Question 1

Companies involved in direct exporting typically rely on ________.
A)distributors
B)agents
C)export management companies
D)export trading companies

Accepted Answer

The answer of Companies involved in direct exporting typically rely...

Question 2

A confirmed letter of credit is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Accepted Answer

A confirmed letter of credit requires both banks to provide a guarantee to ensure payment to the exporter.

Question 3

Countertrade provides a way for firms to trade either by using a small amount of hard currency or even none at all.

Accepted Answer

Countertrade allows firms to trade using non-monetary forms of payment such as goods, services, or even other currencies, making it possible to conduct trade with minimal or no use of hard currency.

Question 4

Most large companies use exporting as a means of expanding total sales when the domestic market has become saturated.

Accepted Answer

Exporting allows companies to reach new markets and customers outside of their domestic market, thus expanding their total sales. This is a common strategy among large companies when the domestic market has become saturated or when they seek to diversify their customer base.

Question 5

________ take ownership of the merchandise when it enters their country and accept all the risks associated with generating local sales.
A)Agents
B)Distributors
C)Sales representatives
D)Freight forwarders

Accepted Answer

Distributors take ownership of the merchandise and accept all the risks associated with generating local sales. Agents and sales representatives do not take ownership of the merchandise, and freight forwarders are only responsible for transporting the goods.

Question 6

Typically,indirect exporting relies on local sales representatives or distributors.

Accepted Answer

The answer of Typically,indirect exporting relies on local sales representatives...

Question 7

Wang's Techno Toys
Ann Wang has been successfully running Wang's Techno Toys that sells high-tech toys in the domestic market.Continually increasing and stiff competition at home has now forced Wang's Techno Toys to enter international markets through direct exports.
-Which of the following will most likely help Techno Toys sell its toys directly to buyers in the target market?
A)agents
B)sales representatives
C)export management companies
D)export trading companies

Accepted Answer

Sales representatives would be the best choice as they directly represent Techno Toys in the target market, and can communicate effectively with buyers and promote the products. The other options such as agents, export management companies and export trading companies may also be useful, but they involve intermediaries and may not work as effectively in selling the products directly to buyers.

Question 8

The brand name or trademark of a company is normally the single most important item desired by a franchisee.

Accepted Answer

The brand name or trademark is often the key factor in attracting customers and generating sales, which is ultimately what a franchisee is looking for. It also helps to create a sense of trust and credibility with potential customers, which can be particularly important for new businesses.

Question 9

Letters of credit are popular among traders because banks assume most of the risks.

Accepted Answer

This is true. Letters of credit are financial instruments issued by banks that guarantee payment to a seller in a transaction, provided certain conditions are met. This provides a level of assurance to both the buyer and seller, as the bank is taking on the risk of payment.

Question 10

What is countertrade? Explain the concept of buyback as a type of countertrade,and discuss buyback as a joint venture configuration.

Accepted Answer

The answer of What is countertrade? Explain the concept of...

Question 11

The most common method used for buying and selling goods internationally is licensing.

Accepted Answer

The most common method for buying and selling goods internationally is through international trade agreements and contracts, such as importing and exporting. Licensing is a method used for granting a company in another country the right to use a specific product or brand, but it is not the most common method used for international trade.

Question 12

Direct exporters always sell directly to end users.

Accepted Answer

Direct exporters can sell directly to end users, but they can also sell to intermediaries or middlemen such as wholesalers or retailers, who then sell to the end users.

Question 13

Explain why companies consider exporting.Describe the four-step model of developing a successful export strategy.

Accepted Answer

The answer of Explain why companies consider exporting.Describe the four-step...

Question 14

Agency relationships are popular among exporters because they are easy to terminate should difficulties arise.

Accepted Answer

Agency relationships can be difficult to terminate, especially if there is a long-term agreement in place or if the agent has invested time and resources into building the export relationship. It is important for exporters to carefully consider the terms and conditions of any agency agreement before entering into it.

Question 15

Countertrade is not an option for smaller companies because of the cash outlays involved.

Accepted Answer

Countertrade can actually be an attractive option for smaller companies as it allows them to enter international markets without having to make large cash payments upfront. Countertrade involves exchanging goods or services for other goods or services, so it can be a way for smaller companies to offset the costs of entering a new market.

Question 16

Companies can achieve economies of scale by expanding into international markets.

Accepted Answer

When companies expand into international markets, they can benefit from increased production and distribution efficiencies, lower costs, and higher revenues, resulting in economies of scale. This can lead to improved profitability and competitiveness.

Question 17

Why would an exporter use a sales representative or a distributor? Why would the exporter be reluctant to offer an open account payment method?

Accepted Answer

The answer of Why would an exporter use a sales...

Question 18

Using a distributor increases an exporter's risk.

Accepted Answer

Using a distributor typically reduces an exporter's risk by allowing the distributor to handle local sales, logistics, and customer service, leveraging their market knowledge and infrastructure.

Question 19

Switch trading is the export of industrial equipment in return for products produced by that equipment.

Accepted Answer

Switch trading involves a third party buying goods from a country and selling them to another, often to settle a debt or trade imbalance, not specifically related to industrial equipment and its products.

Question 20

Which of the following occurs when a company sells its products to buyers in a target market without going through intermediary companies?
A)export through local distributors
B)export through agents
C)sale through export management companies
D)sale through export trading companies

Accepted Answer

The answer of Which of the following occurs when a...

Quiz 13: Selecting and Managing Entry Modes

Companies involved in direct exporting typically rely on ________.