NEW
Font size
WorksheetsEntering Foreign Market (2-3:30)
Total questions: 20
Worksheet time: 10mins
All of the following are the basic entry decisions for firms expanding internationally, except.
Which markets to enter
When to enter them and on what scale
Amount of investment and benefits
Choice of entry mode
Which of the following are not cons of Greenfield ventures?
slower to establish
risky because they have no proven track record
it gives the firm a much greater ability to build the kind of subsidiary company that it wants
can be problematic if a competitor enters via acquisition and quickly builds market share
Entry is early when firms enters a domestic market before other foreign firms
True
False
Cost that an early entrant has to bear that a later entrant can avoid
Pioneering cost
Overhead cost
Marketing Cost
Introduction Cost
Why do acquisitions fail?
there is inadequate pre-acquisition screening
the possibility of being preempted by more aggressive global competitors that enter via acquisitions and build a big market presence
moving rapidly once the firm is acquired to implement an integration plan
Entry is early when firms enters a domestic market before other foreign firms
True
False
If the firm is seeking to enter a market in which there are already well-established incumbent enterprises, and in which global competitors are also interested in establishing a presence, acquisition may be the better mode of entry.
True
False
The most favorable markets are politically unstable developed and developing nations with free market system, low inflation and low private sector debt.
True
False
A Japanese car manufacturer acquires an Italian producer of car tires. This is an example of a greenfield investment.
True
False
First mover disadvantages are associated with exiting a foreign market before other international businesses
True
False
Ability to realize location and experience curve economies are advantages of exporting.
True
False
Disadvantages of exporting exept,
high transportation costs;
trade barriers;
lack of long-term market presence
problems with local marketing agents
Advantage of turnkey contracts Is ability to earn returns from process technology skills in countries where FDI is restricted
True
False
Low development costs and risks are disadvantages of licensing
True
False
Disadvantages of licensing except,
creating efficient competitors
lack of control over technology
inability to realize location and experience curve economies
inability to engage in global strategic coordination
Low development costs and risks are advantages of licensing and franchising
True
False
Disadvantages of franchising is lack of control over quality; inability to engage in global strategic coordination
True
False
Advantages of joint ventures except:
access to local partner's knowledge
sharing development costs and risks
politically acceptable
Which of the following is not a mode of entry into foreign markets?
exporting
importing
international licensing
greenfield strategy
________ is the most common form of international business activity
Exporting
Licensing
Greenfield strategy
Management contract
