Global Ch 11-14 +16
_________ is the institutional arrangement by which a firm gets its products, technologies, human skills, or other resources into a market.
A. A bill of lading B. A strategic alliance C. Direct exporting D. Indirect exporting E. An entry mode E
Which of the following statements about brands is FALSE?
A. A brand name is the name of one or more items in a product line that identifies the source or character of the items. B. Products in international markets need carefully selected product brand names. C. Companies need to review the image of their brand and update it if necessary. D. A strong brand can become a company's most valuable asset and primary source of competitive advantage. E. The value of a brand is not influenced by the image of the country in which it is manufactured. E
Which is the following is NOT a business-level strategy?
A. A differentiation strategy B. A low-cost leadership strategy C. A focus strategy D. A brand strategy E. A growth strategy E
________ concentrates decision making at a high organizational level at the corporate headquarters.
A. A global strategy B. A low-cost leadership strategy C. A focus strategy D. A stability strategy E. Centralized decision making E
________ is the set of planned actions taken by managers to help a company meet its objectives.
A. A mission statement B. Planning C. Strategy D. A stakeholder E. A core competency C
________ comprises a company's efforts to reach distribution channels and target customers throughcommunications, such as personal selling, advertising, public relations, and direct marketing.
A. A push strategy B. International advertising C. A distribution system D. A pull strategy E. The promotion mix E
Which one of the following requires the importer to pay when goods are delivered?
A. Advance payment B. Open account C. Irrevocable letter of credit D. Sight draft E. Revocable letter of credit D
Which one of the following is a company that exports products on behalf of an indirect exporter?
A. Agent B. Export trading company C. A sales representative D. Export management company (EMC) E. Export import firm D
Not all companies need to modify their product to the culture; instead, they may need to identify a different cultural need that it satisfies. Which company, cited in the book, was able identify a different use for its product in the U.S.?
A. Altoids B. Häagen-Dazs C. Honda D. Clark Shoes E. Lipton A
A parent company often licenses technologies to its subsidiaries in return for royalties or licensing fees. Subsidiaries prefer this route to buying on the open market because they typically receive lower prices. Parent companies then buy finished products from subsidiaries at the stated price. Which price strategy does the parent company use?
A. Arm's length price B. Worldwide pricing C. Transfer prices D. Dual pricing E. Price escalation C
________ is a pricing policy in which one selling price is established for all international markets.
A. Arm's length pricing B. Price controls C. Worldwide pricing D. Dual pricing E. Transfer pricing C
Which of the following factors do managers NOT consider when analyzing industrialized markets?
A. Background on the market, including population figures and key social trends B. Volume of exports and imports of the product C. Future outlook for the market and potential opportunities D. Structure of the wholesale and retail distribution networks E. Whether to use survey research E
Which of the following is NOT a contractual entry mode?
A. Barter B. Franchising C.Licensing D.Turnkey projects E.Management contracts A
Which of the following is NOT a key factor in selecting an entry mode?
A. Bill of exchange B. Selecting partners for cooperation C. Political and legal environments D. Market size E. Cultural environment A
Factors that influence the standardize-versus-adapt decision do NOT include which of the following?
A. Companies must adapt their products to satisfy laws and regulations in a target market. B. Many developing countries have fewer consumer protection laws. C. Companies adapt their products to suit local preferences, which are rooted in culture. D. Companies can use worldwide pricing. E. Companies may need to identify a different cultural need that their product satisfies. D
Which of the following is NOT a reason that product life cycles are shorter?
A. Companies traditionally introduced new products in different markets consecutively. B. Companies introduced products in industrialized countries and later marketed them in developing and emerging markets. C. Consumers in developing and emerging markets demand the latest products. D. While a product's sales are declining in one market, they might be growing in another. E. The rapid pace with which technological innovation occurs today is lengthening the life cycles of products. E
Which of the following is NOT a problem associated with secondary research?
A. Comparability of data B. Reliability of data C. Availability of data D. Measurement techniques E. Interviews E
________ is the process of obtaining information that already exists within the company or that can be obtained from outside sources.
A. Competitor analysis B. Secondary market research C. Primary market research D. Survey E. Comparability of data B
Which of the following is a form of primary market research?
A. Competitors' financial statements B. Trade magazines C. Exit interviews D. Internet E. Trade shows E
Which of the following is an advantage of a strategic alliance?
