CH 3: ENTRY STRATEGIES - EXPORT, LICENSING & FRANCHISING

Entry mode is the institutional arrangement by which a firm gets its products, technologies, human skills or other resources into a market.

• TRUE

• FALSE

  Licensing is an example of complex mode of entry.

• TRUE

• FALSE

Exporting is the strategy of producing the products in the home country and sell them to customers in the domestic market.

• TRUE

• FALSE

Exporting is commonly used by firms at the advanced stage of internationalization.

• TRUE

• FALSE

Exporting enables the company to diversify its customer base, hence reducing dependence on the home market.

• TRUE

• FALSE

Licensor is the owner of the asset while licensee is the user of the asset.

• TRUE

• FALSE

Using licensing as the entry strategy, the firm need to invest capital in the foreign market.

• TRUE

• FALSE

Franchising is the arrangement by which the firm allows another the right to use an entire business system in exchange for fees, royalties or other forms of compensation.

• TRUE

• FALSE

One of the advantages of franchising is difficult to maintain control over franchisee.

• TRUE

• FALSE

Licensing requires ongoing assistance from the owner while franchising involve a one-time transfer of property.

• TRUE

• FALSE