QUESTION Which of the following is true of international firms considering foreign expansion? A. The timing and scale of entry of foreign expansion are minor details in comparison with the choice of foreign market. B. The long-run economic benefits of doing business in a country are solely a function of the country’s population size. C. […]
QUESTION When should a firm configure its value chain to maximize value at each stage? A. When government regulations relax B. When cost pressures are intense C. When rapid imitation is expected D. When the number of consumers increases E. When incumbent competitors exist ANSWER B
QUESTION Axiom International, an Australian company, wants to expand its operations to China, a country that is politically, culturally, and economically different. The firm needs to select a mode of entry that would give it access to local knowledge, allow sharing of development costs and risks, and also be politically acceptable. Which of the following […]
QUESTION Why should a high-tech firm avoid selecting licensing as a mode of entry? A. Threat of creating efficient partners B. Risk of losing control over technology C. Fear of rapid imitation of core technology D. Lack of a transitory technological advantage E. Inability to deter development costs ANSWER B
QUESTION Which of the following modes of entry into foreign markets can result in a lack of control over quality? A. Exporting B. Franchising C. Turnkey projects D. Wholly owned subsidiaries E. Joint ventures ANSWER B
QUESTION Jupiter Systems is a high-tech firm looking to set up operations in a foreign country. The firm’s core competency is in technological know-how. Which of the following modes of entry would be most favorable to the firm if it wants to keep a tight control over its technology? A. Wholly owned subsidiary B. Joint […]
QUESTION Which of the following is a disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets? A. Lack of control over quality B. High costs and risks C. Problems with local marketing agents D. Inability to engage in global strategic coordination E. Lack of control over technology ANSWER B
QUESTION Which of the following modes of entry is suitable for service firms where the risk of losing control over the management skills or technological know-how is not much of a concern, and where the firms’ valuable asset is their brand name? A. Exporting B. Franchising C. Licensing D. Turnkey projects E. Cross-licensing ANSWER […]
QUESTION Which of the following is a reason why firms often overpay for the assets of an acquired firm? A. Studies supporting the rise of failed companies post acquisitions B. Evidence of high management turnover post acquisitions C. The success rate of acquisitions exceeding that of failures D. Interest of more than one party in […]
QUESTION Which of the following postulates that top managers typically overestimate their ability to create value from an acquisition? A. Bandwagon effect B. Fisher effect C. Hubris hypothesis D. International Fisher effect E. Learning effect ANSWER C
