QUESTION In a joint venture, a firm benefits from a local partner’s knowledge of the host country’s competitive conditions, culture, language, political systems, and business systems Indicate whether the statement is true or false. ANSWER TRUE A joint venture entails establishing a firm that is jointly owned by two or more otherwise independent firms. […]
QUESTION In terms of the entry modes into a foreign market, a joint venture does not give an international firm the tight control over subsidiaries that might be required to realize experience curve or location economies Indicate whether the statement is true or false. ANSWER TRUE A joint venture, a mode of entry into […]
QUESTION In international business, joint ventures with local partners face a significantly higher risk of being subject to nationalization Indicate whether the statement is true or false. ANSWER FALSE In many countries, political considerations make joint ventures the only feasible entry mode. Research suggests joint ventures with local partners face a low risk of […]
QUESTION The most typical joint venture is a 50/50 venture, in which there are two parties, each of which holds a 50 percent ownership stake and contributes a team of managers to share operating control. Indicate whether the statement is true or false. ANSWER TRUE A joint venture entails establishing a firm that is […]
QUESTION When a firm’s competitive advantage is based on technological competence, a joint venture is the preferred mode of entry into a foreign market because it reduces the risk of losing control over that competence. Indicate whether the statement is true or false. ANSWER FALSE When a firm’s competitive advantage is based on technological […]
QUESTION The need for preempting competitors is particularly great in the telecommunications market Indicate whether the statement is true or false. ANSWER TRUE In many cases firms make acquisitions to preempt their competitors. The need for preemption is particularly great in markets that are rapidly globalizing, such as telecommunications, where a combination of deregulation […]
QUESTION Shared ownership agreements can lead to conflicts and battles for control between investing firms. Indicate whether the statement is true or false. ANSWER TRUE With joint ventures, the shared ownership arrangement can lead to conflicts and battles for control between the investing firms if their goals and objectives change or if they take […]
QUESTION An international firm that enters into a turnkey deal has a long-term interest in the foreign country. Indicate whether the statement is true or false. ANSWER FALSE An international firm that enters into a turnkey deal will have no long-term interest in the foreign country. This can be a disadvantage if that country […]
QUESTION Establishing a wholly owned subsidiary gives an international firm a 100 percent share in the profits generated in a foreign market Indicate whether the statement is true or false. ANSWER TRUE There are several clear advantages of wholly owned subsidiaries. Establishing a wholly owned subsidiary gives the firm a 100 percent share in […]
QUESTION A drawback of exporting is that tariff barriers can make it uneconomical as a mode of entry into a foreign market. Indicate whether the statement is true or false. ANSWER TRUE A drawback of exporting as a mode of entry into a foreign market is that tariff barriers can make it uneconomical. Similarly, […]
