Question 1

Turnkey projects are a means of exporting _____ to other countries.

Accepted Answer

Turnkey projects are a means of exporting process technology to other countries.They are most common in the chemical,pharmaceutical,petroleum refining,and metal refining industries,all of which use complex,expensive production technologies.

Question 2

Which of the following is a course of action suggested by Christopher Bartlett and Sumantra Ghoshal for firms from developing nations wishing to pursue a strategy of international expansion?

Accepted Answer

Bartlett and Ghoshal argue that companies based in developing nations should use the entry of foreign multinationals as an opportunity to learn from these competitors by benchmarking their operations and performance against them.Furthermore,they suggest the local company may be able to find ways to differentiate itself from a foreign multinational,for example,by focusing on market niches that the multinational ignores or is unable to serve effectively if it has a standardized global product offering.Having taken both these steps,the firm from a developing nation may then be able to pursue its own international expansion strategy.

Question 3

Which of the following is an advantage of turnkey projects?

Accepted Answer

The know-how required to assemble and run a technologically complex process,such as refining petroleum or steel,is a valuable asset.Turnkey projects are a way of earning great economic returns from that asset.The strategy is particularly useful where FDI is limited by host-government regulations.

Question 4

Significant strategic commitments:

Accepted Answer

Significant strategic commitments are neither unambiguously good nor bad.Rather,they tend to change the competitive playing field and unleash a number of changes,some of which may be desirable and some of which will not be.

Question 5

A project in which a firm agrees to set-up an operating plant for a foreign client and hand over the plant when it is fully operational is referred to as a:

Accepted Answer

In a turnkey project,the contractor agrees to handle every detail of the project for a foreign client,including the training of operating personnel.At completion of the contract,the foreign client is handed the "key" to a plant that is ready for full operation-hence,the term turnkey.

Question 6

A firm that enters into a(n)_____ will have no long-term interest in the foreign country.

Accepted Answer

The firm that enters into a turnkey deal will have no long-term interest in the foreign country.This can be a disadvantage if that country subsequently proves to be a major market for the output of the process that has been exported.

Question 7

A licensor receives _____ in return for granting the rights to intangible property to the licensee for a specified period.

Accepted Answer

A licensing agreement is an arrangement whereby a firm (licensor)grants the rights to intangible property to another entity (the licensee)for a specified period,and in return,the licensor receives a royalty fee from the licensee.

Question 8

Your company would like to capitalize on the valuable know-how it possesses in petroleum refining technology.However,the governments of many oil-rich countries have set out to build their own petroleum refining industries and have consequently restricted FDI in their oil and refining sectors.These countries lack petroleum-refining technology,though.Which of the following strategies would enable your company to export its process technology to these oil-rich countries?

Accepted Answer

The know-how required to assemble and run a technologically complex process,such as refining petroleum or steel,is a valuable asset.Turnkey projects are a way of earning great economic returns from that asset.The strategy is particularly useful where FDI is limited by host-government regulations.

Question 9

What type of entry allows a firm to learn about a foreign market while limiting the firm's exposure to that market?

Accepted Answer

Small-scale entry allows a firm to learn about a foreign market while limiting the firm's exposure to that market.Small-scale entry is a way to gather information about a foreign market before deciding whether to enter on a significant scale and how best to enter.

Question 10

Local agents handling marketing,sales,and service of an exporter may have loyalties to several other companies and may not do as good a job as the firm would if it managed its marketing itself.The company can address this problem by:

Accepted Answer

One drawback to exporting arises when a firm delegates its marketing,sales,and service in each country where it does business to another company-a local agent or another multinational company.Such a company may often carry the products of competing firms and so have divided loyalties.In such cases,the local agent may not do as good a job as the firm would if it managed its marketing itself.

Question 11

Which of the following modes of entry into foreign markets can be rendered uneconomical by high tariff barriers?

Accepted Answer

One drawback of exporting is that tariff barriers can make exporting uneconomical.Similarly,the threat of tariff barriers by the host-country government can make it very risky.

Question 12

Which of the following is a disadvantage of exporting?

Accepted Answer

High transport costs can make exporting uneconomical,particularly for bulk products.

Question 13

The lack of commitment associated with _____ may make it more difficult for the low-scale entrant to build market share and to capture first-mover or early-mover advantages.

Accepted Answer

The lack of commitment associated with small-scale entry may make it more difficult for the small-scale entrant to build market share and to capture first-mover or early-mover advantages.The risk-averse firm that enters a foreign market on a small scale may limit its potential losses,but it may also miss the chance to capture first-mover advantages.

