Question 1

Tricon was the restaurant division of PepsiCo until it was spun off in 1997.Since then,Tricon has opened 6,000 KFC restaurants abroad.It has 158 restaurants in Indonesia and more than 500 restaurants in China.All are locally owned and the owner pays a fee to Tricon.Tricon is engaged in

Accepted Answer

Tricon is engaged in licensing because it allows local owners to use their brand and charge a fee for it. Tricon does not directly export, indirectly export, contract manufacture, or engage in foreign assembly.

Question 2

Which form of entry into a foreign market requires the greatest commitment?

Accepted Answer

Direct investment involves establishing and managing a foreign subsidiary or acquiring a controlling interest in an existing company, which requires a significant commitment of resources and often involves a high level of risk.

Question 3

Which form of entry into a global market makes a firm the most vulnerable to harm regarding its brand name or reputation?

Accepted Answer

Licensing makes a firm vulnerable because it allows another company to produce and sell products under its brand name, which can lead to quality control issues and potential harm to the brand's reputation if not managed properly.

Question 4

Tricon was the restaurant division of PepsiCo until it was spun off in 1997.Since then Tricon has opened 6,000 KFC restaurants abroad.It has 158 restaurants in Indonesia and more than 500 restaurants in China.All are locally owned and subject to a contractual agreement that allows the owners to operate the business under the established KFC brand name and according to specific rules.Tricon is engaged in

Accepted Answer

Tricon's arrangement with local restaurant owners involves franchising, where the owners are granted the right to operate under the established KFC brand name and specific rules.

Question 5

variations on licensing are

Accepted Answer

The answer of variations on licensing are
...

Question 6

Companies that contract with a foreign firm to manufacture products according to stated specifications are using

Accepted Answer

Contract manufacturing involves outsourcing the manufacturing process to a foreign firm based on set specifications. This allows the contracting company to focus on other aspects of the business such as marketing and distribution.

Question 7

Direct investment in international marketing refers to

Accepted Answer

Direct investment in international marketing refers to a global market-entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division. This involves the establishment of a new business entity or acquisition of an existing enterprise in a foreign country. It is a long-term commitment and requires significant resources, but it provides greater control over operations and access to local knowledge and resources.

Question 8

__________ arrangement between Ericsson,a Swedish telecommunications firm,and CGCT,a French switch maker,enabled them together to beat out AT&T for a $100 million French contract.

Accepted Answer

The arrangement between Ericsson and CGCT is a joint venture, as they have collaborated to compete against AT&T for the French contract.

Question 9

PepsiCo and __________ entered into a joint venture to market Frito-Lay's,Cheetos,Ruffles,and Doritos in Israel.

Accepted Answer

The Strauss Group is an Israeli food and beverage company, making it the most likely option for a joint venture to market Frito-Lay's products in Israel. Ericsson is a technology company, General Mills is a food company, Hebrew National is a brand of kosher meat products, and CGCT is not a known company acronym.

Question 10

Contract assembly refers to

Accepted Answer

The answer of Contract assembly refers to
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Question 11

Which of the following is a disadvantage associated with licensing?

Accepted Answer

Licensing can create its own competition as the licensee may use the licensed technology or product to develop their own similar products, which can compete with the licensor's products. This can potentially harm the licensor's market share and profitability.

Question 12

Honda and Toyota have plants in the United States that use American labor.This example is an illustration of Honda and Toyota practicing

Accepted Answer

Honda and Toyota having plants in the United States that use American labor is an example of direct investment. Direct investment involves a company investing in and owning operations or assets in a foreign country. In this case, Honda and Toyota have invested in plants in the United States, which involves owning and operating manufacturing facilities using American labor.

Question 13

global market-entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division is referred to as

Accepted Answer

Direct investment involves a domestic firm investing in and owning a foreign subsidiary or division. This is a more involved and risky form of international expansion compared to licensing, local assembly, joint venture, or local manufacturing. Direct investments allow for greater control over operations and profits but require significant resources and commitment.

Question 14

Balance Athletic Shoes,Inc.claimed its shoes were "made in the USA" when actually the shoe soles and most of the uppers were made in China.The shoes were assembled in the United States.The Federal Trade Commission did not think that assembling the shoes in the United States was enough to use the "made in the USA" logo.New Balance actually used

Accepted Answer

The situation described in the question is an example of contract manufacturing. New Balance contracted with a manufacturer in China to make the shoe soles and uppers, then assembled the shoes in the United States. Despite being assembled in the US, the shoes were not considered "made in the USA" by the Federal Trade Commission because the majority of the production occurred outside the country.

Question 15

global market-entry strategy in which a foreign company and a local firm invest together to create a local business in order to share ownership,control,and profits of the new company is referred to as

Accepted Answer

This is a clear description of a joint venture, in which two companies invest together to create a new local business. Licensing refers to granting permission to use intellectual property, while direct exporting, local assembly, and local manufacturing do not involve a partnership between a foreign and local firm.

Question 16

disadvantage of a joint venture arrangement when entering a new global market is that

Accepted Answer

When the two companies disagree about policies, it can lead to conflict and hinder the success of the joint venture.

Question 17

Nestlé actually owns a subsidiary or division in a foreign country,such as when it established its own ice cream manufacturing operation in China,this global market entry strategy is known as __________ and represents the greatest commitment a company can make.

Accepted Answer

Direct investment is the global market entry strategy in which a company establishes its own subsidiary or division in a foreign country, representing the highest level of commitment. Nestlé's establishment of an ice cream manufacturing operation in China falls under this category. The other options - licensing, local assembly, joint venture, and local manufacturing - involve varying degrees of collaboration with local partners and do not involve the same level of financial and operational investment as direct investment.

Question 18

Contracting with a foreign firm to assemble parts and components that have been shipped to that country is referred to as

Accepted Answer

Contract assembly involves contracting with a foreign firm to assemble parts and components that have been shipped to that country.

Question 19

Contract manufacturing refers to

Accepted Answer

Contract manufacturing is when a company hires a foreign firm to manufacture products according to specific requirements or specifications. This allows the hiring company to take advantage of lower labor costs and other cost savings while still being able to control the quality of the products produced. Option A refers to licensing, option C refers to a joint venture, and options D and E refer to distribution methods.

Question 20

joint venture refers to

Accepted Answer

Joint venture refers to when a foreign company and a local firm invest together to create a local business.

Quiz 7: Understanding and Reaching Global Consumers and Markets