Exam 1
Which of the following offers an estimate of the share of annual industry sales that the firm expects to generate in a particular target market?
Company sales potential
Which diagnostic tool helps managers assess the firm's readiness to internationalize?
CORE
As the influence of the Chinese economy grows over time, it is likely that Western countries will embrace some of China's cultural attitudes and behaviors.
True
Countries that liberalize international trade and investment enjoy faster per-capita economic growth.
True
Which one of the following countries is considered an effective gateway country to the central Asian republics?
Turkey
Which of the following provides data, information, search engines and diagnostic tools on a wide range international business topics?
globalEDGE
______ involves the allocation of assets to another country or the attainment of assets in that particular country.
International investment
________ is inspiring quicker dispersion of consumer products and brands across the globe.
International trade
Which term refers to the trend of corporations to methodically expand their worldwide business activities?
Internationalization
Leon's Luxury Clothing, located in Manhattan, designs a line of high end summer apparel for professional men and women. The company is considering opening a location in Brazil. The most likely reason for this international expansion is to __________.
seek opportunities for growth through market diversification
Hong, a manager at Garden Furniture International, is interested in learning about market characteristics and other factors that indicate industry sales potential. Hong should most likely ________.
attend an international trade fair
A researcher who assigns scores to countries for their overall market attractiveness uses ____ to choose the most promising foreign markets.
indexing and ranking
As market globalization intensifies _____.
individual firms respond to the challenges and new advantages that it brings
As market globalization intensifies, ________.
individual firms respond to the challenges and new advantages that it brings
Which one of these describes a strategy that involves a firm's establishing a presence overseas by acquiring productive assets such as land, plants, equipment, capital, and technology?
Foreign direct investment
A company with ________ or fewer employees is defined as an SME.
500
_______ are corporations or individuals with expertise in finance, legal advice, customs clearance, or support services that help firms perform international business transactions.
Facilitators
A SWOT analysis is used to estimate company sales potential for each target market.
False
A corporate culture that advocates profit over sustainability and human welfare cannot lead to employee abuse
False
Which one of the following describes a business arrangement in which one company allows another the right to use its entire business system in exchange for fees and royalties?
Franchising
________ initiate international business activities by envisioning, crafting, and creating goods and services for global buyers.
Focal firms
Which one of the following activities is helpful in estimating industry market potential?
Following key customers into other markets
Although services trade is growing rapidly, the value of merchandise trade is still much larger.
True
Which one of the following companies is in the first stage of the internationalization process, which involves analyzing organizational readiness to internationalize?
A company examining its strengths and weaknesses relative to international business.
When Susan uses known information about one product category to draw conclusions about the potential sales of another product category, because the two are complementary, she is using which one of the following techniques?
A proxy indicator
Which of the following is the least costly way to get input on whether a product or service will sell abroad?
Ask trade partners about the local demand for the product
Juan has been asked to determine how his company's latest technology product may have to be adapted for the Chinese market. Juan is engaged in which task of the Global Market Opportunity Assessment?
Assessing the suitability of the firm's product for foreign market
Managers at ABC International are going through the six stages of defining and pursuing global market opportunities. So far, the managers have determined that the firm is ready to internationalize. What is the next step the managers should take?
Assessing the suitability of ABC's products for foreign markets
Which of the following is a motivation for international expansion?
Being closer to supply sources
_______ risk represents possible losses or failures as a result of poorly developed or implemented business strategies, tactics, or procedures.
Commercial
_______ represents possible losses or failures as a result of poorly implemented business strategies, maneuvers, or processes.
Commercial risk
Juan works for a U.S.-based sports equipment company that wants to expand into Mexico. Juan is calculating an estimate of the share of annual industry sales the firm expects to generate in the Mexican market. In this scenario, what is Juan trying to determine?
Company sales potential
Abbey, a manager at LM Electronics, should utilize which one of the following methods to get a rough estimate of the size of current industry sales in a country?
Conducting a simple trend analysis
________ involves possible adverse effects on operations and profitability due to developments in the political, legal, and economic environments of a foreign country.
