IB FInal(1)
Which scenario demonstrates the concept of guanxi?
A Chinese businessman would not commit to a project with an American company until he established a relationship with the local representative.
Matmann Floor Coverings didn't feel it would be successful in the foreign market because all of the countries it wanted to enter had tight price controls on the products the company produced. Which aspect of segment screening would reveal this to the company?
Actionable
The WTO has made progress on trade-related intellectual property rights (TRIPS). An example of this progress is
An agreement that property rights should not take precedence over public health
Why is scenario analyses an important tool for managers?
By anticipating the future and recognizing the warning signs of turbulence ahead, managers can develop more effective strategies
What is the Incoterm for the situation when carriage and insurance are paid to a specified destination, while risk passes to the buyer when the goods are handed to the carrier
CIP
The Incoterm for the situation when carriage is paid to a specified destination, the seller pays for carriage, while risk passes to the buyer when the goods are handed to the carrier is
CPT
What is a downside of flexible manufacturing?
Changes in the production line cost money.
What is the Incoterm for the situation where the product is delivered at the specified destination, and the seller pays for carriage to the named place and assumes all risk until goods are unloaded?
DAP
What is the Incoterm for the situation where the product is delivered at the specified destination and the seller pays for carriage to the named place, as well as all duties, taxes, and custom charges?
DDP
Most of what is contained in a sales agreement is the same in the contract for a domestic representative as for an export sale. However, what is one of the two areas requiring special attention in an export sales contract?
Designation of the country and state or province whose laws will govern any contractual dispute
The Incoterm for the situation when the seller hands over goods to a carrier at a specified place where risk passes to the buyer, is
FCA
What is the Incoterm for the situation where the seller loads the goods onto the ship and the risk passes to the buyer once they are aboard the ship
FOB
Which unit of the International Trade Administration promotes the trade interests of U.S. industries by helping shape industry-specific trade policies and promotion strategies, including trade missions, fairs, and seminars?
Industry and Analysis Unit
Incoterms are developed and maintained by the
International Chamber of Commerce
What is a characteristic of a geocentric staffing policy?
It selects the best person for each job, without considering national origin
Kenneth thought the company should promote the new product in foreign markets by having a contest in which the winner would receive a one-year supply of the product. Which type of advertising strategy is Kenneth suggesting?
Kenneth thought the company should promote the new product in foreign markets by having a contest in which the winner would receive a one-year supply of the product. Which type of advertising strategy is Kenneth suggesting?
Is the WTO's idea of "fair competition" really a code phrase for free trade?
Not really. Trade relationships...
Urban Necessities is planning its promotional strategy as it enters the foreign marketplace. The company's line of clothing serves the same function around the world so it can be promoted in the same way. However, the company will need to make slight changes to some of the clothing to meet local customer needs. Which promotion strategy should the company use?
Product adoption-same message
Why does McDonald's use the color hunter green as the background for its golden arches logo in Europe when it uses red in the United States?
The green is viewed as eco-friendly
Which organization provides an acquisition support program that searches for suitable acquisitions in foreign locations?
U.S. Department of Commerce
Which private sector organization is active in 91 countries and provides networking opportunities and an online trading system?
World Trade Centers Association
The main difference between a free trade area and a customs union is that in a customs union, there is
a common external tariff
A policy of hiring and promoting based on ability and experience without considering race or citizenship is
a geocentric policy
Hilton Hotels provides management for foreign hotels that use the Hilton name. What is this an example of?
a management contract
International strategy can be described as
a plan that guides the way firms makes choices about developing and deploying resources.