A. Cost sharing B. Communication and cultural differences C. Creating a competitor D. Conflict E. Non-compete clauses in a contract A
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. Cross licensing B. Franchising C. Licensing D. Management contracts E. Turnkey projects A
Which of the following statements about team structure is FALSE?
A. Cross-functional teams put up barriers between departments and cause conflict. B. In a self-managed team, employees assume the responsibilities of their former supervisors. C. Globalization is forcing companies to respond more quickly to changes in the business environment through teams. D. Teams can improve responsiveness by cutting across functional boundaries that slow decision making. E. Work teams are assigned the tasks of coordinating their efforts to arrive at solutions and implementing corrective action. A
Which of the following statements about a country's national image is FALSE?
A. Customers value a product based on the image of the country in which it is designed, manufactured, or assembled. B. National image is not an important element of product policy. C. A national image can be positive for some products but negative for others. D. National image changes over time. E. National image affects perceptions of quality. B
________ refers to planning, implementing, and controlling the physical flow of a product from its point of origin to its point of consumption.
A. Distribution channels B. Distribution C. Intensive channel D. Channel members E. An exclusive channel B
Which of the following steps is NOT part of the evolutionary path of entry modes, with each accepting greater risk and control?
A. Exporting B. Developing a strategy C. Joint venture and strategic alliances D. Wholly owned subsidiaries E. Licensing, franchising, management contracts, and turnkey projects B
Which of the following is the collection and analysis of information used to assist managers in making informed decisions?
A. Focus group B. Environmental scanning C. Income elasticity D. Market research E. Consumer panel D
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. Franchising B. Licensing C. Cross licensing D. Management contracts E. Turnkey projects A
When designing the organizational structure, managers seek answers to all of the following key questions EXCEPT:
A. How should the company introduce corrective measures, and whose responsibility should it be to execute them? B. Who should coordinate the activities of different divisions in order to achieve overall strategies? C. What is the most efficient method of linking divisions to each other? D. Should the company evaluate its employees? E. How should information be processed and delivered to managers when it is required? D
Which of the following political and legal factors may discourage market entry by means of investment discourage companies to invest in a target market?
A. Import regulations B. Weak enforcement of laws promoting foreign investment C. High tariffs or low quota limits D. Low quota limits laws that E. Low tariffs and high quota limits E
Which of the following statements about channel length is FALSE?
A. In a zero-level channel—which is also called direct marketing—producers sell directly to final buyers. B. Channel length refers to the number of intermediaries between the producer and the buyer. C. The greater the number of intermediaries in a channel, the less costly it becomes. D. A one-level channel places only one intermediary between the producer and the buyer. E. Each additional member adds a charge for its services onto the product's total cost. C
________ is the sensitivity of demand for a product relative to changes in income.
A. Income elasticity B. Market growth rate C. Market receptivity D. Market size E. Market intensity A
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. Increase overall market profitability. B. Saturate domestic markets. C. Achieve economies of scale. D. Diversify sales. E. Gain international business experience. D
Which of the following is NOT a main source of secondary market research?
A. Industry and trade associations B. Internet C. Government agencies D. Service organizations E. Interviews and focus groups E
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. International experience B. Political and legal environments C. Market size D. Cultural environment E. Production and shipping costs B
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. Political stability C. Government regulation D. Trade shows E. Government bureaucracy D
Which of the following is the main drawback of a multinational strategy?
A. It allows companies to monitor buyer preferences closely in each local market and to respond quickly and effectively to emerging buyer preferences. B. It mixes growth, retrenchment, and stability strategies across a corporation's business units. C. It is designed to guard against change. D. It provides cost savings due to product and marketing standardization. E. Companies cannot exploit scale economies in product development, manufacturing, or marketing. E
Which of the following statements about a wholly owned subsidiary is FALSE?
A. It is a facility entirely owned and controlled by a single parent company. B. Mangers have complete control. C. Companies can coordinate all national subsidiaries. D. Establishing a wholly owned subsidiary is time-consuming. E. The risk exposure is low. E
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. Joint venture options B. Infrastructure of the target country C. Availability of information D. Strength of rivals E. Market size F. Countertrade options E
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 exampleof____________.
A. Joint ventures B. Strategic alliances C. Management contracts D. Wholly owned subsidiary E. Licensing B
Which of the following is NOT a problem associated with primary research?
