international business test 2

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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


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