Which step of the market-screening process involves determining the income elasticity
of the Zulu doll?
A) selection of the market
B) assessment of the national business environment
C) identification of the basic appeal for markets
D) measurement of market potential
________ refers to management of the physical flow of products from the point of
origin as raw materials to end users as finished products.
A) Operations research
B) Logistics
C) Warehousing
D) Environmental scanning
Foreign bonds issued and traded in Asia outside Japan and normally denominated in
dollars are called ________.
A) bulldog bonds
B) yankee bonds
C) samurai bonds
D) dragon bonds
According to value-chain analysis, inbound and outbound logistics are considered as
________.
A) tertiary activities
B) primary activities
C) support activities
D) core competencies
The purchase of physical assets or a significant amount of ownership of a company in
another country to gain a measure of management control is called ________.
A) portfolio investment
B) foreign direct investment
C) horizontal integration
D) vertical integration
Scenario: Cleanshot USA in Russia
When Cleanshot USA, a photography products company, decided to enter the
international arena, it chose Russia as its main market. Although Russia has been in
transition for years, Cleanshot managers believe their company has tremendous
opportunities there.
Russia is in transition from ________.
A) a capitalist economy to a mixed economy
B) a centrally planned economy to a free-market economy
C) a market economy to a centrally planned economy
D) a mixed economy to a centrally planned economy
Expropriation is best defined as the ________.
A) transference of ownership of resources from private to public sector with no
compensation
B) transference of ownership from private to public sector with compensation to private
owners for their losses
C) conversion of state-owned property to privately owned property
D) conversion of state-owned property to privately owned property with no
compensation
The key element of political risk of greatest concern for global companies is ________.
A) the cost of transporting materials and goods
B) unforeseen political change
C) currency and liquidity problems
D) letting past political events blind future opportunities
Which of the following is a strategic factor that influences a company’s international
entry mode selection?
A) market consumption capacity
B) market receptivity
C) market size
D) market intensity
Which of the following circumstances would best require a pull strategy to be
implemented for product promotion?
A) channel members wield relatively lesser power compared to that of producers
B) buyers display a great deal of brand loyalty to a particular product
C) distribution channels are short
D) buyers need to be informed about the features of a product before purchase
Which of the following should most likely be considered in making the decision to
outsource some of Echo’s manufacturing activities?
A) Do purchasing components present the lowest cost option for Echo?
B) Would Echo engineers be willing to relocate to a foreign nation?
C) Is Echo prepared to cover moving expenses for its managerial talent?
D) Can Echo find employees for a customer service center in the U.S.?
Scenario: Moonland Union
Twenty-six nations of Moonland region, have decided to cooperate with one another to
eliminate trade barriers among them and create the Moonland Union. They are not sure,
however, to what extent they want to cooperate.
Some countries in Moonland Union are interested not just in free trade among
themselves and a common trade policy against nonmembers, but also in removing all
barriers to the movement of labor and capital among themselves. This type of
integration is best described as a ________.
A) free trade area
B) preferential trading area
C) customs union
D) common market
Economic integration whereby countries remove all barriers to trade among themselves,
but each country determines its own barriers against nonmembers, is called a(n)
________.
A) economic union
B) customs union
C) common market
D) free trade area
When a company exports a product at a price that is lower than the price normally
charged in its domestic market or lower than the cost of production, it is said to be
________.
A) dumping
B) ringfencing
C) hoarding
D) cost-shifting
Scenario: Stephanie Wong
Stephanie Wong, a Chinese-American, owns a consultancy that advises clients on
strategies for business expansions into China. Wong is to lead a symposium for small
and mid-sized exporters who are planning on expanding their businesses in China.
Therefore, she is preparing answers in advance for questions that symposium
participants would most likely ask. Trademark protection typically lasts indefinitely,
provided the word or symbol continues to be distinctive.
The extension of a company’s activities into stages of production that absorb the
company’s outputs is known as ________.
A) forward integration
B) backward integration
C) an internalization advantage
D) an ownership advantage
A major drawback of the staffing policy recommended by Valerie is ________.
A) the potential for losing control of the host-country operations
B) the necessity of depending on managers who don’t know the local culture
C) the potential for creating legal barriers to host-country operations
D) the high cost of training managers in the language of the host country
Scenario: Frankfurter Friday
Betty Cleveland is the vice president of Frankfurter Friday, a highly successful hot dog
joint in Oceania. Her company decides to expand to Asia and identifies China as the
ideal market. Before she leaves for China, she studies their culture extensively and
discovers that the number four is considered extremely unlucky, that not everybody is
fluent in China’s official language-Mandarin-and that punctuality is a highly valued trait
in the country.
The sale of Hollywood movies in Konesia has doubled in the last five years while those
of locally-produced movies has fallen. In addition to this, sociologists have noted that
currently, the teenagers of Konesia are less inclined to don their traditional costumes,
preferring to adopt Western clothes instead. These changing trends illustrate ________.
A) cultural imperialism
B) cultural universal
C) cultural retention
D) cultural elitism
Scenario: Trader’s Paradise
Trader’s Paradise is a global merchant that sells a variety of products. The company
operates in forty-eight different countries (some developed, some developing) and some
former communist countries. The company faces substantial risks given the differing
conditions in foreign exchange markets.
To insure against potential losses that result from adverse changes in exchange rates,
Trader’s Paradise should use currency ________.
A) swap
B) speculation
C) hedging
D) arbitrage
A business that has direct investments (in the form of marketing or manufacturing
subsidiaries) abroad in several countries is called a ________.
A) dummy corporation
B) shell corporation
C) multinational corporation
D) domestic corporation