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International Business
Q:
One of the most common mistakes made by new exporters is not getting advice.
Q:
West Electronic Corporation sources goods and services for its electronics products from different locations around the globe in an attempt to take advantage of differences in the cost and quality of labor and land. This practice demonstrates the:
A. globalization of production.
B. localization of markets.
C. increasing differences in tastes and preferences of consumers across the world.
D. nationalization of private enterprises.
E. rise of communism throughout the globe.
Q:
Which of the following best illustrates the globalization of production?
A. Daily Diamonds Inc. buys diamonds from South Africa and exports them to India for the cutting process.
B. Evan Swan, a U.S. based fashion designer, is planning to open a flagship store in China to serve the Asian market.
C. Uncle Crab, a UK fast food chain, has been serving customers worldwide through its franchises.
D. Silver Unicorn Inc. uses sales personnel from the respective host country to sell its products and services.
E. Pizza Gallery, an Italian pizza chain, customizes its pizzas and pastas to suit the tastes of its American and Australian customers.
Q:
Reverse trade missions try to find import sources in foreign countries for U.S. producers.
Q:
The only export support available in the United States at the federal level is through trade. gov.
Q:
The _____ refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors such as labor, energy, land, and capital.
A. globalization of markets
B. augmentation of products
C. amplification of production
D. globalization of production
E. capitalization of markets
Q:
Globalization results in a greater degree of _____ across markets than would be present otherwise.
A. regulatory control
B. diversity
C. homogeneity
D. administrative barrier
E. communism
Q:
Once a firm determines that a market exists for its products, it needs to decide to export directly or indirectly.
Q:
Which of the following statements best supports the claim that greater uniformity replaces diversity in the context of global markets?
A. Differences in business systems and legal regulations, lead companies to customize their marketing strategies, product features, and operating practices to best match conditions in a particular country.
B. As rival global firms follow each other across countries, they bring with them their brand names, products, and marketing strategies from other national markets, thus creating homogeneity across markets.
C. Truly innovative companies succeed by developing products that serve specific needs of the local markets.
D. The volume of goods, services, and investment crossing national borders has expanded at a slower rate than world output for more than half a century.
E. The most global of markets are not typically markets for consumer products as significant differences in consumer tastes and preferences still exist among national markets.
Q:
CIBERs are international business research and education efforts located at U.S. universities.
Q:
Which of the following is most likely to be the best suited product for a global market?
A. Microprocessors
B. Fast food like hamburgers
C. Clothes and accessories
D. Bank and other personal services
E. Household furnishings
Q:
The FTA's Market Access and Compliance Department monitors foreign country compliance with trade agreements.
Q:
Automobile companies promote different car models in different countries depending on a range of factors such as demographics, local taste, local fuel costs, income levels, traffic congestion, and cultural values. This most likely demonstrates that:
A. significant differences still exist among national markets.
B. cultural diversity has been replaced by global uniformity.
C. the global market is less complex than national markets.
D. a company does not have to be the size of a multinational giant to facilitate, and benefit from, the globalization of markets.
E. the social norms in a country do not affect purchase decisions of consumers.
Q:
The International Trade Administration (ITA) is a good place for U.S. beginning exporters to start out.
Q:
Which of the following statements is true regarding the globalization of markets?
A. As a result of the globalization of markets, tastes and preferences of consumers in different nations are beginning to differ more.
B. By offering the same basic product worldwide, firms fail to create a global market.
C. There still exist significant differences among national markets along many relevant dimensions, including distribution channels, culturally embedded value systems, and legal regulations.
D. The most global of markets are not typically markets for industrial goods and materials, but markets for consumer products.
E. A company has to be the size of a multinational giant, such as Citigroup or Coca-Cola, to facilitate, and benefit from, the globalization of markets.
Q:
The first step in finding a foreign market for a product is to determine whether a market exists for a firm's products.
Q:
_____ refers to the shift toward a more integrated and interdependent world economy.
A. Forward integration
B. Mass customization
C. Globalization
D. Commercialization
E. Vertical integration
Q:
Companies decide to export to increase their sales and profits or to protect them from being eroded.
Q:
Which of the following has reduced as a result of globalization?
