International Business Modes of Entry Quiz

Which mode of entry is typically the easiest way to enter an international market?

• Acquisitions

• Exporting

• Outsourcing

• Partnership

What is the main advantage of exporting as a mode of entry?

• Gaining control of the target's operations

• Sharing risks and expertise with another enterprise

• Avoiding the expense of establishing operations in the new country

• Gaining access to local expertise

Most of the Asian countries, including China, Vietnam, Indonesia, and India are _____________________ for the U.S.

• Contract Manufacturers

• Artisans

• Helpers

• Partners

What is the main characteristic of licensing as a mode of entry?

• The company establishes business operations on foreign soil

• The licensee acquires the right to use products and goods, while the ownership remains with the licensor

• The licensor and licensee merge into a new legal entity

• The licensor permits the franchisee to use its brand name for a fee

What is the main motivation for companies to consider a partnership as a mode of entry?

• Avoiding the expense of establishing operations in the new country

• Risk and reward sharing

• Acquiring the right to use products and goods

• Gaining control of the target's operations

The arrangement between Tata and Starbucks is an example of ____________

• Export

• Partnership

• Takeover

• Joint Venture

What is the main characteristic of a merger as a mode of entry?

• An agreement between two parties to cooperate in a certain way for a certain time

• A more-than-friendly acquisition between roughly equal companies

• A financial transaction to gain control of the target's operations

• The formal establishment of business operations on foreign soil

Which mode of entry involves partnering with specialized manufacturers to produce goods on behalf of a hiring company?

• Outsourcing

• Licensing

• Acquisitions

• Joint Venture

What is the main characteristic of foreign direct investment (FDI) as a mode of entry?

• The licensee acquires the right to use products and goods, while the ownership remains with the licensor

• The building of factories, sales offices, and distribution networks to serve local markets in a nation other than the company’s home country

• A financial transaction to gain control of the target's operations

• An agreement between two parties to cooperate in a certain way for a certain time

What is the main motivation for companies to consider a joint venture as a mode of entry?

• To divide the risk with other parties and leverage each other’s strengths

• To gain control of the target's operations

• To avoid the expense of establishing operations in the new country

• To acquire the right to use products and goods