QUESTION In international business, an advantage of being a late entrant in a foreign market is the ability to: A. create switching costs that tie customers into products or services. B. capture demand by establishing a strong brand name. C. build sales volume and ride down the experience curve before early entrants. D. ride on […]
QUESTION When an international firm makes an acquisition in a foreign market, it acquires valuable intangible as well as tangible assets Indicate whether the statement is true or false. ANSWER TRUE When an international firm makes an acquisition in a foreign market, it not only acquires a set of tangible assets, such as factories, […]
QUESTION Which of the following types of entry into a foreign market allows a firm to learn about the foreign market while limiting the firm’s exposure to that market? A. Early entry B. Small-scale entry C. Large-scale entry D. Late entry E. Rapid entry ANSWER B
QUESTION According to David Ravenscraft and Mike Scherer’s study, many acquisitions destroy rather than create value. Indicate whether the statement is true or false. ANSWER TRUE In a seminal study of the post-acquisition performance of acquired companies, David Ravenscraft and Mike Scherer concluded that, on average, the profits and market shares of acquired companies […]
QUESTION Which of the following is a disadvantage of large-scale entry into a foreign market? A. Decrease in a firm’s exposure to the foreign market B. Difficulty attracting customers and distributors for the product C. Inability to build rapid market-share irrespective of the scale of entry D. Limited product acceptance due to the avoidance of […]
QUESTION An advantage of establishing a greenfield venture in a foreign country is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants Indicate whether the statement is true or false. ANSWER TRUE The big advantage of establishing a greenfield venture in a foreign country […]
QUESTION Which of the following is a reason why a relatively poor country may be an attractive target for inward investment? A. Rapid economic growth B. Political instability C. Currency depreciation D. High cost of living E. Less developed infrastructure ANSWER A
QUESTION Which of the following countries presents a favorable benefit-cost-risk trade-off scenario for foreign expansion? A. A country ridden by private-sector debt B. A country with a free market system C. A country experiencing a dramatic upsurge in inflation rates D. A country that is heavily populated E. A country that is less developed and […]
QUESTION Which of the following factors determines the value that an international business can create in a foreign market? A. Population density in the foreign market B. Political stability of the foreign market C. Nature of indigenous competition D. Per capita income in the foreign market E. Type of political system in the foreign market […]
QUESTION In international business, a product that is not widely available in a foreign market and satisfies an unmet need: A. is likely to have greater value. B. will have to be priced relatively low. C. will see a decrease in sales volume. D. is not suited to that particular market. E. will fail to […]
