Question 1

The disadvantages of subcontracting manufacturing overseas include all of the following except:
A) Problems attaining appropriate quality levels
B) Becoming responsible for subcontractor behaviors and practices
C) Creating future competitors
D) None of the above are disadvantages
E) All of the above are disadvantages

Accepted Answer

The answer of The disadvantages of subcontracting manufacturing overseas include...

Question 2

In most international joint ventures, the division of responsibilities between the international firms and the local company are:
A) Local partners provide manufacturing facilities and management expertise, and the international company provides capital and local marketing expertise
B) Local partners provide product and process technologies, capital management expertise while the international partner provides local manufacturing and a trained workforce
C) Local partners provide market knowledge, manufacturing facilities whilst the international firm provides process technologies, capital and management expertise

Accepted Answer

In most international joint ventures, local partners typically contribute their in-depth market knowledge, existing manufacturing facilities, and sometimes local workforce, which are their strengths. On the other hand, international firms often bring in advanced process technologies, capital investment, and management expertise to complement the local strengths and ensure the success of the venture. This collaboration leverages the unique strengths of both local and international partners.

Question 3

Which of the following is a false statement about exporting and large international corporations:
A) Many international firms rely on exporting as their main means of servicing foreign markets
B) Many large companies use export-import to service their supply chains
C) Country-specific advantages (e.g. Scotch whisky) make exporting the only viable means of servicing international markets
D) All are true statements
E) None are true statements

Accepted Answer

All statements are true.

Question 4

An international firm has just completed a foreign market acquisition that has good financial results, a sound strategic base, and little in common with the acquiring firm. The best post acquisition strategy would be:
A) Partially integrate the acquired firm into the parent's mainstream operations
B) A stand-alone strategy
C) Complete integration into parent's operations
D) All of the above

Accepted Answer

Given the acquisition has little in common with the acquiring firm but has good financial results and a sound strategic base, a stand-alone strategy allows the acquired firm to continue operating successfully without the complexities of integration into the parent company's operations.

Question 5

When negotiating international joint venture agreements, the international firms must be aware of which of the following except:
A) Equity structure, who controls the venture, is more important than the building of mutual trust and respect
B) Protection of proprietary technologies
C) Establishing common policies on financial objectives and strategic goals
D) Ensuring that both sides provide inputs to resolve operating problems
E) All are factors to which international firms should pay attention

Accepted Answer

The correct answer is A because building mutual trust and respect is equally, if not more, important than the equity structure in the success of international joint ventures. The other options (B, C, D) are indeed factors that international firms must be aware of when negotiating joint venture agreements.

Question 6

An international firm has just completed the acquisition of a foreign firm that has a very similar operating environment and many overlapping product lines. The appropriate post acquisition strategy would be:
A) Partially integrate the acquired firm into the parent's mainstream operations
B) A stand-alone strategy
C) Complete integration into parent's operations
D) All of the above

Accepted Answer

Complete integration into the parent's operations is the most appropriate strategy when the acquired firm has a very similar operating environment and many overlapping product lines. This allows for the realization of synergies and efficiencies between the two firms.

Question 7

Direct exporting, compared to indirect exporting, benefits companies in all ways except:
A) Provides face-to-face dealings with foreign distributors and customers
B) Allows for the gradual build-up of international expertise
C) Is less resource-intensive
D) Gives companies some control over their international sales
E) All are direct exporting benefits

Accepted Answer

Direct exporting is more resource-intensive than indirect exporting because it requires a company to handle the logistics, marketing, and sales efforts in the foreign market themselves, rather than relying on intermediaries.

Question 8

Where service is an important competitive advantage, local presences become unnecessary

Accepted Answer

Service as a competitive advantage often requires a local presence to better understand and meet the specific needs of customers, provide timely support, and enhance customer relationships.

Question 9

The advantages of subcontracting production to outside firms in foreign markets include all of the following except:
A) Flexibility in managing markets characterized by rapid change
B) Limiting resource expenditures on new manufacturing equipment
C) Flexible production but usually at higher costs
D) Subcontractor manufacturing expertise
E) All are advantages

Accepted Answer

Subcontracting to outside firms in foreign markets can lead to lower costs due to economies of scale and specialization, not higher costs.

Question 10

In countries where customer responsiveness and local appeals are key competitive advantages, on-site manufacturing and marketing facilities are recommended

Accepted Answer

On-site manufacturing and marketing facilities allow companies to better understand and respond to local customer preferences and market dynamics, providing a competitive advantage in environments where customer responsiveness and local appeal are crucial.

Question 11

An international franchiser is having problems in Asia getting permissions for new businesses and enforcing its international quality and training standards among local franchisees due to local laws and customs. This type of problem is associated with:
A) Cultural obstacles
B) Political problems
C) Archaic legal frameworks and bureaucracies
D) None of the above

Accepted Answer

The answer of An international franchiser is having problems in...

Question 12

_______________ are companies for whom mergers and acquisitions are everyday occurrences. Acquired firms match the acquirer's profile, and integration is rapid, with non-mainstream activities being sold off to third parties:
A) Dairy farmers
B) Carnivores
C) White hunters
D) Gentlemen shooters

Accepted Answer

Carnivores are companies that frequently engage in mergers and acquisitions, integrating acquired firms quickly and divesting non-core activities.