A. Volume of goods and services crossing national borders
B. Foreign exchange transaction
C. Procuring product inputs from all over the world
D. Differences in material culture between national economies
E. Deregulation of markets
Q:
Exporters of a turnkey project may include which of the following?
A. A contractor that specializes in designing and erecting plants in a particular industry
B. A producer of a factory
C. A sales company
D. All of the above
E. Two of A, B, and C
Q:
Differences among countries require that an international business vary its practices country by country.
Q:
A turnkey project includes all of the following except:
A. plan design.
B. technology supply.
C. supply of raw material.
D. personnel training.
E. none of the above. (All four are included.)
Q:
Despite all the talk about the emerging global village, differences between countries such as cultures and political systems are very profound and enduring.
Q:
A business established for the purpose of marketing goods and services, not producing them, is:
A. a franchisee.
B. a direct exporter.
C. a sales company.
D. a joint venture.
E. two of the above.
Q:
A firm has to become a multinational enterprise, investing directly in operations in other countries, to engage in international business.
Q:
The disadvantages of indirect exporting include:
A. foreign business can be lost if the exporter changes supply sources.
B. no expertise or large cash outlays are required.
C. the firm gains little experience from transactions.
D. two of the above.
E. all of A, B, and C.
Q:
Highly indebted poor countries (HIPCs) can bootstrap themselves out of poverty by pursuing retaliatory trade policies rather than free trade policies.
Q:
The disadvantages of indirect exporting include:
A. firms gain little experience from the transaction.
B. commissions have to be paid to agents.
C. firms are dependent on the agents.
D. all of the above.
E. two of A, B, and C.
Q:
In general, as countries get richer, they enact tougher environmental and labor regulations.
Q:
A company can engage in indirect exporting by using which of the following companies in its own country?
A. Manufacturers' export agents
B. Export merchants
C. Sales offices
D. All of the above
E. Two of A, B, and C
Q:
One concern of globalization opponents is that it undermines the influence of supranational organizations and promotes the sovereignty of individual nation-states.
Q:
A company can engage in indirect exporting by using which of the following companies in its own country?
A. Import merchants
B. Sales companies
C. Export commission agents
D. Overseas merchants
E. Two of the above
Q:
It is possible that economic growth in developed nations has offset the fall in the share of national income enjoyed by unskilled workers, raising their living standards.
Q:
__________ permits a firm to set up an export program with a minimum of cash outlay and little special expertise.
A. A joint venture
B. Direct exporting
C. Franchising
D. Indirect exporting
E. Licensing
Q:
One concern frequently voiced by globalization opponents is that falling barriers to international trade destroy manufacturing jobs in wealthy advanced economies such as the United States and western Europe.
Q:
Companies wishing to export must first choose between:
A. exporting directly and using sales companies.
B. exporting indirectly and using joint ventures.
C. exporting directly and exporting indirectly.
D. exporting directly and licensing.
E. none of the above.
Q:
Which of the following are reasons that many firms engage in exporting?
A. Exports can allow the firm to meet customer requests for the firm to export.
B. Exports can help a company to remain price competitive in the home market.
C. Exports are the best way for gaining information about foreign markets and competition.
D. All of the above.
E. Two of A, B, and C.
Q:
In the past quarter century, the volume of cross-border trade and investment has been growing less rapidly than global output.
Q:
Many of the former Communist nations of Europe and Asia seem to share a commitment to democratic policies and free market economies.
Q:
(p. 226) Which of the following are reasons that many firms engage in exporting?
A. Exports can allow the firm to serve markets where it has no or limited production facilities.
B. Exports can offset cyclical sales in the firm's domestic market.
C. Exports can test foreign markets and foreign competition inexpensively.
D. All of the above.
E. Two of A, B, and C.
Q:
The rise of the Internet is increasing the barriers that small firms face in building international sales.
Q:
Although most international trade and investment is still conducted by large firms, many medium-size and small businesses are becoming increasingly involved in international trade and investment.
Q:
Which of the following are reasons that many firms engage in exporting?
A. Exports enable the firm to serve markets where it has sufficient production facilities.
B. Exports can offset cyclical sales in the firm's domestic market.
C. Exports eliminate the risk of losing the firm's technology to potential competitors.
D. All of the above.
E. Two of A, B, and C.
Q:
Among developing nations, the largest recipient of foreign direct investment has been China.
