Entrepreneurship and Effective Small Business Management, 11e (Scarborough)
Chapter 12 Global Marketing Strategies
1) ________ is (are) said to link trading partners, whether they are giant corporations or single
individuals with a small business.
A) Technology
B) Better management
C) Higher salaries
D) Smaller organizations
Topic: Introduction
AACSB: Analytic Skills
2) Expanding a small business into international markets:
A) guarantees its success in the marketplace.
B) makes it a member of GATT automatically.
C) often helps it to grow faster and better survive competition.
D) leads to business failure for companies under $100 million in annual revenue.
Topic: Why Go Global?
AACSB: Analytic Skills
3) Becoming a global business depends on instilling a global culture throughout the organization
that permeates:
A) a little of what the company does.
B) some of what the company does.
C) a lot of what the company does.
D) everything of what the company does.
Topic: Going Global Strategies for Small Businesses
AACSB: Analytic Skills
4) As with any new venture, the entrepreneur needs to ask, and answer, all of the following
questions about the business except:
A) Is there a profitable market in which our firm has the potential to be successful for an
extended period of time?
B) Does our firm have the specific resources, skills and commitment to succeed in this venture?
C) Are there pressures domestically that are forcing the firm to seek global opportunities?
D) Are we able to efficiently travel to, from, and within our global market?
Topic: Why Go Global?
AACSB: Analytic Skills
1
5) Which of the following is true about global competition?
A) There is less of a focus on quality and more of a focus on price internationally.
B) It makes companies more customer-focused.
C) It is largely the domain of small businesses due to their flexibility.
D) It tends to shorten the life cycle of a product or service.
Topic: Why Go Global?
AACSB: Analytic Skills
6) The reality of “going global” is that the entrepreneur must understand the needs of the:
A) suppliers.
B) government.
C) customers.
D) employees.
Topic: Why Go Global?
AACSB: Analytic Skills
7) The first step to becoming a truly global company is to:
A) establish an export program.
B) find a joint venture partner.
C) begin to think globally, taking on a global attitude toward a business.
D) hire motivated, multilingual managers.
Topic: Why Go Global?
AACSB: Analytic Skills
8) A small business owner needs to consider several questions before launching an international
venture, such as:
A) Do we have the correct multinational management in place?
B) Can we find an appropriate international partner for this venture?
C) What non-tariff barriers do we have to be prepared to overcome?
D) Are we sensitive to the cultural differences of conducting international business?
Topic: Why Go Global?
AACSB: Analytic Skills
2
9) The type of companies that are an important channel of foreign distribution for small
companies just getting started in international trade or for those lacking the resources to assign
their own people to foreign markets are referred to as:
A) export management companies.
B) joint ventures.
C) sole proprietorships.
D) export trading companies.
Topic: Relying on Trade Intermediaries
AACSB: Analytic Skills
10) Often joint ventures fail because the entrepreneur didn’t:
A) define at the outset important issues such as each party’s contributions and responsibilities,
the distribution of earnings, the expected life of the relationship, and the circumstances under
which the parties can terminate the relationship.
B) understand in depth their partner’s reasons and objectives for joining the venture.
C) select a partner who shares their company’s values and standards of conduct.
D) All of the above
Topic: Joint Ventures
AACSB: Analytic Skills
11) ________ is the primary market for U.S. franchisers.
A) South America
B) Europe
C) Mexico
D) The Caribbean
Topic: International Franchising
AACSB: Analytic Skills
12) ________ involves a transaction in which a company selling goods in a foreign country
agrees to promote investment and trade in that country.
A) Countertrade
B) Export
C) Import
D) Bartering
Topic: Countertrading and Bartering
AACSB: Analytic Skills
3
13) Small businesses go global:
A) for very different reasons than large businesses do.
B) through joint ventures with large companies.
C) when they realize their success and survival depends on them going global.
D) often between their fifth and seventh year of existence as a domestic company.
Topic: Why Go Global?
AACSB: Analytic Skills
14) The simplest and least expensive way to conduct international business is through:
A) foreign licensees.
B) a Web site.
C) joint ventures.
D) trade intermediaries.
Topic: Going Global Strategies for Small Businesses
AACSB: Analytic Skills
15) A relatively easy way of getting into international marketing is through ________ who act as
distributors in foreign countries for domestic companies of all sizes.
A) foreign licensees
B) international franchises
C) joint ventures
D) export trading companies
Topic: Export Trading Companies
AACSB: Analytic Skills
16) A(n) ________ is a business that buys and sells products in a number of countries, offering a
range of services—importing, exporting, shipping, distributing, and others—to their clients.
A) foreign joint venture
B) export trading company
C) foreign licensee
D) resident buying office
Topic: Export Trading Companies
AACSB: Analytic Skills
4
17) An export trading company is:
A) a government-owned or business-owned facility set up in a foreign country to buy products
that are made there.
B) a firm in an overseas distribution network selling noncompetitive products made by other
firms.
C) formed by an agreement by which a licenser gives a foreign licensee the right to use a patent,
or profits.
D) a business that buys and sells products in many countries, either in its own name, or as an
agent for its buyer-seller clients.
Topic: Export Trading Companies
AACSB: Analytic Skills
18) ________ is (are) one of the trading intermediaries a small company can use to enter the
global marketplace.
A) Export merchants
B) Joint ventures
C) International franchising
D) Establishing international locations
Topic: Manufacturer’s Export Agents
AACSB: Analytic Skills
19) A(n) ________ is a government- or privately-owned company established in a foreign
country for the purpose of buying goods made there.
A) export trading company
B) resident buying office
C) foreign distributor
D) export merchants
Topic: Resident Buying Offices
AACSB: Analytic Skills
5
20) A resident buying office is:
A) a business that buys and sells products in many countries, either in its own name, or as an
agent for its buyer-seller clients.
