MKT1204 Chapter 3 revision

The particular market-entry strategy that company executives choose depends on all of the following except:

• their vision.

• their attitude toward risk.

• the availability of investment capital.

• the possibility of significant adaptation.

Licensing as a market entry mode has several disadvantages and opportunity costs, which do not include:

• limited market control.

• agreement may have short life.

• similar product or technology development by licensee.

• adaptations by licensee to fit local tastes.

________ provides technical specifications to a subcontractor or local manufacturer, who then oversees production.

• A joint venture

• Licensing

• A global strategic alliance

• Contract manufacturing

The advantages of contract manufacturing include all of the following except:

• access to technical specifications by subcontractors.

• access to technical specifications by local manufacturers.

• limited commitment of financial resources.

• considerable commitment of management resources.

Pollo Campero, a chicken restaurant chain based in Central America, is using the following method for expanding operations in the United States:

• joint ventures.

• licensing.

• franchising.

• acquisition.

1.       Honda has invested $550 million in building an assembly plant in Greensburg, Indiana; IKEA spent nearly $2 billion to open stores in Russia; and South Korea's LG Electronics purchased a 58% stake in Zenith Electronics. All of these are examples of:

• exporting.

• mergers and acquisitions.

• licensing.

• foreign direct investment (FDI).

1.       A(n) ________ is an entry strategy for a single target country in which the partners share ownership of a newly created business entity.

• franchise
• acquisition
• licensing

• joint venture

In 2016, one of the largest merger and acquisition deals was the proposed acquisition of American agricultural giant Monsanto by Germany-based Bayer for $66 billion. This type of transfer is known as:

• full ownership.

• equity stake.

• greenfield investment.

• joint venture.

Disadvantages of joint venturing can include all of the following except:

• joint venture partners must share rewards as well as risks.

• joint ventures can have the potential for conflict between partners.

• a dynamic joint venture partner can evolve into a strong competitor.

• joint ventures allow partners to achieve synergy.

How does a joint venture benefit companies looking to expand internationally?

• It eliminates the need for legal agreements

• It provides access to local market knowledge and networks

• It allows one company to take full control of the partnership

• It increases operational costs significantly