Q:
Most firms begin their involvement in overseas business by:
A. exporting.
B. licensing.
C. joint ventures.
D. wholly owned subsidiaries.
E. none of the above.
Q:
Throughout the 1990s, the amount of investment directed at both developed and developing nations increased dramatically
Q:
The stock of foreign direct investment refers to the total cumulative value of foreign investments in a country.
Q:
A follower firm stands the best chance for success in market-share leadership when:
A. there are high barriers to entry.
B. the firm has small size.
C. there is high potential for imitation.
D. all of the above.
E. two of A, B, and C.
Q:
In many cases, a firm entering international markets becomes a follower because:
A. barriers are high for new entrants.
B. strong patent protection exists.
C. quicker competition beats it.
D. all of the above.
E. two of A, B and C.
Q:
Beginning in the 1970s, European and Japanese firms began to shift labor-intensive manufacturing operations from developing nations to their home countries where labor costs were lower.
Q:
A pioneering firm stands the best chance for long-term success in market-share leadership and profitability when:
A. there are few cultural barriers to entry.
B. the firm has sufficient size, resources, and competencies.
C. there is high potential for imitation.
D. all of the above.
E. two of A, B, and C.
Q:
The United States accounted for a significantly larger share of the world economy in 2011 than it did in the 1960's.
Q:
Countries that markedly increased their share of world output from 1960 to 2010 included Germany, France, and the United Kingdom.
Q:
A pioneering firm stands the best chance for long-term success in market-share leadership and profitability when:
A. there are high entry barriers for competitors.
B. it has strong patent protection.
C. there are substantial investment requirements.
D. all of the above.
E. two of A, B, and C.
Q:
Alliances can allow a partner to acquire a firm's technological or other competencies, thereby raising important competitive concerns.
Q:
The Internet has been a major force facilitating international trade in services.
Q:
The existence of two or more partners, which typically have differences in strategies, operating practices, and organizational cultures, is a factor that tends to promote successful management and performance of strategic alliances.
Q:
The real costs of information processing and communication have fallen dramatically in the past two decades.
Q:
While advances in telecommunications are creating a global audience, advances in transportation are creating a global village.
Q:
Generally mergers and acquisitions are considered alliances.
Q:
Containerization has revolutionized the transportation business, significantly lowering the costs of shipping goods over long distances.
Q:
Trading and pooling alliances are typically different in their goals, optimal structures, and managerial challenges.
Q:
The globalization of markets and production and the resulting growth of world trade, foreign direct investment, and imports all imply that firms are finding it easier to protect themselves from the attack of foreign competitors.
Q:
Pooling alliances are driven by the logic of contributing dissimilar resources, while trading alliances are driven by similarity and integration.
Q:
As a result of international trade, the economies of the worlds nation-states are becoming less intertwined.
Q:
One type of strategic alliance between competitors is an R&D partnership.
Q:
Strategic alliances take many forms, including licensing, mergers, joint ventures, and joint research and development partnerships.
Q:
The lowering of trade and investment barriers allows firms to base production at the optimal location for that activity.
Q:
In a 12-country study conducted by Ernst & Young, 65 percent of U.S. companies were found to be engaged in a strategic alliance.
Q:
The Uruguay Round, held under the umbrella of GATT, extended GATT to cover services as well as manufactured goods.
Q:
After World War II, the advanced nations of the West committed themselves to increasing barriers to the free flow of goods, services, and capital between nations.
Q:
Management contracts can enable the global partner to control many aspects of a joint venture even when holding only a minority position.
Q:
When the government of a host country requires companies to have some local participation, foreign firms must engage in strategic alliances with local owners.
Q:
Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country.
Q:
It is not possible for foreign investors to control a joint venture if the host country's law prevents foreign investors from having more than 49 percent ownership.
Q:
In return for loans, the IMF requires nation-states to adopt specific economic policies aimed at returning their troubled economies to stability and growth.
Q:
In a joint venture, a management contract is often used as a control mechanism by firms, even if they hold only a minority position in the venture.
Q:
The IMF is less controversial than its sister institution, the World Bank.
Q:
Lack of control is one of the strongest arguments against a joint venture.
Q:
The WTO is seen as the lender of last resort to nation-states whose economies are in turmoil and whose currencies are losing value against those of other nations.