Country risk
Lifestyles, customs, and religion have a potential for causing which type of international business risk?
Cross-cultural
Which term refers to the risk of adverse fluctuations in exchange rates?
Currency risk
Which one of the following motivations for international expansion involves expanding overseas in order to grow the customer base and increase the number of products being manufactured?
Developing economies of scale
Which of the following is NOT helpful in estimating company sales potential?
Extensive marketing efforts to test the waters
Which term defines a favorable combination of conditions, places, and timing that offers scenarios for exporting, investing, sourcing, or partnering in foreign markets?
Global market opportunity
Which term refers to the continuing economic assimilation and interdependency of countries across the globe?
Globalization of markets
Which screening method for potential country markets is being utilized when Jasmine starts with 65 prospective target countries and progressively narrows the choices to the top five by examining increasingly specific information?
Gradual elimination
Acme Software (Scenario) Acme Software is a U.S.-based maker of software products for the health care industry. Recently Acme has been investigating whether it would be beneficial to internationalize some of its value-chain activities. Acme hires a consulting group to help determine which, if any, value-chain activities could be conducted abroad to promote business growth. The consulting group identifies two health care software development companies in India that could provide programming services at a lower cost than Acme's current expenditures for programming. In addition, the consultants conduct international market research which shows that German health care companies have a strong demand for the type of software that Acme offers. Which of the following would be most important for the consulting group to consider when deciding whether to recommend that Acme internationalize its sales efforts to Germany?
How intense is the competition from German companies offering similar products?
Based on her studies of international business, Yolanda Sanchez decides to buy paper for her office supply store from wood grown in sustainable forests in Canada, even though the sustainable paper costs more than other paper. Considering the reasons to study international business, which of the following best explains Yolanda decision?
Implementing corporate citizenship efforts
Which one of these factors is driving global economic transformation?
Industrialization in fast-growth developing economies
Which of the following offers an estimate of the likely sales for all firms in a particular business sector in a given period?
Industry market potential
Your roommate is uncertain about a college major. Knowing that she is passionate about social and environmental causes, you suggest that she major in international business. When she graduates and works for a large company, you assert that she will be able to influence the company's actions as they affect society and the environment. Which one of the following reasons for studying international business are you advocating?
International business supports sustainability and corporate citizenship.
Which of the following refers to a cross-border business alliance whereby two or more firms share resources, expenses, and risks to start a new business?
International collaborative venture
Which one of the following is NOT a characteristic of CORE?
It tracks how political, economic, and regulatory changes affect the FDI preferences of the world's top 1,000 firms.
Acme Ethical Standards (Scenario) Four senior managers of Acme International meet to discuss strategies for improving ethical practices in the company's worldwide operations. Jang heads the company's manufacturing division in China, while Luis and Marta are based in the Finland and U.S. sales divisions, respectively. Geoff manages the research and development office, based in Brazil. The managers discuss various ethical problems commonly encountered in their local territories. Which of the following representatives is most likely to label counterfeiting of goods as the biggest challenge in his/her country?
Jang
A computer company has agreed to sell its intellectual property in exchange for royalties to a foreign firm that makes laptops. What kind of arrangement does this situation illustrate?
Licensing
A country's population is referred to as _____.
Market Size
Of the variables used to in the Market Potential Index, which of the following refers to the size and growth rate of the country's middle class?
Market consumption capacity
Which variable of the Market Potential Index is determined by consumer expenditures and the income share of the middle class?
Market consumption capacity
Which variable in the Market Potential Index refers to the buying power of a country's residents?
Market intensity
When estimating company sales potential in a foreign market, which one of the following determines the speed at which market entry occurs?
Market penetration timetable
Noor is assigned the duty of assessing industry market potential in a few possible target countries, but he is not confident he knows how to go about doing this. He has come to you for advice. What do you tell Noor to do?
Monitor the activities of key competitors in the target countries.
According to the Emerging Market Potential indicators index, _____ is an indicator of market intensity.
Private consumption as a percentage of GDP
A U.S. manufacturer of automatic car wash equipment has seen its U.S. sales decline. The manufacturer decides to expand into Mexico and Canada. This is an example of which one of the following motivations for international expansion?
