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WorksheetsMBS INT BUS S5 Int Market Entry Strategies and Global Expansion
Total questions: 20
Worksheet time: 10mins
What is one of the simplest market entry strategies?
Franchising
Joint ventures
Exporting
What is a benefit of exporting?
Full control over quality in foreign markets
No shipping costs
Minimal investment required
What is a challenge of exporting?
Lack of control over tariffs
Unlimited access to all foreign markets
Tariffs and shipping costs
How does franchising help companies expand internationally?
By reducing product variety
By allowing rapid expansion with reduced risk
By eliminating fees for partners
What is a potential downside of franchising?
Loss of brand identity
Difficulty maintaining control over quality and reputation
Lack of global demand for franchises
What is an advantage of joint ventures?
Avoiding local expertise
Reducing costs by eliminating partners
Sharing risks, costs, and local knowledge
What is a common risk of joint ventures?
Complete control over decisions
Conflicts over control and decision-making
Low returns on investment
What does a merger or acquisition provide for a business?
Instant access to local assets, knowledge, and customer bases
Full ownership of a foreign company
No financial risks involved
What is one risk associated with mergers?
Unlimited market access
Complete avoidance of local competition
Significant financial and integration risks
What must businesses consider when assessing market potential?
Global competitors only
Domestic demand
Consumer demand, local competition, and regulatory environments
Why is it important to understand political risk in foreign markets?
Political instability can impact business operations
Political risks have no effect on business
Political risks only affect local businesses
What is a common challenge of exporting to the EU?
The ease of doing business
Navigating strict regulatory challenges
High political risk compared to other markets
How does franchising differ from exporting?
Franchising involves granting a foreign partner rights to use a company’s brand
Franchising is always more cost-effective
Exporting does not involve market entry fees
Why can franchising pose higher risks for a company's brand?
It can be difficult to maintain control over quality and reputation
Franchisees never adapt to local cultures
There is no risk to brand image
What is a benefit of joint ventures?
Full control of the foreign market
No need for local knowledge
Sharing local expertise with reduced financial risk
What strategic consideration should be made for mergers?
Avoiding regulatory checks
Minimizing due diligence
Thorough due diligence to assess financial and integration risks
How did Starbucks enter the Indian market?
By using a franchising model
By acquiring local coffee shops
Through a joint venture with Tata
How does Starbucks adapt to local market demands in its global expansion?
By keeping its standard menu globally
By adjusting products and operations to local tastes
By avoiding changes to its operations
What strategy did McDonald’s use to expand globally?
Franchising
Joint ventures only
Mergers and acquisitions
What challenge did McDonald's face in franchising for global growth?
Adapting products to suit local tastes
Increasing competition with local businesses
Avoiding brand standardization