Con-Tractors Inc. decided not to conduct business in some parts of South America after it learned that governments hold all imports for up to 18 months before releasing to the importing country. What aspect of segment screening fostered this decision?
accessible
The ITA's Global Markets Unit specialists seek to provide which service to U.S. firms?
advocacy for market access
A policy of hiring and promoting based on the parent company's home-country frame of reference is
an ethnocentric policy
An example of a political force of concern in market screening is
an import quota
Which item is least likely to be a cost of importing for a company?
an international sales force
During the strategic planning discussion, committee members reviewed the current systems in place in the company's manufacturing plant to determine if it could handle the anticipated increased capacity should the company go through with the foreign investment. Which step in the strategic planning process does this reflect
analyze the company's internal environment
In the market screening process, a personal visit to a market is meant to
appraise the suitability of the company's current marketing mix
Regarding a sustainable competitive advantage, the company must have skills or competencies that
are difficult to imitate or substitute for
In a free trade area, members drop internal tariffs. External tariffs
are maintained independently by each member
ISO 9000 is used
as a set of five universal standards for a quality assurance system agreed to by the International Organization for Standardization (ISO)
The output of a synchronized manufacturing system is set
at the output of the slowest operation that is working at full-capacity
During the initial screening process, Carlock Inc. decided not to pursue activity in South America because consumers weren't interested in purchasing high-end door locks for their automobiles. What was Carlock assessing in the initial process?
basic needs potential
The major motivation for immigration is a
better economic situation
Developing nations are greatly concerned when highly-skilled professionals such as scientists, IT specialists, teachers, and health care professionals leave the country to seek better living arrangements. What term is given to this type of emigration?
brain drain
Green Turf Lawn Corp. developed a product that eliminates weeds with just one application. The company has been overwhelmed by the number of new markets asking for the product and has to find a way to create groups with common characteristics that it can market to. What can the company use to achieve this?
cluster analysis
The ability to ship products quickly may mean that
companies don't need to rely on the traditional distribution structures
a company's ability to achieve and maintain a unique and valuable competitive position both within a nation and globally, generating higher rates of profits than competitors, is known as
competitive advantage
Action plans to enable organizations to reach their objectives are known as
competitive strategies
Which item or service is least likely to be included within indirect procurement?
components
To be effective, a company's international strategy must be
consistent among all the functions and activities of the company
Dun & Bradstreet, the Finance, Credit, and International Business Association (FCIB), and the exporter's bank analyzes all sources of
credit information
The need to change the color of packaging when selling a product in a new market is generally a result of the influence of
cultural differences
To develop a strategy for reaching corporate objectives, management must first try to
define the firm's mission
Most of what is contained in a sales agreement is the same in the contract for a domestic representative as for an export sale. However, what is one of the two areas requiring special attention in an export sales contract?
designation of responsibilities for patent and trademark registration
When considering international advertising efforts, a company that adopts a "glocal" approach is
developing a cost-effective common strategy for large regions
Milo Millworks Inc. has maintained a sustainable competitive advantage for its framing style. In order to accomplish this, the framing style must be
difficult to substitute for
The executives from the Japanese company did not like the advertisement created by the U.S. agency. The executives said that telling the consumers about the benefits of the product was too pushy and would be viewed as arrogant. Which cultural dimension are the executives concerned with?
directness
Fairway Golf Inc. traditionally received a telephone order for its products and shipped them out. Since the packaging was bulk, customers would receive their order in about three weeks. The company has recently promoted overnight delivery service and find that most customers are willing to pay the price for this faster shipping method. What trend does this represent?
disintermediation
Once a firm has determined there is a need for the firm's products in a foreign market, the next step is to
draft the export marketing plan
Environmental scanning is mostly used
during the planning process to assess world threats
One reason manufacturers are using global advertising is because identical products are easier to make which allows the company to take advantage of
economies of scale
WTO agreement on TRIPS had led to member agreement to
enforce 20-year patents and 50-year copyrights
Outsourcing has become an increasingly common option for companies because it Which activity represents an extension of the make-or-buy decisions of earlier eras?
enhances flexibility and improves speed of response
Companies in which there is little pressure to reduce costs or adjust for local responsiveness and where most decisions are made using the home country's frame of reference have adopted which type of staffing policy?
ethnocentric
Knowledge that is easy for an individual to express clearly in words, pictures, or formulas is known as
explicit
Companies that use a polycentric staffing policy would
face pressures for local responsiveness
When a company faces strong pressures for reducing costs and limited pressure to adapt products for local markets, it should consider using a
global strategy
Generally, as marketers go down the economic and social strata in each country, they will tend to find
greater dissimilarities among countries in social and cultural values
Companies pursuing a multidomestic strategy typically have
high levels of local market customization
Quick Stop Fashion House produces "fast fashion" clothes that represent the current fad. In the foreign environment, this type of product is considered
highly sensitive
High-Rise Boots Corp. plans to expand into the European market where it finds weak pressure to respond to local demands and cost reductions are not necessary. Which competitive strategy should the company use based on these factors?
home replication strategy
A drawback of ethnocentric staffing policies is that
home-country employees may not have experience with the languages and culture of the host country
Economic Integration often progresses
in stages, from free trade area to customs union to common market.
