Unit 2 Foreign Market Entry Modes

Exports are advisable when the company is small and when there is no pressure for manufacturing in host country?

• True

• False

An export consortium is a type of direct/active exporting

• True

• False

Which type of direct exporting carries out all marketing activities in the host country (it is a foreign firm established in the host country)?

• Representative Office

• Commercial Branch

• Sales Subsidiaries

• Export Broker

What is the main disadvantage of franchising as a contractual agreement?

• Risk of losing technological know-how to the licensee

• Host government restrictions

• Highly motivated franchisees

• Limited control over what is going on inside the subcontractors’ plant

The basic idea of contractual agreements is to transfer knowledge without necessarily becoming involved in FDI

• True

• False

Which type of frachising is the master franchising (subcontracting of franchising)?

• Business Format

• Product

• Manufacturing

A project in which clients pay contractors to design and construct new facilities is which type of contractual agreement?

• Licensing

• Franchising

• Turnkey Project

• Management Contract

What are other motives/common objectives for engaging in FDI?

• To avoid government interventionism

• To provide support to other activities

• To obtain financial benefits

• All of the above

What is the main advantage of a Joint Venture (JV) with a local partner?

• More focused marketing efforts

• The foreign firm shares costs and risks with a local partner

• More control over marketing activities

• Better and quicker information about the host market

What are some disadvantages of a Joint Venture (JV) with a local partner?

• Benedits need to be shared

• Access to knowledge about the host country

• JVs may be politically more acceptable

• Operational control may be difficult to aahieve