MOM CHAPTER 12

Which of the following is not one of the three steps in increasing market share, revenue, and profits?

• assess alternative markets

• evaluate respective costs, benefits, and risks

• perform a situation analysis

• select market with most potential for entry or expansion

What is the first step in selecting a foreign market?

• assessing market potential

• monitoring major markets

• evaluating host country's trade policies

• assessing general legal and political environments

Which of the following is the least effective indicator of a country's potential for economic growth?

• GDP

• per capita income

• energy consumption

• television viewing patterns

________ refer to expenses incurred by the firm as it enters a new foreign market.

• Indirect costs

• Direct costs

• Opportunity costs

• Variable costs

Gameware recently entered the German market. Gameware executives also wanted to enter the Canadian market but had to delay the entry because of limited resources. What type of costs will Gameware incur as a result of being unable to enter the Canadian market?

• indirect costs

• direct costs

• opportunity costs

• variable costs

Gameware recently entered the German market. Gameware incurred significant costs associated with setting up a business operation in Frankfurt, transferring managers to Germany, and shipping equipment to the German facility. Gameware's expenses are best described as ________.

• opportunity costs

• setup costs

• direct costs

• indirect costs

Which of the following are potential benefits of entering a new market?

• eliminating synergy with other operations

• increasing manufacturing costs

• limiting competitors' profits

• logistical complexities

Which theory listed below is useful in deciding which mode of entry to use when entering foreign markets?

• ownership advantage theory

• internalization theory

• eclectic theory

• relative factor endowments

The informational, political, and cultural disadvantages that foreign firms face when trying to compete against local firms in the host country market are referred to as ________.

• opportunity costs

• liability of foreignness

• internalization disadvantages

• the burden of internationalization

Which of the following is the most intensive mode of entry into foreign markets?

• exporting

• importing

• international licensing

• FDI