WorksheetsTopic 11- Selecting and Managing Entry Modes
Total questions: 15
Worksheet time: 8mins
What is an entry mode in international business?
A type of financial investment strategy
A method by which a company enters a foreign market
A legal agreement between two domestic companies
A strategy used to avoid exporting
Which of the following is an export strategy step?
Acquiring a local business
Identifying a potential market
Buying a wholly owned subsidiary
Ignoring cultural differences
Which of the following is an advantage of direct exporting?
Higher control over sales and profits
Less involvement in the foreign market
Higher risk of fraud
No need for market research
Which of the following describes countertrade?
A company acquires another company in a foreign market
A company establishes a wholly owned subsidiary abroad
A company exchanges goods or services without using money
A company licenses its brand to a foreign partner
Which of the following is an example of countertrade?
Selling products through an intermediary
Engaging in barter transactions between two companies
Setting up a franchise in a foreign country
Investing in foreign stocks and bonds
What is an export management company (EMC)?
A company that manages a business’s import taxes
A company that handles export activities for other companies
A company that monitors exchange rates
A company that handles domestic trade regulations
Which of the following is NOT a type of contractual entry mode?
Licensing
Franchising
Turnkey projects
Exporting
Which of the following describes licensing?
A firm grants another company the right to use its intangible property
A company establishes its own factory abroad
A company sells goods through direct exporting
A firm merges with a local competitor
What is a franchising agreement?
A company supplies another firm with a brand name and operational support
A company allows another firm to use its raw materials
A firm grants another firm full ownership of intellectual property
A company enters a short-term trade partnership
Which of the following is an advantage of franchising?
High financial risk
Slow market expansion
Low cost and low risk
Complete control over foreign operations
Which of the following describes a joint venture?
A business that is jointly owned by two or more companies
A company that operates independently in a foreign market
A company that sells goods through a distributor
A firm that only exports to a specific country
What is a wholly owned subsidiary?
A company that shares ownership with a foreign partner
A company that is completely owned and controlled by a parent company
A company that licenses its products to a local business
A company that only imports products
What is a key disadvantage of a wholly owned subsidiary?
Lack of managerial control
High financial cost and risk
No involvement in the foreign market
Reduced brand recognition
Which factor is most important when selecting an entry mode?
Cultural environment
Political and legal stability
Market size
All of the above
Which of the following describes a strategic alliance?
Two or more companies cooperate without forming a new entity
A company fully acquires a foreign business
A company exports its goods through indirect channels
A company provides full financial support to a foreign partner