A. Language B. Illiteracy rates among the local population C. Unique market conditions and circumstances D. Cultural variables E. Availability of data E
Which of the following statements about distribution channels is FALSE?
A. Managers are concerned with the amount of exposure a product needs when establishing a distribution channel. B. An intensive channel provides buyers with location convenience because of the large number of outlets through which a product is sold. C. Large companies selling products through grocery stores and department stores use exclusive channels of distribution. D. An exclusive channel helps a producer to constrain distributors from selling competing brands. E. An exclusive channel gives producers a great deal of control over the sale of their product by wholesalers and retailers. C
Which of the following is NOT a variable included in market-potential analyses?
A. Market size B. Market consumption capacity C. Logistics D. Market growth rate E. Commercial infrastructure C
________ is planning, implementing, and controlling the physical flow of a product from its point of origin to its point of consumption.
A. Marketing communication B. Pull strategy C. International advertising D. Distribution E. An exclusive channel D
Which of the following is NOT a way to avoid export/import blunders?
A. Obtain adequate export advice. B. Do not respond to unsolicited requests for products. C. Use countertrade. D. Conduct market research. E. Use a freight forwarder. C
Which of the following is NOT an advantage of a joint venture?
A. Penetration of international markets B. Conflict among partners C. Reduced risk D. Access to an international distribution network E. Government protections B
Which of the following statements does NOT describe a value-chain analysis?
A. Primary activities include inbound and outbound logistics, production (goods and services), marketing and sales, and customer service. B. When analyzing primary activities, managers aim to decrease the value provided to customers. C. Primary activities involve the creation of the product, its marketing and delivery to buyers, and its after-sales support and service. D. 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. E. Support activities include business infrastructure, human resource management, technology development, and procurement (sourcing). B
Which one of these type of payments is the most favorable method for exporters and least favorable forimporters?
A. Revocable letter of credit B. Advance payment C. Documentary collection D. Open account E. Irrevocable letter of credit B
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 thecompany?
A. Strategic alliances B. Joint ventures C. Wholly owned subsidiaries D. Franchise agreement E. Turnkey projects C
Which one of the following BEST explains market intensity?
A. The attempts to estimate market "openness" B. The sensitivity of demand for a product relative to changes in income C. The analysis of a nation's economic policies before selecting it as a new market or site for operations D. The wealth or buying power of a market from the expenditures of both individuals and businesses E. Nation's total population or the amount of energy it produces and consumes D
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. It is an ongoing process of gathering, analyzing, and dispensing information for tactical or strategic purposes. C. The process obtains both factual and subjective information. D. Environmental scanning contributes to making well-informed decisions and to the development of effective strategies. E. Environmental scanning cannot help companies develop contingency plans for a particularly volatile environment. E
What are the shortcomings of the global matrix structure?
A. The global matrix structure improves communication among divisions. B. The matrix structure can increase coordination. C. It is cumbersome, and individual responsibility and accountability are unclear. D. This matrix structure can improve agility and local responsiveness. E. The global matrix structure increases the efficiency of highly specialized employees. C
Which of the following statements about the letter of credit is NOT true?
A. The letter of credit requires an importer to deposit funds B. The letter of credit is a secure form of payment C. The letter of credit reduces the importer's risk of nonshipment D. The letter of credit reduces risk for traders E. The exporter's risk of nonpayment is slightly increased A
Which of the following statements about mission statements 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. A mission statement identifies and selects an organization's objectives. C. The mission statement guides decisions such as which industries to enter or exit and how to compete in chosen segments. D. A mission statement is a written statement of why a company exists and what it plans to accomplish. E. Mission statements often spell out how a company's operations affect its stakeholders. B (definition for planning)
Which one of the following BEST explains primary market research?
A. The process of collecting and analyzing original data and applying the results to current research needs. B. Competitor analysis C. Data obtained from other countries that are interpreted with great caution D. The process of obtaining information that already exists within the company or that can be obtained from outside sources E. The research in which an interviewer asks current or potential buyers to answer written or verbal questions A
Marketing communication is typically considered a circular process to include all of the following EXCEPT:
A. The promotional message is sent to the audience (potential buyers) through various media. B. Noise is not part of marketing communication. C. After the audience receives the message, they decode the message and interpret its meaning. D. Information in the form of feedback (purchase or nonpurchase) flows back to the source of the message. E. An idea is encoded (translated into images, words, and symbols) into a promotional message. B
Why would a firm opt for a global strategy?
