MKT 3500 Chapter 13

Licensing is NOT attractive to which of the following firms?

Firms requiring tight control of operations for realizing experience curve and location economies

Which of the following modes of entry is suitable for service firms where the risk of losing control over the management skills or technological know-how is not much of a concern, and where the firms' valuable asset is their brand name?

Franchising

If a firm is considering entering a country where incumbents exist, and if the competitive advantage of the firm is based on the transfer of organizationally embedded competencies, skills, routines, and culture, what would be the preferable mode of entry?

Greenfield Venture

Which of the following is an advantage of joint ventures as a mode of entry into foreign markets?

The foreign firm benefits from a local partner's knowledge of the host country.

Which of the following is an advantage of franchising as a mode of entry into foreign markets?

The franchiser is relieved of many of the costs and risks of opening a foreign market on its own.

Which of the following is true of the costs and risks associated with doing business in a foreign country?

They are lower in economically advanced nations

Which of the following is an example of an industry in which cross-licensing agreements are increasingly becoming common?

Biotechnology

According to Christopher Bartlett and Sumantra Ghoshal, how can local companies differentiate themselves from foreign multinationals?

By focusing on market niches

Axiom International, an Australian company, wants to expand its operations to China, a country that is politically, culturally, and economically different. The firm needs to select a mode of entry that would give it access to local knowledge, allow sharing of development costs and risks, and also be politically acceptable. Which of the following modes of entry into foreign markets is most suitable for Axiom International?

Joint venture

Which of the following entry modes into a foreign market best serves a high-tech firm?

Wholly owned subsidiaries

In exporting, problems with local marketing agents can be overcome by:

setting up wholly owned subsidiaries in foreign nations to handle local marketing.

Turnkey projects being short-term propositions can be disadvantageous for a firm if a country subsequently proves to be a major market for the output of the process that has been exported. The firm can get around this problem by:

taking a minority equity interest in the operation.