Question 14

The risk-averse firm that enters a foreign market on a small scale:

Accepted Answer

The lack of commitment associated with small-scale entry may make it more difficult for the small-scale entrant to build market share and to capture first-mover or early-mover advantages.The risk-averse firm that enters a foreign market on a small scale may limit its potential losses,but it may also miss the chance to capture first-mover advantages.

Question 15

A licensing agreement is an arrangement whereby a licensor grants the rights to _____ to another entity (the licensee)for a specified period.

Accepted Answer

A licensing agreement is an arrangement whereby a firm (licensor)grants the rights to intangible property to another entity (the licensee)for a specified period,and in return,the licensor receives a royalty fee from the licensee.

Question 16

Christopher Bartlett and Sumantra Ghoshal have pointed out the ability that businesses based in developing nations have to enter foreign markets and become global players.Such firms tend to be:

Accepted Answer

Christopher Bartlett and Sumantra Ghoshal have pointed out the ability that businesses based in developing nations have to enter foreign markets and become global players.Although such firms tend to be late entrants into foreign markets,and although their resources may be limited,Bartlett and Ghoshal argue that such late movers can still succeed against well-established global competitors by pursuing appropriate strategies.

Question 17

Turnkey projects are a short-term proposition.This can be a disadvantage for the firm if that country subsequently proves to be a major market for the output of the process that has been exported.The firm can get around this problem by:

Accepted Answer

The firm that enters into a turnkey deal will have no long-term interest in the foreign country.This can be a disadvantage if that country subsequently proves to be a major market for the output of the process that has been exported.One way around this is to take a minority equity interest in the operation.

Question 18

Which of the following is an advantage of exporting?

Accepted Answer

By manufacturing the product in a centralized location and exporting it to other national markets,the firm may realize substantial scale economies from its global sales volume.

Question 19

According to Christopher Bartlett and Sumantra Ghoshal,what are the prospects for businesses based in developing nations?

Accepted Answer

Christopher Bartlett and Sumantra Ghoshal have pointed out the ability that businesses based in developing nations have to enter foreign markets and become global players.Although such firms tend to be late entrants into foreign markets,and although their resources may be limited,Bartlett and Ghoshal argue that such late movers can still succeed against well-established global competitors by pursuing appropriate strategies.

Question 20

One of the drawbacks to exporting arises when a firm delegates its marketing,sales,and service in each country where it does business to another company,leading to the risk of:

Accepted Answer

One drawback to exporting arises when a firm delegates its marketing,sales,and service in each country where it does business to another company-a local agent or another multinational company.Such a company may often carry the products of competing firms and may have divided loyalties.In such cases,the local agent may not do as good a job as the firm would if it managed its marketing itself.

Quiz 12: Entering Foreign Markets

Turnkey projects are a means of exporting _____ to other countries.

Which of the following is a course of action suggested by Christopher Bartlett and Sumantra Ghoshal for firms from developing nations wishing to pursue a strategy of international expansion?

Which of the following is an advantage of turnkey projects?

Significant strategic commitments:

A project in which a firm agrees to set-up an operating plant for a foreign client and hand over the plant when it is fully operational is referred to as a:

A firm that enters into a(n) _____ will have no long-term interest in the foreign country.

A licensor receives _____ in return for granting the rights to intangible property to the licensee for a specified period.

What type of entry allows a firm to learn about a foreign market while limiting the firm's exposure to that market?

Local agents handling marketing,sales,and service of an exporter may have loyalties to several other companies and may not do as good a job as the firm would if it managed its marketing itself.The company can address this problem by:

Which of the following modes of entry into foreign markets can be rendered uneconomical by high tariff barriers?

Which of the following is a disadvantage of exporting?

The lack of commitment associated with _____ may make it more difficult for the low-scale entrant to build market share and to capture first-mover or early-mover advantages.

The risk-averse firm that enters a foreign market on a small scale:

A licensing agreement is an arrangement whereby a licensor grants the rights to _____ to another entity (the licensee) for a specified period.

Christopher Bartlett and Sumantra Ghoshal have pointed out the ability that businesses based in developing nations have to enter foreign markets and become global players.Such firms tend to be:

Turnkey projects are a short-term proposition.This can be a disadvantage for the firm if that country subsequently proves to be a major market for the output of the process that has been exported.The firm can get around this problem by:

Which of the following is an advantage of exporting?

According to Christopher Bartlett and Sumantra Ghoshal,what are the prospects for businesses based in developing nations?

One of the drawbacks to exporting arises when a firm delegates its marketing,sales,and service in each country where it does business to another company,leading to the risk of: