WorksheetsMGM5966 W10 Lecture 9 Recap
Total questions: 10
Worksheet time: 5mins
High investment risk due to large capital commitment & long pay-back periods, yet no co-owner & integration risks, is...
Greenfield
Joint venture
Full acquisition
Partial acquisition
Non-equity mode is a mode of entry that involves investing in a local firm.
True
False
Which of the following is an advantage shared by both greenfield operations and acquisitions?
Protection of know-how
Add new capacity to industry
Fast entry speed
Low development costs
An advantage of joint ventures is _____.
the protection of know-how
the access to partners’ assets
the ease of global coordination
the complete equity and operational control
Equity modes do not require the establishment of independent organizations overseas.
True
False
What is a disadvantage of exporting as a foreign market entry mode?
High level of control over operations
Limited market presence and local responsiveness
Higher investment requirement
Lower exposure to exchange rate fluctuations
What are the disadvantages of acquisitions as a foreign market entry mode?
Higher integration challenges
Fast entry speed
Immediate access to an established customer base and distribution network
Higher level of flexibility in operations
Turnkey contracts imply that the client firm...
do everything itself
try find a long term partner
don't want to get involved with the start-up burden
know the foreign culture's laws and culture
What is the main characteristic of a merger as a mode of entry?
An agreement between two parties to cooperate in a certain way for a certain time
A more-than-friendly acquisition between roughly equal companies
A financial transaction to gain control of the target's operations
The formal establishment of business operations on foreign soi
What is the main characteristic of licensing as a mode of entry?
The company establishes business operations on foreign soil
The licensee acquires the right to use products and goods, while the ownership remains with the licensor
The licensor and licensee merge into a new legal entity
The licensor permits the franchisee to use its brand name for a fee
