Question

1. Within a trading bloc, the group that is most likely to be negatively affected by the elimination of trade barriers is:
   1. Consumers in member countries
   2. Large firms in non-member countries
   3. Large firms in member countries
   4. Less competitive firms in member countries
   5. Consumers in non-member countries
2. Which of the following arrangements for entering foreign markets makes the most sense for a company pursuing a pure global strategy?
   1. Licensing
   2. Establish operations in areas with location economies, and export from there
   3. Entering into a joint venture with other global competitors
   4. Exporting from the home market
   5. Setting up an autonomous wholly owned subsidiary in each country where the firm does business

Answer 1

Within a trading bloc, the group that is most likely to be negatively affected by the elimination of trade barriers is:

Answer: d) Less competitive firms in member countries

After elimination of trade barriers the less competitive firm in member countries have to compete with the large and efficient (low cost) firms of other member countries

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Which of the following arrangements for entering foreign markets makes the most sense for a company pursuing a pure global strategy?

Answer: e) Setting up an autonomous wholly owned subsidiary in each country where the firm does business

For a pure global strategy the firm needs to have its presence in the markets where it is serving