As Corrine's business grew, it struggled to keep up with the maintenance and repair of her products, so she started buying these services from another company. This is called
indirect procurement
The continuum from insensitive to sensitive to foreign environment begins with ________ and ends with ________.
industrial products; high style and faddish consumer products
Computer memory chips are the same everywhere in the world. This means they are ________ to the foreign environment.
insensitive
Companies whose manufacturing processes are not unified have found that a current separate set of specifications for each affiliate
is costly and error prone
Many American manufacturers made the mistake of rushing to copy parts of Japan's just-in-time production system without realizing that
it is a total system that focuses on management of people, materials, and relationships inside the company and with suppliers
Country screening differs from segment screening in that
it looks at the country level, while segment screening is within a country
The practices that organizations and their managers use for identifying, creating, acquiring, developing, dispersing, and exploiting competitively valuable knowledge is known as
knowledge management
How does Starbucks adapt the design of its stores to local conditions in China?
large tables and movable furniture
Jet Spray Water Equipment Corp. decided to pull out of doing business in Europe when it learned that some governments required more than 50 percent of the product be made in that country. Which foreign environmental force is causing the company to make this decision?
legal
Frank is responsible for getting raw materials to sites where they can be used to produce the finished goods. Frank works in the area of
logistics
A just-in-time supply chain requires
materials and parts to arrive at each point in the production process when they are needed
Worldwide, labor tends to be
mobile
An equity-based entry mode means that a company faces ________ risk and ________ control.
more; more
The economic integration of the EU is based on
national willingness to forego sovereignty in some areas.
Which of these is one of the 12 most common mistakes and pitfalls awaiting new exporters listed in the textbook?
not treating international distributors on an equal basis with domestic counterparts
Joe's Jumpers has always made its clothing in the United States, but as prices have gotten more competitive it has had to move some of its production to China. This demonstrates
offshoring
Industry-based B2B exchanged can create value with
optimized supply chains across an entire network of organizations
Prada's employees were overwhelmed with work, so she sent some accounting functions to India and kept the rest in-house. Prada was engaging in
outsourcing
Which activity represents an extension of the make-or-buy decisions of earlier eras?
outsourcing
Which outsourcing arrangement is common in the clothing industry
overseas independent contractor
Managers generally mention three areas in which they lack knowledge related exporting, including identification of foreign markets, export procedures, and
payment and financing procedures
Generalizations about TCNs are difficult because
people achieve the TCN status in different ways.
Electronic procurement exchanges can
permit bid/quote systems
Which products are especially influenced by laws that regulate product ingredients and labeling?
pharmaceuticals
Gibson Baking Company sells its brownie mixes all over the world. The company includes directions on the package for baking the product at high altitude levels since this can affect baking times. Which type of environmental force caused this decision?
physical
Market screening is used by a company to
pinpoint the most attractive approach
A turnkey project includes
plant design and technology supply.
Local content restrictions are an example of a
political and legal force
The staffing policy at Super Food International is based on the specific local context in which the company's subsidiaries operate. What type of staffing policy does this reflect?
polycentric
Relatively low levels of authority and decision making in headquarters is associated with
polycentric staffing
A manager from a U.S. company is negotiating with a Japanese company for goods. What is most likely to be the American's most important criteria in the purchasing decisions?
price
Donaldson Equipment Corp. began marketing in parts of Europe last year. It has found that the best way to reach its customer base is by placing advertisements on the sides of concrete trucks..
promotion
Following the oil tanker spill, E-Source Energy Company needed to foster goodwill with its foreign consumers. The company launched a campaign that showed the cleanup efforts and new technologies that would prevent future disasters. What type of global advertising strategy was the company using?
