QUESTION In which of the following situations can an international business command higher prices for a particular product in a foreign market? A. When the product is widely available in the foreign market B. When sales volumes is relatively low in the foreign market C. When the product offers greater value to customers in the […]
QUESTION Which of the following is an example of a first-mover advantage? A. The ability to create switching costs that tie customers into one’s products or services B. The avoidance of pioneering costs that a later entrant into the foreign market has to bear C. The increased probability of surviving in a foreign market D. […]
QUESTION First-mover disadvantages refer to: A. disadvantages associated with entering a foreign market before other international businesses. B. costs that a late entrant to a foreign market has to bear. C. a direct restriction on the quantity of a good that can be imported into a country. D. imperfections in the operation of the market […]
QUESTION Which of the following is true of the costs and risks associated with doing business in a foreign country? A. They are greater for late entrants. B. They are higher in politically democratic nations. C. They are less pronounced in the case of licensing. D. They are lower in economically advanced nations. E. They […]
QUESTION An early entrant find may find itself at a disadvantage if it: A. is trying to realize location and experience curve economies. B. incurs low development costs. C. faces a subsequent change in business regulations in the host-country. D. has a core competence based on control over technological know-how. E. considers a greenfield strategy. […]
QUESTION The liability associated with foreign expansion is greater for foreign firms that: A. choose to ride on an early entrant’s investments. B. use countertrade agreements. C. enter a national market early. D. ride down the experience curve behind their rivals. E. avoid pioneering costs. ANSWER C
QUESTION The probability of survival for an international business increases if it: A. enters a national market after several other foreign firms have already done so. B. avoids the use of countertrade agreements. C. enters a national market early. D. enters a foreign market via turnkey projects. E. avoids engaging in joint ventures. ANSWER […]
QUESTION Licensing increases the risk of losing control over a firm’s proprietary technological know-how Indicate whether the statement is true or false. ANSWER TRUE If a firm’s competitive advantage (its core competence) is based on control over proprietary technological knowhow, licensing and joint-venture arrangements should be avoided if possible to minimize the risk of […]
QUESTION Which of the following is a risk of entering developing nations like India and China on a large scale? A. Lower potential for long-term rewards B. Absence of prior foreign entrants C. Lack of control over quality D. Fear of rapid imitation of technology E. High management turnover ANSWER B
QUESTION Acquiring firms often overpay for the assets of the acquired firms. Indicate whether the statement is true or false. ANSWER TRUE Acquisitions fail for several reasons. First, the acquiring firms often overpay for the assets of the acquired firm. The price of the target firm can get bid up if more than one […]
