Question 1

Which term refers to the sale of goods by a firm in one country to an affiliated firm in another country?
A) indirect exporting
B) direct exporting
C) intercorporate transfers
D) intracorporate transfers

Accepted Answer

Intercorporate transfers refer to the sale of goods between corporations, but when the transaction is specifically between affiliated firms within the same corporation but in different countries, it is termed intracorporate transfers. This highlights the internal nature of the transaction across international borders within the same corporate entity.

Question 2

________ offer services including export management companies, Webb-Pomerene associations, and international trading companies.
A) Intermediaries
B) Wholesalers
C) Exporters
D) Distributors

Accepted Answer

Intermediaries, such as export management companies, Webb-Pomerene associations, and international trading companies, facilitate the distribution of products in international markets by acting as middlemen between producers and foreign buyers.

Question 3

Franklin Carpets engages in indirect exporting, so the firm sells its carpets to a(n) ________.
A) domestic customer who then sells the carpets to a foreign customer
B) foreign customer who then sells the carpets to a domestic customer
C) affiliated company located in a foreign country
D) foreign customer through e-commerce

Accepted Answer

Indirect exporting involves a company selling its products to a domestic intermediary (such as an export trading company or an export management company), who then sells the products to foreign customers. This allows the original company to avoid dealing with the complexities of exporting, such as navigating foreign regulations, logistics, and market strategies.

Question 4

Which term refers to sales made to either distributors or end-users located outside the firm's home country?
A) indirect exporting
B) direct exporting
C) intercorporate transfers
D) intracorporate transfers

Accepted Answer

Direct exporting refers to selling goods directly to customers in a foreign country, without the use of an intermediary in the home country. This can be to either distributors or end-users located outside the firm's home country.

Question 5

When British Petroleum ships crude oil from its storage facilities in Kuwait to its Australian subsidiary, ________ has occurred.
A) indirect exporting
B) direct exporting
C) an intracorporate transfer
D) an intercorporate transfer

Accepted Answer

This scenario describes an intracorporate transfer, which occurs when goods are moved between divisions, subsidiaries, or entities within the same corporation across international borders.

Question 6

Which of the following statements about Webb-Pomerene associations is most likely true?
A) The number of Webb-Pomerene associations is growing due to globalization.
B) Most Webb-Pomerene associations facilitate trade in the garment industry.
C) Webb-Pomerene associations participate in marketing and promotion.
D) Webb-Pomerene associations are unable to negotiate contracts.

Accepted Answer

Webb-Pomerene associations are groups of American exporters who are allowed to work together in exporting activities without being subject to certain antitrust laws. Their main activities include marketing and promotion of their products in foreign markets, which is why option C is the most likely true statement among the given choices.

Question 7

Where are the world's most important international trading companies located?
A) Germany
B) Japan
C) Canada
D) China

Accepted Answer

Japan is home to some of the world's largest and most influential trading companies, known as sogo shosha, which play a crucial role in international trade.

Question 8

Which of the following would most likely discourage an international firm from relying on exports as an entry mode?
A) tariffs
B) export promotion policies
C) export financing programs
D) home country subsidization

Accepted Answer

Tariffs increase the cost of exporting goods into a foreign country, making it less attractive for international firms to rely on exports as an entry mode. Tariffs are essentially taxes imposed on imported goods, which can make products more expensive in the target market and reduce their competitiveness.

Question 9

A sogo shosha is best described as a(n) ________.
A) export management company
B) freight forwarder
C) international trading company
D) manufacturers' agent

Accepted Answer

A sogo shosha is a Japanese term that refers to a large international trading company. These companies are involved in a wide range of businesses and industries around the world, trading in a variety of products and services.

Question 10

What are the third parties that specialize in facilitating imports and exports called?
A) intermediaries
B) wholesalers
C) exporters
D) distributors

Accepted Answer

Intermediaries are third parties that specialize in facilitating imports and exports by acting as a bridge between the producer and the market. They provide valuable services such as logistics, documentation, and compliance with local regulations, which are crucial for successful international trade.

Question 11

Unlike an export management company, an international trading company ________.
A) offers customer financing
B) facilitates customs documentation
C) manages international transportation logistics
D) participates in exporting and importing activities

Accepted Answer

An international trading company is directly involved in the trade of goods and services across international borders, meaning it participates in both exporting and importing activities, unlike an export management company which primarily focuses on helping domestic companies export their products.

Question 12

________ for exporting are those that push a firm into foreign markets.
A) Reactive motivations
B) Proactive motivations
C) Opportunity motivations
D) Avoidance motivations

Accepted Answer

The answer of ________ for exporting are those that push...