public relations
If exporting turns out to be unfeasible because of import restrictions or insufficient human or financial resources but the firm still wants to sell its products overseas, the firm should consider
pursuing licensing or joint venture agreements
It has been argued that the ultimate goal of effective supply chain management systems is to
reduce inventory
Casey Conglomerates only hires regional employees to fill key positions in host countries. What type of staffing policy is the company using
regiocentric
The European Union is organized into nine institutions with functions similar to those performed by a national government. These institutions
represent the people of Europe and member-states
Elizabeth is a highly sought after scientific researcher.... demonstrates the idea of
reverse brain drain
The WTO is the only international organization designed to establish and help implement
rules of trade between nations
During the past century, there has been a noticeable shift in the workforce from
rural to urban settings
What is a good promotional strategy to use when target markets vary little in regard to product use and consumer attitudes?
same product-same meanings
Multiple, plausible stories that managers consider for what might happen in the future are known as
scenarios
Automobiles, Inc. implemented B2B electronic commerce, but it ran into a problem when one of its suppliers accidentally leaked the details of its pricing and inventory to a competitor. What did Automobiles, Inc. fail to consider?
security
The EU's impact on international business is
significant, since EU standards, especially in the areas of the environment and sustainability, impact any firm that wants to do business in the EU.
Which of these products would be easiest to assess the basic needs potential of a market?
snow shovel
Callie lives in Europe and received a survey in the mail from a U.S. company wanting to know how her family used disposable paper towels. Callie never uses paper towels but she doesn't want to reveal that in the survey so she answers the questions to please the company. Callie's response is an example of
social desirability bias
Signature Appliance Group decided to remove the grill unit from the ovens it sells in South America after customers complained they preferred to grill outside and would never use this feature. Which environmental force caused the company to change its product?
sociocultural
Knowledge that an individual has but that is difficult to express clearly in works, pictures, or formulae, and therefore difficult to transmit to others is known as
tacit
The New Development Bank, headquartered in Shanghai, China was formed by
the BRICS group
What global membership institution provides information on economic and other activities within its member-nations and serves as a forum for discussion of shared economic and social policy issues, including publishing research on international business?
the Organization for Economic Co-Operation and Development (OECD)
Which nonmember country of the EU uses the euro as its official currency?
the Vatican
When the international company's planning committee has completed the internal audit aspect of strategic planning, it is ready to examine
the company's mission and vision
What is the motivation behind brain drain?
the desire to seek improved economic situations
The idea that WTO members treat all members equally is known as
the most favored nation (MFN) principle
A local labor market is made up of
the pool of available employees with the necessary skills and who are within commuting distance.
International Development Association's purpose is to loan to
the poorest nations
FOB (free on board) means that
the seller loads the goods on board the ship identified by the buyer and clears them for export, and both cost and risk then transfer to the buyer
A polycentric staffing policy is appropriate when
there are low levels of pressure for cost reduction and high levels for local responsiveness
A drawback of polycentric staffing policies is that
there can be a conflict of loyalty between the host country and the employer
At Mighty-Tuf Industrial Products Group, 30 percent of its employees are neither a citizen...
third-country nationals
What is the goal of value chain analysis?
to enable managers to identify which set of activities it will do itself and which it will outsource
The Doha Round began in 2001 to work on what agenda?
trade-related issues between developed and developing countries
Rather than try to find an existing facility to purchase, Barton Manufacturing Group decided to hire a company to build a manufacturing facility in the overseas market that would erect the plant, supply the process technology, train personnel, and conduct a trial run of operations. Once that was complete, the facility would be turned over to Barton ready to use. What form of entry does this represent?
turnkey operation
A clear, concise description of the fundamental beliefs and priorities expected of the organization's members, reflecting how they are to behave with each other and with the company's customers, suppliers, and other members of the global community is known as a
values statement
A description of the company's desired future position if it can acquire the necessary competencies and successfully implement its strategy is known as a
vision statement
Incoterms describe three issues that arise in a commercial transaction, including
which party covers the costs
Does the IMF lend money?
yes, but as a last resort