deposit funds

​________ is the process of obtaining information that already exists within the company or that can be obtained from outside sources. A. Primary market research B. Survey C. Competitor analysis D. Secondary market research E. Comparability of data

Secondary market research

When designing the organizational​ structure, managers seek answers to all of the following key questions​ EXCEPT: A. Who should coordinate the activities of different divisions in order to achieve overall​ strategies? B. What is the most efficient method of linking divisions to each​ other? C. How should the company introduce corrective​ measures, and whose responsibility should it be to execute​ them? D. How should information be processed and delivered to managers when it is​ required? E. Should the company evaluate its​ employees?

Should the company evaluate its​ employees?

Which one of the following requires the importer to pay when goods are​ delivered? A. Irrevocable letter of credit B. Revocable letter of credit C. Advance payment D. Sight draft E. Open account

Sight draft

Toshiba of​ Japan, Siemens of​ Germany, and IBM of the United States shared the​ $1 billion cost of developing a facility near​ Nagoya, Japan, to manufacture​ small, efficient computer memory chips. This an example​ of____________. A. Joint ventures B. Licensing C. Strategic alliances D. Management contracts E. Wholly owned subsidiary

Strategic alliances

Which of the following is the set of planned actions taken by managers to help a company meet its​ objectives? A. Strategy B. Planning C. A mission statement D. A stakeholder E. A core competency

Strategy

​________ is the set of planned actions taken by managers to help a company meet its objectives. A. A stakeholder B. A core competency C. A mission statement D. Strategy E. Planning

Strategy

Which of the following statements about a wholly owned subsidiary is​ FALSE? A. Companies can coordinate all national subsidiaries. B. Mangers have complete control. C. It is a facility entirely owned and controlled by a single parent company. D. The risk exposure is low. E. Establishing a wholly owned subsidiary is​ time-consuming.

The risk exposure is low.

Which of the following is NOT a reason for a company to export goods and​ services? A. To gain international business experience B. To expand total sales C. To diversify sales D. To build a wholly owned subsidiary E. To achieve economies of scale

To build a wholly owned subsidiary

For which of the following reasons would a company NOT choose a global​ strategy? A. To cause a company to overlook important differences in buy preferences B. To allow managers to share lessons learned C. To have cost savings due to product and marketing standardization D. To take advantage of location economies E. To take advantage of scale economies

To cause a company to overlook important differences in buy preferences

Why would a firm NOT opt for a global​ strategy? A. To take advantage of economies of scale B. To allow managers to share lessons learned C. To save money because products are standardized D. To take advantage of location economies E. To overlook differences in buyer preferences

To overlook differences in buyer preference

Political and legal forces influence the market and​ site-location decision. Which of the following is NOT an important factor in this​ decision? A. Investment barriers B. Government bureaucracy C. Trade shows D. Government regulation E. Political stability

Trade shows

Which of the following is NOT a common form of investment​ entry? A. Wholly owned subsidiaries B. Strategic alliances C. Turnkey projects D. Forward integration joint ventures E. Joint ventures

Turnkey projects

The Trade Information Center​ (TIC), operated by the​ ________, is a first stop for many importers and exporters. The TIC details product standards in other countries and offers advice on opportunities and best prospects for U.S. companies in individual markets. It also offers information on federal​ export-assistance programs that can be essential for​ first-time exporters. A. Small Business Administration B. U.S. Department of Commerce C. Small Business Development Center D. World Trade Organization E. U.S. Treasury Department

U.S. Department of Commerce

Which of the following is NOT a way to avoid​ export/import blunders? A. Use a freight forwarder. B. Use countertrade. C. Conduct market research. D. Obtain adequate export advice. E. Do not respond to unsolicited requests for products.

Use countertrade.

Which of the following statements does NOT describe a​ value-chain analysis? A. A​ value-chain analysis is the process of dividing a​ company's activities into primary and support activities and identifying those that create value for customers. B. When analyzing primary​ activities, managers aim to decrease the value provided to customers. C. Support activities include business​ infrastructure, human resource​ management, technology​ development, and procurement​ (sourcing). D. Primary activities involve the creation of the​ product, its marketing and delivery to​ buyers, and its​ after-sales support and service. E. Primary activities include inbound and outbound​ logistics, production​ (goods and​ services), marketing and​ sales, and customer service.

When analyzing primary​ activities, managers aim to decrease the value provided to customers.

Under what conditions do companies NOT use centralized decision​ making? A. When they operate in multiple lines of business B. When one​ subsidiary's output is​ another's input C. When a company is purchasing for subsidiaries that use the same inputs D. When they need help in coordinating the operations of international subsidiaries E. When quick local responsiveness is needed

When quick local responsiveness is needed

Which of the following factors do managers NOT consider when analyzing industrialized​ markets? A. Volume of exports and imports of the product B. Whether to use survey research C. Background on the​ market, including population figures and key social trends D. Future outlook for the market and potential opportunities E. Structure of the wholesale and retail distribution networks

Whether to use survey research

Which investment entry mode enables managers to have complete control over​ day-to-day operations in the target market and access to valuable​ technologies, processes, and other intangible properties within the​ company? A. Joint ventures B. Wholly owned subsidiaries C. Turnkey projects D. Franchise agreement E. Strategic alliances

