Currency devaluation increases consumers’ buying power.
Product differentiation is more likely when nations share the same level of economic
development.
The brand name or trademark of a company is normally the single most important item
desired by a franchisee.
Scenario: Happyland
Happyland is a country characterized by beautiful beaches, vast natural resources, and a
highly skilled labor force. Happyland is now encouraging foreign direct investment
flows. The country has been exporting textiles, computer hardware, and software
programs. The net result of the trade is that Happyland exports far more goods and
services and receives more income from abroad than it imports and pays abroad.
Performance demands made by host countries to restrict incoming FDI apply
exclusively to businesses in cultural industries.
Scenario: Excelsior’s Limited
Excelsior’s Limited, a manufacturer of health and beauty aids, is expanding its presence
in several countries around the world. Excelsior’s president is surprised at some of the
responses the company is receiving from other countries.
Tariffs tend to exact a cost on countries as a whole because they lessen citizens’ gains
from trade.
In marketing, distribution is the process of sending promotional messages about
products to target markets.
Scenario: Susan Goes Global with Grape Fizz
Susan is the CEO of Grape Fizz, a global drinks-manufacturing company. She wishes to
set up production facilities in other countries and has been advised to assess the
political system of each country before she does so.
In a coalition government, the strongest political parties share power by dividing
government responsibilities among themselves.
Scenario: Happyland
Happyland is a country characterized by beautiful beaches, vast natural resources, and a
highly skilled labor force. Happyland is now encouraging foreign direct investment
flows. The country has been exporting textiles, computer hardware, and software
programs. The net result of the trade is that Happyland exports far more goods and
services and receives more income from abroad than it imports and pays abroad.
Ownership restrictions is a method used by host countries to restrict incoming foreign
direct investment.
Cultures that score low on uncertainty avoidance tend to be less open to change and
new ideas.
Focus group interviews tend to work best when moderators are natives of the countries
where the interviews are held.
Gross national product (GNP) is the value of all goods and services imported into a
country over a one-year period.
The immediate cause of country risk is a legal or political factor.
The free-market price that unrelated parties charge one another for a specific product is
called a(n) ________.
A) worldwide price
B) transfer price
C) dual price
D) arm’s length price
________ is the instantaneous purchase and sale of a currency in different markets for
profit.
A) Currency hedging
B) Currency arbitrage
C) Currency speculation
D) Currency conversion
Which of the following is an example of a trademark infringement?
A) manufacturers who sell different versions of their own products in different
countries
B) manufacturers who sell counterfeit products under the names and logos of more
famous brands
C) a company which exports factory rejects to developing countries
D) a company which sells products at half the price of their competitors
Which of the following is among the most commonly counterfeited products?
A) aircraft parts
B) watches
C) surgical equipment
D) medicines
A(n) ________ becomes a negotiable instrument that can be traded among financial
institutions when inscribed “accepted” by an importer.
A) sight draft
B) ocean bill of lading
C) time draft
D) inland bill of lading
Most companies today operate in an environment of increased transparency and
scrutiny regarding their business activities. This is due to ________.
A) the rise of the social media
B) the prosperity of developing nations
C) the heterogeneity in markets
D) labor market flexibility in developing nations
Which of the following will most likely force international companies to cancel
proposed investments?
A) low rates of inflation
B) increasing budget deficits
C) rising productivity levels
D) an appreciating currency
Scenario: Wilson Industries Inc.
Wilson Industries Inc. is a multinational firm that designs and produces premium
leather bags for major destinations worldwide. The company’s board of directors is
meeting to discuss changes that might be needed in the company’s operations.
The board plans to examine Wilson’s ability to produce enough bags to satisfy their
customers’ demands. This evaluation is known as ________.
A) capacity planning
B) process planning
C) lean production
D) product structure modeling
Deciding the spatial arrangement of production processes within production units is
called ________.
A) facilities layout planning
B) capacity planning
C) process planning
D) location economies
Small and medium-sized companies often find trade missions very appealing because
________.
A) it gives companies an opportunity to visit new places
B) such trips are usually cheap even for the smallest of businesses
C) it provides access to important business officials and executives
D) it helps companies analyze the strategies of all major competitors
Sam’s mentor at the firm told him that the ________ stipulates that an identical product
must have an identical price in all countries when the price is expressed in a common
currency.
A) exchange price
B) law of one price
C) fixed exchange-rate system
D) floating exchange-rate system
Why do governments impose currency restrictions and how can companies get around
such restrictions?
Describe some of the cultural challenges of doing business with countries of Central
and Eastern Europe. How do these challenges compare with the challenges of doing
business with ASEAN countries?
Explain why job protection is a political motive for governments to restrict free trade.
Why might a government interested in job protection insist on local content
requirements for international firms doing business in that country?
Briefly describe the strategy formulation process of international organizations.
Compare and contrast the world’s three main political ideologies: anarchism,
totalitarianism, and pluralism.