Pursuing prospects for growth through market diversification.
Which one of the following statements is most likely true?
Risks cannot be avoided, but they can be managed and anticipated.
_______ is considered a gateway country to Southeast Asian markets.
Singapore
Vineeta and her fellow senior managers are using CORE as a diagnostic tool. They are answering questions about their company's organizational resources, skills, and motivation. After reviewing their answers, they decide to pursue a global market opportunity. On which stage of this internationalization process are Vineeta and her colleagues focusing their efforts?
The first stage: analyzing organizational readiness to internationalize
Which one of the following factors best explains why trade growth has outperformed GDP growth over the years?
The liberalization of markets.
Samer is a manager in a U.S.-based company. He is attending an industry trade fair in China to interview prospective customers and distributors to determine how well his company's product is likely to sell in a Chinese market. Samer is asking questions regarding who will initiate the purchase of his company's products, who uses the products, and where people in China purchase products like the ones Samer's company makes. On which stage of the pursuit of internationalization is Samer focusing his efforts?
The second stage: assessing the suitability of the firm's product for foreign markets
Managers of Best Tools are concerned about whether their products are suitable for the overseas market. The products with the best international prospects would tend to have which one of the following characteristics?
They should serve a universal need for foreign consumers.
Which of the following is a motive for international expansion?
To stay close to supply sources.
Which of the following is NOT a motive for firms to internationalize?
To supplement unemployment in the domestic market by fostering foreign talent.
Acknowledging the presence of an ethical problem is the first step of the framework for arriving at ethical decisions.
True
Jason is engaged in a formal analysis of ABC International's preparedness to internationalize. Addressing which one of the following questions will help Jason ensure overcoming the channel members' frustration with ABC to fulfill customer orders abroad due to inadequate capacity?
What demands will internationalization place on ABC's resources, such as management marketing, production, and finance?
To expand awareness about the international market prospects of a product, Jason at ABC International should obtain an answer to which one of the following questions?
Who initiates purchasing of ABC's products?
When a researcher uses data about one country to gain insights about the same phenomenon for another, similar country, the researcher is using a(n) ________.
analogy
A newly established corporation that begins international business activity very early in its development, allowing it to move promptly into overseas markets, is called a ________.
born global firm
For the U.S. economy, international trade is a critical element that generates one of every seven dollars of U.S. sales. This fact supports the idea that studying international business ________.
contributes to the health of the U.S. economy
For some jobs, traveling the world and meeting people from various cultures and backgrounds facilitates career growth. In such cases, studying international business is most likely ________.
creating a competitive advantage for an individual
A ________ is a professional company that offers logistics and marketing services for focal firms as part of worldwide supply chains.
distribution channel intermediary
According to relativists ________.
ethical truths differ from group to group
Assets such as technology, capital, and managerial talent are known as ________.
factors of production
Businesses that directly initiate international business transactions are known as _____.
focal firms
Delhi Fast Food, an Indian fast food company, recently signed a deal that allows its name and menu to be used by a U.S. operator in exchange for royalties and other financial compensation. This is an example of ________.
franchising
Global sourcing and contract manufacturing are examples of ________.
international collaborative ventures
All of the following are reasons to study international business EXCEPT _____.
international trade and investment have experienced unprecedented decline
A business arrangement where one company grants another the right to use intellectual property for a stated period of time in exchange for royalties is called ________.
licensing
A(n) ________ is a large corporation with significant resources that executes countless business activities through a system of subsidiaries and affiliates located in various countries.
multinational enterprise
An underground economy ______.
refers to the informal economic sector
When a domestic firm seeks opportunities in foreign markets, the firm's motive is best described as ________.
strategic
According to the virtue approach ______.
the best action emphasizes moral excellence and righteousness that provide for the full development of our humanity
A favorable global market opportunity for a firm would most likely lead to _____.
the establishment of a production facility
A value chain is _______.
the sequence of value-adding activities performed by the firm in the course of developing, producing, marketing, and servicing a product