Question 1

Flee, a chain of electronic stores, plans to grow geographically. It has tied up with local retailers in international markets to form a new company in which ownership, control, and profits are shared between all involved parties. Which of the following entry strategies is being followed by Flee?

Accepted Answer

A joint venture is formed when the entering retailer pools its resources with a local retailer to form a new company in which ownership, control, and profits are shared.

Question 2

A(n) ________ is formed when the entering retailer pools its resources with a local retailer to form a new company in which ownership, control, and profits are shared.

Accepted Answer

A joint venture is formed when the entering retailer pools its resources with a local retailer to form a new company in which ownership, control, and profits are shared.

Question 3

Dave is a part of the strategic retail planning process in his organization. He has defined the business mission. Which of the following steps is most likely Dave's next stage in the strategic planning process?

Accepted Answer

After developing a mission statement and setting objectives, the next step in the strategic planning process is to conduct a SWOT analysis. A SWOT analysis involves an analysis of the retailer's internal environment (strengths and weaknesses) and external environment (opportunities and threats).

Question 4

Lezos, a chain of international restaurants, has operations in more than 50 countries around the world. The company has a practice of investing in projects long enough for them to become successful. Which of the following is most likely a reason for the success of Lezos in international markets?

Accepted Answer

Successful global retailers have the ability to keep investing in projects long enough to become successful. This is an example of success because of the availability of financial resources.

Question 5

________ occurs when a retail firm invests in and owns a retail operation in a foreign country.

Accepted Answer

Direct investment occurs when a retail firm invests in and owns a retail operation in a foreign country.

Question 6

MarMa, a retailer of auto accessories, plans to grow geographically. It has tied up with independent international firms to facilitate its local logistical activities. Which of the following entry strategies is being followed by MarMa?

Accepted Answer

A strategic alliance is a collaborative relationship between independent firms. A retailer might enter an international market through direct investment but use independent firms to facilitate its local logistical and warehousing activities.

Question 7

Which of the following steps is typically the first step in the strategic retail planning process?

Accepted Answer

Defining the business mission is typically the first step in the strategic planning process.

Question 8

Which of the following factors is classified as a competitive factor?

Accepted Answer

Barriers to entry, bargaining power of vendors, and competitive rivalry are classified as competitive factors.

Question 9

Which of the following statements is a disadvantage of franchising?

Accepted Answer

Franchising offers the lowest risk and requires the least investment but also has the lowest potential return on investment. The retailer has limited control over the retail operations in the foreign country, its potential profit is reduced, and the risk of assisting in the creation of a local domestic competitor increases.

Question 10

Toss, a chain of sports equipment retailers, plans to invest in a retail operation in a foreign country. Which of the following categories of investments does this belong to?

Accepted Answer

Direct investment occurs when a retail firm invests in and owns a retail operation in a foreign country.

Question 11

Papa Bean, a global chain of pizzerias, has operations in more than 80 countries around the world. Its menu varies considerably in different countries, assimilating minute details from the local culture to add to its truly global flavor. Which of the following is most likely a reason for the success of Papa Bean in international markets?

Accepted Answer

Successful global retailers recognize cultural differences and adapt their core strategy to the needs of local markets. This is an example of adaptability.

Question 12

Which of the following factors is classified as a market factor?

Accepted Answer

Market size, market growth, cyclicality of sales, and seasonality are classified as market factors.

Question 13

Which of the following statements is a disadvantage of a joint venture?

Accepted Answer

Problems with a joint venture entry approach can arise if the partners disagree or the government places restrictions on the repatriation of profits.

Question 14

Fresh Foods, a chain of international supermarkets, has operations in 20 countries around the world. Fresh Foods always encourages the rapid development of local management and retains few expatriates in its overseas operations. Fresh Foods' management ranks are truly international. Which of the following is most likely a reason for the success of Fresh Foods in international markets?

Accepted Answer

To be global, retailers must think globally. This is an example of success through a global culture.

Question 15

Which of the following statements is True of the challenges faced by organized retailing in Russia?

Accepted Answer

Retailers often cannot rely on domestic products because the quality of products made in Russia tends to be poor.

Question 16

Which of the following statements is a key advantage of direct investments?

Accepted Answer

A key advantage of direct investment is that the retailer has complete control of the operations.

Question 17

A(n) ________ is a collaborative relationship between independent firms.

Accepted Answer

A strategic alliance is a collaborative relationship between independent firms.

Question 18

Which of the following statements is True of franchising?

Accepted Answer

Franchising offers the lowest risk and requires the least investment but also has the lowest potential return on investment.

Question 19

Mindy's, a fashion brand, has a significant cost benefit that facilitates success in international markets in which price plays an important role in consumer decision making. Which of the following is most likely a reason for Mindy's success in international markets?

Accepted Answer

This is an example of a globally sustainable competitive advantage. Entry into nondomestic markets is most successful when the expansion opportunity builds on the retailer's core bases of competitive advantage.

Question 20

Which of the following statements is an advantage of a joint venture?

Accepted Answer

A joint-venture entry strategy reduces the entrant's risks. In addition to sharing the financial burden, the local partner provides an understanding of the market and has access to local resources, such as vendors and real estate.

Quiz 5: Retail Market Strategy