Question 13

These companies make acquisitions only after much patient research in thoroughly investigating many candidates. They then go after their target in a non-hostile manner. Their lack of experience in mergers and acquisitions often causes them problems in managing and integrating their targets into their mainstream operations. In M & A terms, these firms are:
A) Dairy farmers
B) Carnivores
C) White hunters
D) Gentlemen shooters

Accepted Answer

The term "Gentlemen shooters" is used to describe companies that approach mergers and acquisitions (M&A) in a non-hostile, patient, and selective manner, similar to the description given. They are contrasted with more aggressive or experienced firms in the M&A landscape.

Question 14

Which of the following are true statements about trading companies: A) US trading companies were officially set up in the early 1980s B) Taiwanese and Mainland China trading companies tend to be industry-based C) Japanese trading companies were established in the 17^th century and are today arguably the most sophisticated anywhere D) None are true statements E) All are true statements

Accepted Answer

The answer of Which of the following are true statements...

Question 15

The internet has facilitated export efforts in all of the following ways except:
A) Allows on-site orders to be placed
B) Facilitates international payments via electronic fund transfers
C) Permits 24 hour access to corporate websites and promotions
D) Time zone differences and miscommunications are maximized.

Accepted Answer

The internet helps to minimize, not maximize, time zone differences and miscommunications by allowing for asynchronous communication and providing platforms for clear, immediate exchange of information.

Question 16

When trans-Atlantic or pan-Pacific mergers and acquisitions occur to build critical mass and presences across world markets, these are known as:
A) Dairy farmers
B) Carnivores
C) Global mega-mergers
D) Gentlemen shooters

Accepted Answer

These are known as Global mega-mergers, as they involve large-scale mergers and acquisitions across continents to expand market presence and consolidate global influence.

Question 17

In evaluating mergers and acquisitions prospects, what factors are routinely evaluated:
A) Financial analysis to assess performance
B) A strengths-weaknesses-opportunities-threats (SWOT) analysis
C) A cost chain analysis
D) A competitive analysis
E) All of the above

Accepted Answer

All of the options listed are routinely evaluated in the process of assessing mergers and acquisitions prospects. Financial analysis helps in understanding the financial health and performance of the target company. SWOT analysis provides insights into the company's internal strengths and weaknesses, as well as external opportunities and threats. Cost chain analysis helps in understanding the value addition at each stage of the production process and identifying areas of cost advantage or disadvantage. Competitive analysis gives an overview of the competitive landscape in which the company operates.

Question 18

When contemplating merger and acquisition (M & A) as a market entry strategy, international firms should be aware that:
A) M & As are rarely used for foreign direct investment purposes
B) They are used mostly in slowly developing markets that can be built from the ground up
C) They are rarely successful
D) They provide quick access to markets and local expertise

Accepted Answer

Mergers and acquisitions (M&As) are often pursued by international firms as a strategy for quick market entry, allowing them to gain immediate access to new markets and local expertise. This approach can be more efficient than building a new presence from scratch, especially in competitive or mature markets.

Question 19

Which of the following is a false statement about indirect exporting and trading companies:
A) Trading companies came into existence in the twentieth century
B) Trading companies act as the export arms for inexperienced companies
C) Trading companies are both small and very large outfits
D) Japan's trading companies are known as soga shosha

Accepted Answer

Trading companies have been around for centuries, not just since the twentieth century. They played a significant role in global trade even before the 1900s, facilitating international commerce and exploration.

Question 20

When international companies and local firms join forces to share ownership and management responsibilities in specially created enterprises, this is a(n):
A) Merger
B) Acquisition
C) Greenfield operation
D) Joint venture

Accepted Answer

Joint ventures involve international companies and local firms coming together to share ownership and management responsibilities in specially created enterprises. This collaboration allows both parties to benefit from each other's strengths and resources.

Quiz 8: Market Entry and Servicing Strategies

The disadvantages of subcontracting manufacturing overseas include all of the following except:

In most international joint ventures, the division of responsibilities between the international firms and the local company are:

Which of the following is a false statement about exporting and large international corporations:

An international firm has just completed a foreign market acquisition that has good financial results, a sound strategic base, and little in common with the acquiring firm. The best post acquisition strategy would be:

When negotiating international joint venture agreements, the international firms must be aware of which of the following except:

An international firm has just completed the acquisition of a foreign firm that has a very similar operating environment and many overlapping product lines. The appropriate post acquisition strategy would be:

Direct exporting, compared to indirect exporting, benefits companies in all ways except:

Where service is an important competitive advantage, local presences become unnecessary

The advantages of subcontracting production to outside firms in foreign markets include all of the following except:

In countries where customer responsiveness and local appeals are key competitive advantages, on-site manufacturing and marketing facilities are recommended

An international franchiser is having problems in Asia getting permissions for new businesses and enforcing its international quality and training standards among local franchisees due to local laws and customs. This type of problem is associated with:

_______________ are companies for whom mergers and acquisitions are everyday occurrences. Acquired firms match the acquirer's profile, and integration is rapid, with non-mainstream activities being sold off to third parties:

Which of the following are true statements about trading companies:

The internet has facilitated export efforts in all of the following ways except:

When trans-Atlantic or pan-Pacific mergers and acquisitions occur to build critical mass and presences across world markets, these are known as:

In evaluating mergers and acquisitions prospects, what factors are routinely evaluated:

When contemplating merger and acquisition (M & A) as a market entry strategy, international firms should be aware that:

Which of the following is a false statement about indirect exporting and trading companies:

When international companies and local firms join forces to share ownership and management responsibilities in specially created enterprises, this is a(n) :