QUESTION Which of the following is the most likely outcome of a foreign firm entering a developed nation on a small scale after other international businesses in the firm’s industry? A. Capturing first-mover advantages B. Higher pioneering costs C. Rapid increase in market share D. Limited future growth potential E. Increase in sales volume […]
QUESTION Which of the following is a disadvantage of franchising? A. The franchiser has to bear development costs and risks associated with foreign expansion. B. Franchising leads to undesirable results for service firms. C. It is difficult to maintain quality control across foreign franchisees that are distant from the franchiser. D. The franchiser has no […]
QUESTION Which of the following is a disadvantage of small-scale entry for an international firm considering foreign expansion? A. The possibility of escalating commitment leading to major financial losses B. The limited availability of resources for use in other markets C. The lack of flexibility associated with strategic commitments D. The increase in economic exposure […]
QUESTION Which of the following entry modes into a foreign market best serves a high-tech firm? A. Turnkey projects B. Franchising C. Wholly owned subsidiaries D. Joint ventures E. Exporting ANSWER C
QUESTION Which of the following is an advantage of choosing exporting as a mode of entry into foreign markets? A. A firm can avoid the cost of establishing manufacturing operations in the host country. B. A firm shares the development costs and risks with its host partner. C. A firm can earn returns from process […]
QUESTION How can firms avoid incurring high transport costs when exporting bulk products? A. By taking a minority equity interest B. By entering into a turnkey project with a foreign firm C. By manufacturing bulk products regionally D. By setting up subsidiaries irrespective of market reach E. By reducing the quantity of the product offering […]
QUESTION Which of the following is a course of action suggested by Christopher Bartlett and Sumantra Ghoshal for companies based in developing nations? A. Build up financial resources to match those of the largest global competitors. B. Enter foreign markets at a similar time and scale as multinational companies. C. Enter markets rapidly and exit […]
QUESTION Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets? A. It is an ideal way to gain entry into a country where FDI is not limited by government regulations. B. It is a useful strategy to earn great returns from the know-how of a technologically […]
QUESTION Which of the following describes a turnkey project? A. Granting rights to intangible property to other firms B. Establishing firms that are jointly owned by two or more otherwise independent firms C. Exporting process technology to other countries D. Setting up wholly owned subsidiaries in foreign nations E. Selling products produced in one country […]
QUESTION In which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational? A. Franchising agreement B. Turnkey project C. Licensing agreement D. Wholly owned subsidiary E. Joint venture ANSWER B
