76) Kwan wants to open a new business in his own country, Singapore. He has decided on a
form of licensing that will provide him with a standard package of products, systems, and
management services in order to sell fast food to local residents. What is the form of business
Kwan has chosen?
A) direct sales
B) indirect exporting
C) joint venture
D) strategic alliance
E) franchising
77) Why are foreign laws and regulations friendly toward franchising?
A) It is an important form of horizontal market integration.
B) It gives the franchiser little control on marketing of the products at the point of final sale.
C) It tends to foster local ownership, operations, and employment.
D) It provides an effective blending of skill decentralization and operational centralization.
E) It provides to the franchiser market knowledge, capital, and personal involvement in
management.
78) The key factors that influence success of franchising approaches are monitoring costs (based
on physical and cultural distances), the principal’s international experience, and
A) the principal’s financial investment in the business.
B) the principal’s marketing expertise.
C) the brand equity in the new market.
D) learning the competition.
E) the level of involvement from the company.
79) In the context of foreign market entry, a ________ is a business relationship established by
two or more companies to cooperate out of mutual need and to share risk in achieving a common
objective without forming a separate legal entity.
A) direct sales group
B) consortium arrangement
C) franchising arrangement
D) strategic international alliance
E) joint venture
80) What refers to two or more participating companies joining forces to create a separate legal
entity to facilitate doing business in the international arena?
A) indirect exporting
B) franchise
C) license arrangement
D) joint venture
E) direct investment agreement
81) What is a partnership called in which several companies have joined forces to create a
separate legal entity to facilitate doing business in a country where none of the participants is
currently active?
A) a consortium
B) a franchise pact
C) a license arrangement
D) indirect exporting
E) direct foreign investment
82) A consortium differs from a joint venture in that a consortium
A) usually operates in a country in which the participants are already active.
B) typically involves a large number of participants.
C) restricts the right to hold an equity position by its major partners.
D) does not involve the creation of a separate legal entity.
E) is formed mainly for executing short-term projects.
83) A small-scale apparel manufacturer in Florida collaborates with several other similar firms
and they form a separate company in India. None of the participants in this collaboration has
previously had active operations in the Indian market. The newly created firm manufactures
apparel suited to the tastes and preferences of the Indian customers. Identify the type of foreign
market-entry approach depicted in this scenario.
A) a franchising agreement
B) a consortium
C) a licensing agreement
D) direct exporting
E) indirect exporting
84) Companies that have the ________ organizational structure generally experience rapid
growth and have broad, diverse product lines.
A) global product division
B) pyramid
C) hierarchical
D) geographical division
E) matrix organization
85) HealthStore Inc. provides a broad and diverse range of services for the healthcare industry. It
also manufactures a variety of hospital equipment. It wants to experience rapid growth and
intends to have an organizational structure to better face international competition. What
organizational structure will suit HealthStore best?
A) a global product division structure
B) a geographical division structure
C) a matrix structure
D) a pyramid structure
E) a hierarchical structure
86) Which organizational structure is the most extensive of those commonly adopted by
companies seeking to compete globally?
A) transnational structure
B) geographical division structure
C) region-specific structure
D) global product division structure
E) matrix structure
87) Describe three benefits of marketing to diverse customers with global marketing operations.
88) Compare and contrast corporate, strategic, and tactical planning.
89) Describe the four phases of the international planning process.
90) A company has a choice of four different modes of foreign market entry. Briefly describe
each of these modes, and explain when each would be the best option.
91) Describe the two basic contractual agreements that most companies follow in their attempt to
enter a foreign market: licensing and franchising. Illustrate a situation in which each type of
agreement would be appropriate. Students’ answers will vary.
92) Briefly explain a strategic international alliance (SIA).
93) Explain the difference between joint ventures and consortia.
94) You have just been hired as a consultant by Physical Mobility to advise the company on how
to enter the European market. You have decided that direct foreign investment would be the best
mode for Physical Mobility to follow. Write a one-paragraph memo that outlines the benefits of
direct foreign investment in this scenario.
95) Assume that you are a consultant for a telecom giant based in the United States that wishes to
create a joint venture with a Chinese electronics company. The joint venture is expected to enter
and compete in the eastern European market. Suggest an organizational structure that would be
most suitable for this joint venture. Also, comment on why the structure might be a good one to
use.
96) An infinite number of organizational patterns for the headquarters’ activities of multinational
firms exist, but most fit into one of three categories. Describe these categories and the
advantages and disadvantages of each.