Question 1

The size of a business is not a barrier to entry into international markets; it only limits the number of markets you can serve.

Accepted Answer

The statement is true because the size of a business does not prevent it from entering international markets. However, it may limit the number of markets that the business can serve due to resource constraints.

Question 2

Using licensing,a small business owner can enter a foreign market quickly with virtually no capital.

Accepted Answer

Licensing allows a business owner to grant rights to a foreign company to produce and sell their product, enabling market entry without significant investment in infrastructure or operations.

Question 3

Of all the ways to conduct business internationally,exporting provides the lowest level of risk and investment.

Accepted Answer

Exporting involves selling goods or services to foreign markets without establishing a physical presence, thus minimizing financial risk and investment compared to other methods like joint ventures or establishing subsidiaries.

Question 4

Japan,Germany,and the United Kingdom top the list of importers of products made in the United States.

Accepted Answer

As of the latest data, Canada, Mexico, and China are typically the top importers of U.S. products, not Japan, Germany, and the United Kingdom.

Question 5

As seen in the chapter opener,Lonely Planet was started with the intent of writing a travel guide for every inhabited country on the planet.

Accepted Answer

The answer of As seen in the chapter opener,Lonely Planet...

Question 6

After exporting,the next level of commitment in international business is licensing.

Accepted Answer

Licensing is a form of international business where a company (the licensor) grants permission to another company (the licensee) to use its intellectual property, such as patents, trademarks, or copyrights, in exchange for a royalty fee. This is a lower level of commitment than exporting, as the licensor does not have to invest in production or distribution in the foreign market.

Question 7

The vast majority of small business activity in the international market is conducted via importing and exporting.

Accepted Answer

Small businesses often engage in international trade primarily through importing and exporting due to lower barriers to entry compared to other forms of international business activities like foreign direct investment.

Question 8

A foreign licensing agreement is a partnership between two businesses in different countries.

Accepted Answer

A foreign licensing agreement is not a partnership but a contractual arrangement between two businesses in different countries.

Question 9

A disadvantage of exporting is waiting longer for payments than would occur if dealing with local markets.

Accepted Answer

Exporting often involves longer payment terms due to factors like international shipping, customs clearance, and differing payment practices, leading to delays compared to local transactions.

Question 10

In France,working an 80-hour work week is highly undesirable,whereas it is typical in the United States.

Accepted Answer

In France, the maximum legal work week is 35 hours, while in the United States, there is no federal limit on the number of hours an employee can work in a week.

Question 11

In an international business plan,analysis becomes more critical than information.

Accepted Answer

The answer of In an international business plan,analysis becomes more...

Question 12

A disadvantage of exporting is reduced dependence by the small business owner on existing markets.

Accepted Answer

The answer of A disadvantage of exporting is reduced dependence...

Question 13

A problem for many small businesses when trading internationally is getting paid for the product or service that is delivered.

Accepted Answer

Small businesses often face challenges in international trade, such as currency exchange issues, differing payment systems, and potential payment defaults, which can complicate receiving payments.

Question 14

Opening a factory or a store in another country is the highest level of commitment a small business owner can make to international business.

Accepted Answer

Opening a factory or store in another country involves significant investment, resources, and long-term commitment, representing the highest level of international business engagement for a small business.

Question 15

For small businesses,the largest trading partners of the United States are the best countries to focus on when exporting products.

Accepted Answer

While large trading partners may offer significant opportunities, small businesses might benefit more from focusing on niche markets or countries with less competition and more favorable trade agreements.

Question 16

Joint ventures are often huge successes with profits in the millions of dollars.

Accepted Answer

Joint ventures can be successful, but they also face challenges and risks, and not all result in huge profits. Success depends on various factors such as market conditions, management, and strategic alignment.

Question 17

No business is too small to compete in the global market.

Accepted Answer

With the internet and digital tools, even small businesses can reach global customers and compete internationally.

Question 18

The same competitive advantages that have made small businesses successful in local markets can make those same businesses successful in foreign markets.

Accepted Answer

Small businesses often have advantages in local markets due to their flexibility, adaptability, and customer focus. These same advantages can be leveraged in foreign markets, allowing small businesses to compete effectively against larger, more established companies.

Question 19

The simplest and most cost-effective way for a small business to export is to hire an export service company.

Accepted Answer

Hiring an export service company can simplify the process and reduce costs by leveraging their expertise and established networks, which can be more efficient than setting up an in-house export department.

Question 20

The size of a business does not determine its ability to enter global markets,nor does it influence the number and scale of markets a business can enter.

Accepted Answer

The size of a business can influence its ability to enter global markets due to factors like resources, capital, and operational capacity, which can affect the number and scale of markets it can enter.

Quiz 15: International Small Business