A. To avoid standardization B. To overlook differences in buyer preferences C. To customize its product for different markets D. To follow a focus strategy E. To take advantage of economies of scale E
Which of the following is NOT a reason for a company to export goods and services?
A. To build a wholly owned subsidiary B. To gain international business experience C. To diversify sales D. To expand total sales E. To achieve economies of scale A
For which of the following reasons would a company NOT choose a global strategy?
A. To have cost savings due to product and marketing standardization B. To cause a company to overlook important differences in buy preferences C. To take advantage of scale economies D. To allow managers to share lessons learned E. To take advantage of location economies B
Which of the following methods is NOT a means of conducting primary research?
A. Trade missions B. Surveys C. International organizations D. Environmental scanning E. Focus groups C
Managers must analyze a nation's economic situation when selecting a new market site. Which of the following is NOT an economic consideration?
A. Transport costs B. Currency problems C. Poor fiscal and monetary policies D. Culture E. Liquidity problems D
Which of the following is NOT a common form of investment entry?
A. Turnkey projects B. Wholly owned subsidiaries C. Joint ventures D. Forward integration joint ventures E. Strategic alliances A
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 federalexport-assistance programs that can be essential for first-time exporters.
A. U.S. Treasury Department B. Small Business Administration C. Small Business Development Center D. U.S. Department of Commerce E. World Trade Organization D
Which of the following is NOT part of the screening process a manager would go through in the selection of an international site?
A. Use telephone surveys. B. Assess the national business environment. C. Identify basic appeal. D. Select the market or site. E. Measure market or site potential. A
Which of the following is NOT a reason to set up production locally?
A. When the total cost of production in a market is lower than in the home market B. Low-cost local production might encourage licensing or franchising C. Gaining a competitive advantage D. When producing goods with high shipping costs E. Political instability E
Under what conditions do companies NOT use centralized decision making?
A. When they operate in multiple lines of business B. When they need help in coordinating the operations of international subsidiaries C. When one subsidiary's output is another's input D. When quick local responsiveness is needed E. When a company is purchasing for subsidiaries that use the same inputs D
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. a trade show B. secondary market research C. a trade mission D. a consumer panel E. logistics A
Whether the push or pull strategy is most appropriate in a given marketing environment depends on all of the following EXCEPT ________.
A. access to mass media B. type of product C. the distribution system D. transfer pricing E. the length of the distribution channel D
The documentary collection process can be broken into all the following steps EXCEPT ________.
A. applying for a bill of lading B. drawing up a draft (bill of exchange) C. sending documents to the importer's bank D. receiving the bill of lading E. obtaining a letter of credit E
Export/import financing methods designed to reduce risks include all of the following EXCEPT a(n) ________.
A. buyback B. advance payment C. open account D. letter of credit E. documentary collection A
Pointers on what businesses can do to reduce the likelihood of not receiving payment include all the following, EXCEPT ________.
A. clarifying payment terms B. consulting an international trade attorney C. gaining market knowledge D. avoiding countries that pose problems for debt collection E. waiting a long time to begin collecting a past-due account E
Categories of entry modes include all of the following EXCEPT ________.
A. contractual entry B. countertrade C. investment entry D. exporting E. an open account E
Which one of the following is the set of planned actions taken by managers to help a company meet its objectives?
A. core competency B. A mission statement C. Strategy D. A stakeholder E. Planning C
In ranking potential locations according to their appeal as a new market, managers need to take into consideration all of the following variables EXCEPT ________.
A. country risk B. market receptivity C. trade missions D. economic freedom E. commercial infrastructure C
Because companies base organizational structures on strategies, changes in strategy usually require________.
A. decentralization B. participative management accountability C. a low-cost leadership strategy D. chains of command E. adjustments in structure E
The following are factors that affect the location selection process EXCEPT _________.
A. economic and financial forces B. cultural forces C. political and legal forces D. cost of transporting materials and goods E. home office commitments E
A producer would use a(n) ____________ channel if it wants its product to be made available through as many distribution outlets as possible.
A. exclusive B. two-level C. intensive D. zero E. one-level C
A(n) __________creates a division with a manager for international activities.