Wholly owned subsidiaries

Canon of Japan purchased expertise in optic technology and developed products based on optic technologylong dash—including cameras and copiers. This is an example of​ ________. A. primary activities B. a core competency C. planning D. support activities E. ​value-chain analysis

a core competency

An exhibition at which members of an industry or group of industries showcase their latest​ products, study activities of​ rivals, and examine recent trends and opportunities is called​ ________. A. logistics B. a trade mission C. a trade show D. secondary market research E. a consumer panel

a trade show

Because companies base organizational structures on​ strategies, changes in strategy usually require​ ________. A. decentralization B. a​ low-cost leadership strategy C. chains of command D. participative management accountability E. adjustments in structure

adjustments in structure

Categories of entry modes include all of the following EXCEPT​ ________. A. an open account B. countertrade C. exporting D. contractual entry E. investment entry

an open account

During its initial forays into international​ business, Walmart found​ ice-fishing huts in its Puerto Rico inventory and no snowshoes at its stores in​ Ontario, Canada. This is an example of NOT determining​ ________. A. market size potential B. market size data C. market consumption capacity D. market receptivity E. basic demand

basic demand

​Export/import financing methods designed to reduce risks include all of the following EXCEPT​ a(n) ________. A. letter of credit B. open account C. documentary collection D. buyback E. advance payment

buyback

​A(n) ________ is a special ability of a company that competitors find extremely difficult or impossible to equal. A. organizational structure B. ​value-chain analysis C. core competency D. focus strategy E. global strategy

core competency

The Internet can be useful for all of the following EXCEPT​ ________. A. seeking information about potential production sites B. going on a trade mission C. saving the time required for a field trip to a potential location D. learning about the culture and economic conditions of possible production sites E. saving the expense of a field trip to a potential location

going on a trade mission

The following are factors that affect the national business environment EXCEPT​ _________. A. home office commitment B. economic and financial forces C. political and legal forces D. cultural forces E. cost of transporting materials and goods

home office commitment

For​ self-managed teams, experts suggest that international managers follow all of the basic guidelines EXCEPT​ ________. A. training local managers at the parent company and allowing them to introduce teams at a time they feel is most appropriate B. using selection tests to identify the employees most likely to perform well in a team environment C. adapting the process of integrating​ self-managed work teams to the national culture of each subsidiary D. ignoring cultural differences when using​ self-managed teams E. adapting the​ self-managed work-team concept to the national culture of each subsidiary

ignoring cultural differences when using​ self-managed teams

Competitor analysis should address all the following issues EXCEPT​ ________. A. income elasticity B. number of competitors in each market C. a​ competitor's control on the channels of distribution D. market share of each competitor E. a​ competitor's focus on high quality or low price

income elasticity

​A(n) ________ creates a separate division with its own manager for international activities. A. global product structure B. global matrix structure C. a work team D. international area structure E. international division structure

international division structure

​A(n) __________creates a division with a manager for international activities. A. international area structure B. global product structure C. global matrix structure D. international division structure E. work team

international division structure

A​ ________ strategy is a strategy of adapting products and their marketing strategies in each national market to suit local preferences. A. multinational B. stability C. retrenchment D. growth E. global

multinational

The documentary collection process can be broken into all the following steps EXCEPT​ ________. A. sending documents to the​ importer's bank B. obtaining a letter of credit C. receiving the bill of lading D. drawing up a draft​ (bill of​ exchange) E. applying for a bill of lading

obtaining a letter of credit

A​ ________ refers to reducing scope of a business. A. growth strategy B. retrenchment strategy C. stability strategy D. global strategy E. multinational strategy

retrenchment strategy

The process of obtaining information that already exists within the company or that can be obtained from outside sources is called​ ________. A. a consumer panel B. a focus group C. environmental scanning D. primary market research E. secondary market research

secondary market research

Potential locations are ranked according to their appeal as a new​ market, taking into consideration all of the following variables EXCEPT​ ________. A. trade missions B. economic freedom C. country risk D. market receptivity E. commercial infrastructure

trade missions

Pointers on what businesses can do to reduce the likelihood of not receiving payment include all the​ following, EXCEPT​ ________. A. consulting an international trade attorney B. gaining market knowledge C. clarifying payment terms D. avoiding countries that pose problems for debt collection E. waiting a long time to begin collecting a​ past-due account

waiting a long time to begin collecting a​ past-due account

​________ decision making concentrates decision making at a high organizational level in one​ location, such as at headquarters.​ ________ decision making disperses decisions to lower organizational​ levels, such as to international subsidiaries. A. ​Standardized, Innovative B. ​Centralized, Decentralized C. ​Traditional, New D. Focus​ strategy, Cost-leadership E. ​Bottom-up, Top-down

​Centralized, Decentralized

Which of the following statements about team structure is​ FALSE? A. Work teams are assigned the tasks of coordinating their efforts to arrive at solutions and implementing corrective action. B. Teams can improve responsiveness by cutting across functional boundaries that slow decision making. C. Globalization is forcing companies to respond more quickly to changes in the business environment through teams. D. In a​ self-managed team, employees assume the responsibilities of their former supervisors. E. ​Cross-functional teams put up barriers between departments and cause conflict.

​Cross-functional teams put up barriers between departments and cause conflict.

A​ __________ is one in which the employees from a single department take on the responsibilities of their former supervisors. A. global team B. ​cross-functional team C. work team D. ​quality-improvement team E. ​self-managed team

​self-managed team