Question

3. Fewer than 1% of all US firms trade outside of the country, and about 60%...

3. Fewer than 1% of all US firms trade outside of the country, and about 60% of those that do so, only trade with one other country. What are some potential reasons for this (all of the following are true, except one):

a. Lack of knowledge, data, and experience.

b. Most companies in the US are small and medium sized.

c. The size of the US consumer market is large, thus companies may be happy to operated domestically only.

d. The paperwork and administrative requirements are very challenging.

e.Exports from the US have been slowing in general

11,The idea of the core competency of the corporation is fundamental to identifying ways to compete profitably for any corporation. A well-defined core competency allows a company to do all of the following, except:

a. Decrease costs of creating value

b. Increase its ability to charge higher prices

c. Create a competitive advantage for the firm

d. Increase the likelihood of successfully-lobbying governments internationally

12. The two basic ways to increase the profitability of the firm are:

A. reduce value and raise prices, or keep costs the same

B. increase value added per product and try to raise prices or reduce costs

C. sell more products in the existing markets, or reduce costs

D. enter new foreign markets or cut costs in existing foreign markets

13. In the class example of Marvel, why is licensing the preferred way to expand the company’s business abroad?

A. it offers Marvel a chance to profit from its intellectual property

B. It allows Marvel to enter foreign markets by acquiring foreign competitors easily

C. It allows more tax breaks than joint ventures

D. It helps establish more control over the marketing of its products compared to joint venturing

E. It protects Marvel’s intellectual property better than a wholly owned subsidiary would

14. All of the following are some of the main causes for companies to fail at exporting, except:

A. Poor foreign market analysis executed

B. No customization of products to foreign demands and tastes

C. Not having a properly implemented marketing campaign

D. Failing to understand competition in the foreign market

E. Absence of a dedicated export director inside the firm

17. Some of the best practices in terms of how to do foreign market entry, include all of the following, except:

A. Initially, focus on one/at most two/ markets

B. Enter on a relatively small scale

C. Build strong relationships with local partners and hire local personnel

D. Go big or go home – ensure a foreign market entry is as large as possible in terms of commitment of resources, in order to capture first mover advantages

E. Proactively search for export opportunities

18. Why do acquisitions, as a foreign market entry mode often fail? Please chose one reason.

A. There is a clash between the cultures of the acquiring and acquired firm.

B. Acquisitions take a long time to execute compared to greenfield investments.

C. Acquisitions are easily preempted by making greenfield investments.

D. The revenue and profit stream generated by an acquisition are well known in advance.

E. Losses produced by intangible assets outweigh profits from acquired tangible assets.

19. Which of the following is an advantage of joint ventures as a mode of entry into foreign markets? (Think of the Tesco model of foreign entry, presented in class).

The foreign firm benefits from a local partner's knowledge of the host country.

The foreign firm can protect its technology from being appropriated by its local partner.

There is less cause for friction and conflict between the foreign and local partners.

It gives a firm tight control over subsidiaries, which enables it to realize experience curve or location economies.

The foreign firm does not have to bear any development costs and risks associated with opening a foreign market.

20. Ryanair is most likely following which type of strategy?

International strategy

Global standardization strategy

Transnational strategy

Localization strategy

Anything goes strategy

28. Using the example of Ryanair from class, where would you place the company in terms of their strategic choice positioning, using the Efficiency Frontier:

Low Cost, High Value/Differentiation

Low Cost, Low Value/Differentiation

High Cost, High Value/Differentiation

High Cost, Low Value/Differentiation

32. In assessing which foreign markets to enter, companies would like to be able to make long-term plans. Which of the following countries (we have discussed in class) would represent potentially a less-desirable foreign market to enter, given the current geo-political and economic situation in the country/region?

South Korea

Turkey

Germany

Japan

Romania

34. In the Starbucks coffee video presentation featuring Howard Schultz, all of the following were important takeaways, except:

Starbucks is trying to expand its product offerings beyond its own retail stores (e.g. through other retailers, etc.)

Starbucks attempts to keep a relatively uniform international strategy, first "testing the water" and being very cautious and strategic about which markets to enter.

Starbucks is following a globalization strategy that relies on entering new country markets quick, by opening in most cities at the same time.

The company has rollout teams across all its markets in order to plan the entry strategy.

35. It is likely that as companies become more experienced abroad, they’d switch between different strategies; what is one of the most common patterns of moving from one strategy to another?

Moving from a transnational strategy to a localization one

Moving from international strategy to localization strategy

Moving from an international strategy to a global standardization strategy

Moving from a global standardization strategy to a localization strategy

Moving from an international strategy to a haphazard strategy

Homework Answers

Answer #1

11.

D

The core competency helps to create competitive advantage in the market. It is not used to lobby in the political system.

12.

B

To increase the profitability, the one way is to reduce the cost and another way is to add value then raise the price. It will help the consumers to pay more if value on offer is high. So, profitability level is raised.

13.

A

It creates a scope to earn from the IP rights already owned by the company Marvel.

14.

E

Presence of the dedicated director can help in smooth execution of the exports. But, only a director does not affect the success or failure of the export. Other mentioned factors are more important.

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