Question 1

In a(n) _____, a partner may be able to benefit from a partner's knowledge of the host country's culture, language, and political system.

Accepted Answer

In a joint venture a firm may be able to benefit from a partner's knowledge of the host country's competitive position, culture, language, political systems.

Question 2

Strategic alliances are usually of a _____ nature than joint ventures.

Accepted Answer

Strategic alliances are usually of a much longer-term nature than joint ventures.

Question 3

_____ are normally partnerships entered into by two or more firms to gain a competitive advantage on a worldwide versus local basis.

Accepted Answer

Strategic alliances are normally partnerships entered into by two or more firms to gain a competitive advantage on a worldwide versus local basis.

Question 4

FedEx opened a wholly owned subsidiary in the form of a regional distribution center in the Philippines in 1995. Besides certain unavoidable political risks, what is a major disadvantage associated with this form of direct ownership?

Accepted Answer

The primary disadvantages of direct ownership are the huge costs and significant risks associated with this strategy.

Question 5

The major disadvantage associated with the formation of a _____ is the increased risk of competitive conflict between the partners.

Accepted Answer

The major disadvantage associated with formation of a strategic alliance is the increased risk of competitive conflict between the partners.

Question 6

Standardization of one or more parts of the marketing mix is more likely to succeed under all of the following conditions except

Accepted Answer

One of the factors that aid in the successful implementation of standardization is when markets are economically similar.

Question 7

One of the advantages of direct ownership is that the firm has

Accepted Answer

The advantage of direct ownership is that the firm has immediate access to foreign markets.

Question 8

What is the major disadvantage associated with the establishment of a strategic alliance?

Accepted Answer

The major disadvantage associated with formation of a strategic alliance is the increased risk of competitive conflict between the partners.

Question 9

The Nissan factory in Smyrna, Tennessee, is a wholly owned subsidiary with the firm owning 100 percent of the stock. It produces Nissan pickup trucks. Since Nissan is a Japanese company, this plant would be an example of a(n)

Accepted Answer

In direct ownership, companies prefer to enter or grow in markets either through establishment of a wholly owned subsidiary or through acquisition. In either case, the firm owns 100 percent of the stock.

Question 10

UPS is involved in a joint venture agreement with China's largest transportation company Sinotrans Pekair. The Chinese company uses UPS technology and expertise and UPS gets an existing national distribution network. The major disadvantage of such a joint venture is

Accepted Answer

The major disadvantage associated with joint ventures is that a firm may risk giving up control of proprietary knowledge to its partner.

Question 11

Joint ventures are more likely to be found in which of the following areas?

Accepted Answer

Joint ventures are especially popular in industries that call for large investments, such as natural gas exploration and automobile manufacturing.

Question 12

Otto Versand, the world's largest mail order house, entered into collaboration with Sumisho, a Japanese trading company that does some catalog retailing, and Eddie Bauer to put out an international catalog called "For You." In this collaboration, all three participants were able to take advantage of the others' distribution systems, consumer knowledge, and marketing skills. This is an example of a(an)

Accepted Answer

In joint ventures, a firm may be able to benefit from a partner's knowledge of the host country's competitive position, culture, language, political systems, and so forth. They allow firms to take advantage of a partner's distribution system, technological know-how, or marketing skills.

Question 13

The primary disadvantages of direct ownership are _____, and significant risks associated with its strategy.

Accepted Answer

The primary disadvantages of direct ownership are the huge costs and significant risks associated with this strategy.

Question 14

_____ allow firms to take advantage of a partner's distribution system and technological know-how.

Accepted Answer

Joint ventures allow firms to take advantage of a partner's distribution system, technological know-how, or marketing skills.

Question 15

Continental Airlines and Air France entered into a(n) _____ in which both agreed to blend their flight schedules and share passenger check-ins to provide greater convenience to both airlines' customers. Both of these airlines have a worldwide presence and have pledged long-term and total cooperation in customer service.

Accepted Answer

Strategic alliances are normally partnerships entered into by two or more firms to gain a competitive advantage on a worldwide versus local basis. They are usually of a much longer-term nature than are joint ventures.

Question 16

Ericsson, a Swedish telecommunications firm, and CGCT, a French switch maker, collaborated and decided to share management with each other in a(n) _____ agreement, which enabled them to successfully underbid AT&T for a $100 million French contract. Ericsson's money and technology combined with CGCT's knowledge of the French market enabled them to win the contract.

Accepted Answer

In joint ventures, a company may decide to share management with one or more collaborating foreign firms.

Question 17

A firm can realize advantages in a _____ strategy by sharing costs and reducing risks of operating in a foreign market.

Accepted Answer

Joint ventures: The firm gains by sharing costs and risks of operating in a foreign market.

Question 18

A critical decision that marketing managers must make is to determine the extent of standardization of the marketing mix for the foreign country in which the company operates. In which of the following situations would a standardization strategy be most effective?

Accepted Answer

Adaptation/standardization of the marketing mix for a foreign country will be effective when a firm's competitive position is similar in different markets.

Question 19

Why would an American company like Soft Sheen want to use direct ownership to manufacture and market its hair-care products to South Africans?

Accepted Answer

The advantages to direct ownership are that the firm has complete control over its technology and operations.

Question 20

When Ford and Volkswagen agreed to co-build and co-operate a plant in Portugal to manufacture a four-wheel drive vehicle, it was an example of _____ because of the long-term nature of the relationship.

Accepted Answer