Chapter 3 (2)

1. Franchising involves:

• The transfer of patented information and trademarks, information and know-how as well as information needed to sell a product or service

• The use of franchising for licensing new technologies in global markets

• The transfer of a business concept, with corresponding operational guidelines, to non-domestic parties for a fee

• Greenfield investment in a completely new facility, or acquisition of or merger with an already established local firm

2. Which of the following is NOT a risk of exporting?

• Tariff barriers

• Transportation costs

• Prime interest rates

• Delegation of marketing activities to a local agent

3. “One key to making the alliance work is to select …. “

• Strong competitors

• Abundant resources

• Right ally

• Right markets

4. Which of the following is NOT a strategic alliance?

• Joint marketing campaign

• Cooperative product development

• Joint venture

• Merger

5. Which are NOT the advantage of Greenfield Ventures?

• Preempt competitors

• Can build subsidiary it wants

• Possibly less risk

• Easy to establish

6. Companies such as Coca-Cola and Disney have achieved growth through:

• Piggybacking

• Licensing

• Joint venture

• Exporting

7. One of the following is NOT among the main internal factors affecting the choice for market entry mode:

• International experience

• Demand uncertainty

• Product

• Firm size

8. The magnitude of the advantages and disadvantages associated with an entry mode is determined by:

• The surface area of the country

• The transport costs

• Trade barriers

• Economic and political risks

9. Which of the following is NOT a mode of entry into foreign markets?

• Export

• International joint venture

• Internationalization

• Franchising

10. What is the difference between Franchising and Licensing?

• Inability to engage in global strategic coordination

• Inability to realize location and experience curve economies

• High development costs and risks

• Low development costs and risks