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Exam 13: Entering Foreign Markets

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Question 31

True/False

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If an international firm's core competency is based on proprietary technology, entering a joint venture might risk losing control of that technology to the joint-venture partner.

A) True
B) False

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Question 32

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What is an example of an intangible property?

A) infrastructure
B) machinery
C) leased equipment
D) advanced computing systems
E) patent

F) A) and B)
G) A) and C)

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Question 33

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Gen-Fast Shoes wants to expand internationally and is deciding if its line of tennis shoes can be sold at a high price in Europe. One way for Gen-Fast Shoes to assess this is to determine whether these types of shoes in the foreign market offer customers greater

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.

Explain how pioneering costs can affect a business.

Locally manufactured Bubbles is a popular brand of detergent in Germany. However, with the entry of a foreign multinational into the market, Bubbles begins to lose market share. According to Christopher Bartlett and Sumantra Ghoshal, how can the producer of Bubbles best differentiate itself from foreign multinationals?

An oil-rich country in the Middle East wants to develop its own refining industry but lacks the technology to do so. To accomplish their goal, they decide to enter into an agreement with a U.S. firm that has this technology. The U.S. firm is pleased to make this agreement because without it, they could never gain value from their technology in this country due to its limits on FDI. What type of agreement did these companies use?

Describe the pros and cons of greenfield ventures.

Supple SkinCare Inc. is spending significant money educating customers on the value of its mineral-based skincare line as it moves into several new international markets. The money to educate customers is a form of

If a firm is seeking to enter a market via a wholly owned subsidiary where there are already well-established incumbent enterprises, and where global competitors are also interested in establishing a presence, a suitable mode of entry is a(n)

When WoodFire Stoves decided to be a first-mover in the Canadian market, it had to spend 25 percent of its budget on promotional videos and other educational tools that explained why a WoodFire Stove product was a necessary and a cost-saving method of heat. The costs the company incurred are known as

When two or more independent firms establish a new firm together, it is an example of

Jumpin' Joey Tennis Shoes, 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 mode of entry into foreign markets is most suitable for Jumpin' Joey Tennis Shoes?

How can firms avoid incurring high transport costs when exporting bulk products?

Describe the advantages and disadvantages of acquisitions.

Storm Fighters Inc. makes winter clothing in the United States, and it is looking to distribute its products in Europe. Rather than build and maintain a manufacturing facility in the Netherlands, the company decides to ship its winter gear directly from its plant in Montana. What type of entry mode is the company using?

An international business can command higher prices for a particular product in a foreign market when

Bossy Boots decided to export its products by hiring local marketing agents in each country. Over the years, Bossy Boots ran into various problems with these local marketing agents that affected both sales and profitability. Bossy Boots can overcome its problems with local marketing agents by

Cross-licensing agreements increase the probability that firms might lose their know-how and technology to a partner firm.

A country that ________ presents a favorable benefit-cost-risk trade-off scenario for foreign expansion.