QCE Business 3.1 Explain Modes of Entry

What is a global market entry mode?

• A method a business uses to establish its presence in another country

• A method of setting prices for exports

• A type of international advertising strategy

• A strategy for hiring employees overseas

Which of the following is NOT a mode of entering global markets?

• Licensing

• joint ventures

• domestic selling

• strategic alliances

What is exporting?

• Setting up a foreign subsidiary

• Selling products made in one country to another country

• Licensing a business model to another country

• Partnering with a local firm

Which of the following is an advantage of exporting?

• low transportation costs

• Low risk and cost of international operations

• High control over market

• Guaranteed market access

What is a disadvantage of exporting?

• High level of market control

• High tariffs and regulatory barriers

• Limited exchange rate risk

• Low shipping costs

What does licensing involve?

• The transfer of intellectual property to a foreign business

• Opening a sales subsidiary in another country

• Importing goods from another country

• Establishing a joint venture

Which of the following is an example of licensing?

• McDonald's franchising

• Nike allowing a Chinese firm to use its logo

• Apple setting up a store in Paris

• A partnership between Coca-Cola and local distributors

What is the main advantage of licensing as a market entry mode?

• Full control over the foreign operation

• High risk but high returns

• Access to foreign markets with minimal investment

• No competition from local firms

What is a major risk associated with licensing?

• Loss of control over manufacturing quality

• High initial investment costs

• Limited legal protection for intellectual property

• Complex logistics and shipping

What is a joint venture?

• A company buying another company

• A partnership between two companies to enter a foreign market

• Setting up a foreign sales office

• An exclusive license to use a company’s technology