Question 13

When Hewlett-Packard buys microchips from Intel to use in manufacturing computers and then exports the completed computers to Europe, ________ has occurred.
A) indirect exporting of Intel's chips
B) direct exporting of Intel's chips
C) an intercorporate transfer of Intel's chips
D) an intracorporate transfer of Intel's chips

Accepted Answer

Indirect exporting of Intel's chips has occurred because Intel's chips are being exported as part of the finished product (computers) by Hewlett-Packard, rather than Intel exporting the chips directly themselves.

Question 14

Tanya is employed by an export management company that provides its services to many exporters in the Chicago area. Tanya would likely be responsible for ________.
A) shipping goods
B) advertising
C) creating strategic marketing plans
D) customer service

Accepted Answer

The answer of Tanya is employed by an export management...

Question 15

Which of the following is an advantage of exporting?
A) vulnerability to tariffs
B) logistical complexities
C) potential conflicts with distributors
D) access to new markets

Accepted Answer

Exporting provides access to new markets, which can be beneficial for expanding a company's customer base and increasing sales.

Question 16

Which form of exporting is used by firms in order to lower their production costs?
A) indirect exporting
B) direct exporting
C) intercorporate transfers
D) intracorporate transfers

Accepted Answer

Intracorporate transfers involve the movement of goods and services within the same corporation but across different countries, often to leverage lower production costs in certain locations. This can be a strategy to reduce overall costs by manufacturing or producing parts of their products in countries where labor, materials, or other production inputs are cheaper.

Question 17

________ occur(s) when a firm sells its products to a domestic customer, which in turn exports the product, in either its original form or a modified form.
A) Indirect exporting
B) Direct exporting
C) Intercorporate transfers
D) Intracorporate transfers

Accepted Answer

Indirect exporting occurs when a firm sells its products to a domestic customer, which in turn exports the product, in either its original form or a modified form. In this case, the domestic customer takes care of the exportation process, and the original firm does not have direct involvement in the international market.

Question 18

A(n) ________ is a firm directly engaged in importing and exporting a wide variety of goods for its own account.
A) Webb-Pomerene association
B) export management company
C) international trading company
D) management broker

Accepted Answer

An international trading company is directly involved in importing and exporting a diverse range of goods on its own behalf, fitting the description provided.

Question 19

A(n) ________ is a group of U.S. firms that operate within the same industry and are allowed by law to coordinate their export activities without fear of violating U.S. antitrust laws.
A) Webb-Pomerene association
B) Greenfield organization
C) export management company
D) international trading company

Accepted Answer

A Webb-Pomerene Association allows U.S. firms within the same industry to join together to coordinate export activities without violating antitrust laws. This enables them to be more competitive in international markets.

Question 20

A(n) ________ is a firm that acts as its client's export department.
A) Webb-Pomerene association
B) Greenfield organization
C) export management company
D) international trading company

Accepted Answer

An export management company acts as the export department for a client firm, handling the necessary documentation, logistics, and regulations involved in exporting goods to foreign markets.

Quiz 12: Strategies for Analyzing and Entering Foreign Markets

Which term refers to the sale of goods by a firm in one country to an affiliated firm in another country?

________ offer services including export management companies, Webb-Pomerene associations, and international trading companies.

Franklin Carpets engages in indirect exporting, so the firm sells its carpets to a(n) ________.

Which term refers to sales made to either distributors or end-users located outside the firm's home country?

When British Petroleum ships crude oil from its storage facilities in Kuwait to its Australian subsidiary, ________ has occurred.

Which of the following statements about Webb-Pomerene associations is most likely true?

Where are the world's most important international trading companies located?

Which of the following would most likely discourage an international firm from relying on exports as an entry mode?

A sogo shosha is best described as a(n) ________.

What are the third parties that specialize in facilitating imports and exports called?

Unlike an export management company, an international trading company ________.

________ for exporting are those that push a firm into foreign markets.

When Hewlett-Packard buys microchips from Intel to use in manufacturing computers and then exports the completed computers to Europe, ________ has occurred.

Tanya is employed by an export management company that provides its services to many exporters in the Chicago area. Tanya would likely be responsible for ________.

Which of the following is an advantage of exporting?

Which form of exporting is used by firms in order to lower their production costs?

________ occur(s) when a firm sells its products to a domestic customer, which in turn exports the product, in either its original form or a modified form.

A(n) ________ is a firm directly engaged in importing and exporting a wide variety of goods for its own account.

A(n) ________ is a group of U.S. firms that operate within the same industry and are allowed by law to coordinate their export activities without fear of violating U.S. antitrust laws.

A(n) ________ is a firm that acts as its client's export department.