Intl Business Ch 15-16

Which of the following statements is true of strategic alliances?

Answers: A firm risks giving away technological know-how and market access to its alliance partner.

_____ allow a firm to rapidly build its presence in the target foreign market.

Answers: Acquisitions

_____ is primarily used for one time-only deals in transactions with trading partners who are not creditworthy or trustworthy.

Answers: Barter

_____ occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made.

Answers: Counterpurchase

Which of the following is a major drawback of engaging in countertrade?

Answers: Countertrade may involve the exchange of unusable goods.

Which of the following statements is true of countertrade?

Answers: Countertrade occurs when goods and services are traded for other goods and services.

_____ are the advantages associated with entering a market early.

Answers: First-mover advantages

How can a firm protect its proprietary information in a joint venture?

Answers: Hold majority ownership in the venture so that the firm has greater control over the technology.

Which of the following statements about small-scale entry is true?

Answers: Small-scale entry is a way to gather information about a foreign market before deciding whether to enter on a significant scale.

Countertrade emerged in the 1960s as a way for the _____ to purchase imports.

Answers: Soviet Union and the then-communist states of Eastern Europe

_____ refer to cooperative agreements between potential or actual competitors.

Answers: Strategic alliances

Which of the following is a disadvantage of using a letter of credit (L/C)?

Answers: The importer must pay a bank fee for the letter of credit.

What is a reason that firms take a reactive approach to exporting rather than a proactive approach?

Answers: They are intimidated by the complexities and mechanics of exporting to countries where business practices, language, culture, legal systems, and currency are very different from the home market.

An arrangement whereby a firm grants the right of intangible property to another entity for a specified time period in exchange for royalties is _____ agreement.

Answers: a licensing

In a letter of credit transaction, the importer secures the letter of credit

Answers: before product shipment.

A _____ is issued to the exporter by the common carrier transporting the merchandise.

Answers: bill of lading

As a document of title, a _____ can be used to obtain payment or a written promise of payment before the merchandise is released to the importer.

Answers: bill of lading

The exporter endorses the ________ so title to the goods is transferred to the bank.

Answers: bill of lading

In theory, the advantage of export management companies is that they are

Answers: experienced specialists who can help the neophyte exporter.

Firms entering markets where there are no incumbent competitors to be acquired should choose

Answers: greenfield investments.

A draft used in international transactions

Answers: is a document requesting payment.

A _____ entails establishing a firm that is owned together by two or more otherwise independent firms.

Answers: joint venture

Firms engaging in a _____ with a local company can benefit from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business systems.

Answers: joint venture

An advantage of _____ with a local partner is the knowledge of the local environment that the local partner contributes to the venture.

Answers: joint ventures

The great promise of exporting is that

Answers: large revenue opportunities are often found in foreign markets.

A _____ is more likely to capture first-mover advantages associated with demand preemption, scale economies, and switching costs.

Answers: large-scale entrant

Large-scale strategic commitments may

Answers: limit strategic flexibility.

The costs and risks associated with doing business in a foreign country are typically

Answers: low in an economically advanced nation.

Apple exports its products to many countries. An advantage of exporting products to another country is that it

Answers: provides the ability to achieve experience curve and location economies.

In an international transaction involving a bank as a third party, the exporter ships the product after

Answers: the bank promises to pay on the importer's behalf.

A _____ allows for a delay in payment.

Answers: time draft