A. global matrix structure B. international area structure C. work team D. international division structure E. global product structure D
A(n) ________ creates a separate international division with its own manager.
A. global product structure B. international area structure C. a work team D. international division structure E. global matrix structure D
For self-managed teams, experts suggest that international managers follow all of the basic guidelines EXCEPT ________.
A. ignoring cultural differences when using self-managed teams B. adapting the self-managed work-team concept to the national culture of each subsidiary C. adapting the process of integrating self-managed work teams to the national culture of each subsidiary D. training local managers at the parent company and allowing them to introduce teams at a time they feel is most appropriate E. using selection tests to identify the employees most likely to perform well in a team environment A
Competitor analysis should address all the following issues EXCEPT ________.
A. income elasticity B. number of competitors in each market C. a competitor's focus on high quality or low price D. a competitor's control on the channels of distribution E. market share of each competitor A
When Procter & Gamble encountered distribution difficulties trying to introduce Rejoice hair-care products intoAsia, the company opted to generate grassroots consumer demand. The company hired a fleet of trucks to drive through village squares and hand out free trial packages to potential end users. This an example of_____________.
A. international advertising B. promotion mix C. pull strategy D. push strategy E. marketing communication C
The Internet can be useful for all of the following EXCEPT ________.
A. learning about the culture and economic conditions of possible production sites B. saving the expense of a field trip to a potential location C. saving the time required for a field trip to a potential location D. going on a trade mission E. seeking information about potential production sites D
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 a failure to determine________.
A. market size potential B. basic demand C. market consumption capacity D. market size data E. market receptivity B
A ________ strategy is a strategy of adapting products and their marketing strategies in each national market to suit local preferences.
A. multinational B. growth C. stability D. global E. retrenchment A
A ________ strategy refers to reducing scope of a business
A. multinational B. retrenchment C. global D. growth E. stability B
Companies are undertaking new product development at an increasingly rapid pace, which has led to ________.
A. national image B. cultural differences C. shortened product life cycles D. counterfeit goods and black market E. promotion mix C
The process of obtaining information that already exists within the company or that can be obtained from outside sources is called ________.
A. primary market research B. a consumer panel C. environmental scanning D. secondary market research E. a focus group D
Problems that can affect a company's international distribution activities include all of the following EXCEPT________.
A. risks from potential property damage B. lack of market understanding C. overestimating the knowledge of distributors in emerging markets D. value density E. theft and corruption D
A __________ team is one in which the employees from a single department take on the responsibilities of their former supervisors.
A. self-managed B. quality-improvement C. cross-functional D. global E. work A
A(n) ________ is a special ability of a company that competitors find extremely difficult or impossibl
A. value-chain analysis B. global strategy C. focus strategy D. organizational structure E. core competency E
A pricing policy in which a product has a different selling price in export markets than it has in the home market is called ________.
A. worldwide pricing B. transfer prices C. arm's length price D. price escalation E. dual pricing E
________ 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. Bottom-up; Top-down C. Centralized; Decentralized D. Traditional; New E. Focus strategy; Cost-leadership C
________ disperses decisions to lower organizational levels, such as to international subsidiaries.
A. Value-chain analysis B. Decentralized decision making C. Chains of command D. Centralized decision making E. Strategy B
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. B
Which of the following statements about franchising is FALSE?
A.Franchising is an entry mode that allows for rapid geographic expansion. B.Franchisers can use franchising as a low-cost, low-risk entry mode into new markets. C.Franchisees can gain organizational flexibility in franchising agreements. D.Franchising gives a company greater control over the sale of its product in a target market than licensing does. E.Franchisers can benefit from the cultural knowledge and know-how of local managers. C
Which of the following in NOT an advantage of licensing?
A.Licensing helps avoid black market sales. B.Licensing reduces risk. C.Licensees can upgrade their technologies. D.Licensing might create competitors. E.Licensing finances international expansion. D
Which of the following is NOT an international promotional strategy?
A.Product/communications adaptation (dual adaptation) B.Product/communications extension (dual extension) C.New product introduction/new promotion D.Product extension/communications adaptation E.Product adaptation/communications extension C
Canon of Japan purchased expertise in optic technology and developed products based on optic technology—including cameras and copiers. This is an example of ________.
A.planning B.support activities C.a core competency D.value-chain analysis E.primary activities C
BEGGING OF CH 12
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