B) a firm in an overseas distribution network selling noncompetitive products made by other
firms.
C) a government-owned or business-owned facility set up in a foreign country to buy products
that are made there.
D) formed by an agreement where a licenser gives a foreign licensee the right to use a patent,
or profits.
Topic: Resident Buying Offices
AACSB: Analytic Skills
21) Evie works for a domestic wholesaler who does business in foreign markets, buying goods
from domestic companies and selling them in foreign markets. Evie’s firm is a(n):
A) resident buying office.
B) export trading company.
C) foreign distributor.
D) export merchant.
Topic: Export Merchants
AACSB: Reflective Thinking
22) ________ participating companies get antitrust immunity, allowing them to cooperate freely.
A) Foreign joint venture
B) Trade intermediary
C) Export venture
D) Export management company
Topic: Joint Ventures
AACSB: Analytic Skills
23) In a(n) ________, a domestic small business forms an alliance with a company in the target
nation for the purpose of exporting to that market.
A) foreign joint venture
B) trade intermediary
C) domestic joint venture
D) export management company
Topic: Joint Ventures
AACSB: Analytic Skills
6
24) The most important ingredient in the recipe for a successful joint venture is:
A) choosing the right country or region.
B) generating sufficient capital to pursue the venture.
C) choosing the right partner.
D) hiring efficient employees to carry out the venture.
Topic: Joint Ventures
AACSB: Analytic Skills
25) The U.S. Commerce Department, the SBA, and the Trade Administration provide a number
of services. TOP—the trade opportunity program—is one and through it entrepreneurs can:
A) receive up-to-the minute pre-screened sales leads, including joint venture possibilities.
B) establish business relationships in major markets by helping them make networking contacts.
C) gain access to contact and product information for more than 82,000 foreign distributors.
D) place advertisements that will reach thousands of foreign customers.
Topic: Resources for Locating a Trade Intermediary
AACSB: Analytic Skills
26) If you can’t afford to invest in foreign facilities, don’t have time to even learn the foreign
market, but you are willing to give someone else the right to make and market your product for a
fee and royalties, your best bet for entering the foreign market is:
A) a foreign management company.
B) joint venturing.
C) foreign licensing.
D) international franchising.
Topic: Foreign Licensing
AACSB: Reflective Thinking
27) Foreign licensing has its greatest potential in the licensing of:
A) products.
B) intangibles.
C) goods.
D) franchises.
Topic: Foreign Licensing
AACSB: Analytic Skills
7
28) Domino’s Pizza, McDonald’s, etc., in Japan and Europe are examples of:
A) foreign management companies.
B) joint venturing.
C) foreign licensing.
D) international franchising.
Topic: International Franchising
AACSB: Reflective Thinking
29) In international franchising, ________ is a “hot spot” for U.S. franchisers.
A) China
B) India
C) Europe
D) Both A and B
Topic: International Franchising
AACSB: Analytic Skills
30) Countertrades have significant drawbacks, including:
A) getting goods that are of no direct use to the seller.
B) receiving currency that cannot be exchanged outside the foreign nation.
C) needing a trading intermediary to arrange the countertrade, thereby raising costs.
D) being limited in size to $100,000 per deal.
Topic: Countertrading and Bartering
AACSB: Analytic Skills
31) The first step an entrepreneur should take when starting an export business is to:
A) recognize that the tiniest companies and least experienced entrepreneurs have the potential.
B) research and pick target markets.
C) develop a distribution strategy.
D) find his/her customer.
Topic: Exporting
AACSB: Analytic Skills
8
32) To break into international markets the entrepreneur needs to take several steps including:
A) analyzing his/her commitment to the effort.
B) researching the markets and picking a target market.
C) developing a distribution strategy.
D) All of these
Topic: Exporting
AACSB: Analytic Skills
33) Candi is thinking through a number of management issues in making her exporting decision.
She is thinking about her company’s ________ capacity when she is thinking about how
exporting will affect meeting domestic orders, her pricing structure, collection process, and what
it will cost her for the company to make enough product for foreign export.
A) financial
B) management
C) production
D) marketing
Topic: Production Capacity
AACSB: Reflective Thinking
34) The biggest barrier to small business exports is:
A) the lack of experience.
B) the lack of financing.
C) not understanding other cultures.
D) not having appropriate products for export.
Topic: Financial Capacity
AACSB: Analytic Skills
35) ________ is the exchange of goods and services for other goods and services.
A) Countertrade
B) Export
C) Import
D) Bartering
Topic: Countertrading and Bartering
AACSB: Analytic Skills
9
36) When collecting for the sale of foreign goods, a small business will use a ________, an
agreement between their bank and the foreign buyer’s bank that guarantees payment.
A) bank draft
B) foreign sales agreement
C) tariff voucher
D) letter of credit
Topic: Collect Your Money
AACSB: Analytic Skills
37) Sometimes, once established in international markets, businesses ________, despite the
frustrations of securing services, the significant capital investment involved, etc.
A) offer foreign licenses
B) sell international franchises
C) establish an international location
D) use trade intermediaries
Topic: Establishing International Locations
AACSB: Analytic Skills
38) Key to successfully establishing an international location is:
A) securing the necessary licenses to operate in the foreign country.
B) finding the right person to manage the international office.
C) making a substantial investment in personnel.
D) being able to speak the language of the foreign country.
Topic: Establishing International Locations
AACSB: Multicultural and Diversity
39) Of the three domestic barriers exporters face, ________ is the biggest.
A) information
B) attitude
C) financing
D) language
Topic: Barriers to International Trade
AACSB: Multicultural and Diversity
10