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91. Which government organization is an excellent source information about analyzing markets, financing and planning
strategy?
a. TradePort
b. Small Business Administration
c. Export Assistance Center
d. Department of Commerce
Match the term with its definition. Some terms may not be used.
a. Economic risk
b. Experience curve efficiencies
c. Foreign licensing
d. International franchising
e. International outsourcing
f. International strategic alliance
g. Learning effects
h. Licensee
i. Licensor
92. A strategy that involves accessing foreign labor through contracts with independent providers
93. Per-unit savings gained from repeated production of the same product
94. Insights gained from experience that lead to improved work performance
95. The company selling licensing rights
96. Selling a standard package of products, systems, and management services to a company in another country
97. The company buying licensing rights
98. Allowing a company in another country to purchase the rights to manufacture and sell a company’s products in
international markets
99. A combination of efforts and/or assets of companies in different countries for the sake of pooling resources and
sharing risks
Match the term with its definition. Some terms may not be used.
a. Bill of lading
b. Born-global firms
c. Counterfeit activity
d. Economic risk
e. Economies of scale
f. Exchange rate
g. Letter of credit
h. Offshoring
i. Political risk
j. Royalties
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100. The unauthorized use of a company’s intellectual property or manufacture of its products
101. Efficiencies that result from expansion of production
102. A document indicating that a product has been shipped and the title to that product has been transferred
103. An agreement issued by a bank to honor a draft or other demand for payment when specified conditions are met
104. Small companies launched with cross-border business activities in mind
105. Fees paid by the licensee to the licensor for each unit produced under a licensing contract
106. The probability that a country’s government will mismanage its economy in ways that hinder the performance of
firms operating there
107. The potential for political forces in a country to negatively affect the performance of businesses operating within its
borders
108. The value of one country’s currency relative to that of another country
Match the term with its definition. Some terms may not be used.
a. Born-global firms
b. Cross-border acquisition
c. Exporting
d. Globalization
e. Greenfield venture
f. Importing
g. Offshoring
h. Trade intermediary
i. Trade mission
109. A wholly owned subsidiary formed from scratch in another country
110. An agency that distributes a company’s products on a contract basis to customers in another country
111. The purchase by a business in one country of a company located in another country
112. A trip organized to help small business owners meet withpotential foreigh buyers and establish strategic alliances in
an international market
113. A strategy that involved relocating operations abroad
114. Selling products produced inthe home country to customers in another country
115. Selling products produced in another country to buyers in the home country
116. The expansion of international business
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117. Describe the role trade intermediaries play in assisting small businesses that choose to go global. Identify the types of
trade intermediaries that are most useful to small businesses.
118. Dustin had contracts for web designs in Japan and France and therefore has decided to start a business. The company
will be reaching an international market strictly through online operations. Based on this type of global business, what
organizations could offer advice to make this business feasible?
119. What options do small businesses have when dealing with political risks globally?
120. After identifying each of the four driving forces that encourage entrepreneurs to go global, discuss the change in
traditional to emerging perspectives.
121. Polly has formed an agreement with a French company to produce and sell her scarves in their ten stores across
Europe. The scarves are Polly’s original designs and are of different colors and fabrics. They will then pay Polly a fee for
each scarf they produce. What are the advantages and disadvantages of the globalization strategy Polly will be utilizing?
122. Nicole is the CEO of a small business which is looking to expand globally. She wants to move her business to a
European country and feels that is where the product will be most profitable. What are three challenges that Nicole needs
to analyze for the area in which she is considering expanding her company?
123. Describe six strategies that a small firm can use to go global.
124. What are the differences and similarities of exporting and importing?
125. A group of four Kentucky business owners all in business in the international equine industry fly to Ireland to meet
potential buyers. Describe what this group would be hoping to accomplish from the trip.
126. What are question topics that should be considered before going global specifically related to management
objectives, management experience and resources, production capacity and financial capacity?
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Answer Key
1. False
2. False
3. False
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52. c
53. d
54. b
55. b
56. a
57. a
58. b
59. a
60. b
61. d
62. b
63. d
64. a
65. b
66. b
67. d
68. d
69. d
70. a
71. c
72. b
73. b
74. c
75. b
76. c
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103. g
104. b
105. j
106. d
107. i
108. f
109. e
110. h
111. b
112. i
113. g
114. c
115. f
116. d
117. Perhaps the easiest way to break into international markets is to use a trade intermediary, which is an agency that can
distribute your product to international customers on a contract basis. These agencies can tap their established web of
contacts as well as their local cultural and market expertise to distribute your product to local buyers. The intermediary
can manage the entire export end of the business, taking care of everything except filling the orders.
The following types of trade intermediaries are most likely to provide the services small businesses will require when they
go global:
∙ Export management companies
∙ Export trading companies
∙ Export agents, merchants, or remarketers
∙ Piggyback marketers
118. The business is a born-global firm since the company is being launched with cross-border activities as the primary
purpose. Even with the recent slowdown, companies such as these are growing. Dustin should contact the Small Business
Administration’s U.S Export Assistance Center for questions related to forms, trade laws, and payment issues. Since he is
starting an international web design company, he should understand the importance of a robust, multilingual Internet
presence to locate customers. But sites such as BuyUSA.com, USTDA.gov, and Gala-Global.org might provide
information to increase the company’s feasibility.
119. Political risks can range from new regulations restricting the content of advertising to a government takeover of
private assets. Political risk can threaten access to an export market, require transfer of closely held technologies, or
determine the local content of manufactured goods. While many large corporations maintain risk assessment offices
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