Question 1

Many American firms that sold oil-refining technology to firms in the Gulf now find themselves competing with these firms in the world oil market. This is an example of:

Accepted Answer

A)   a firm entering into a turnkey project with a foreign enterprise, inadvertently creating a competitor.
B)   a firm entering into a turnkey deal having no long-term interest in the foreign country.
C)   a country subsequently proving to be a major market for the output of the process that has been exported.
D)   a firm selling its process technology through franchisees in different countries.

Question 2

Explain the relationship between first-mover disadvantages and pioneering costs.

Accepted Answer

When a firm enters a market prior to oth...

Question 3

To maximize the learning benefits of an alliance, a firm must try to learn from its partner and then apply the knowledge within its own organization.

Accepted Answer

A) True 
 B)False

Question 4

If a firm is trying to enter a market where there are already well-established companies, and where global competitors are also interested in establishing a presence, the firm should choose a(n)  _____.

Accepted Answer

A)   franchise
B)   greenfield investment
C)   joint venture
D)   acquisition

Question 5

Discuss the three primary characteristics of a good ally.

Accepted Answer

A good ally, or partner, has three chara...

Question 6

What are first-mover advantages? Discuss these advantages.

Accepted Answer

First-mover advantages are the advantage...

Question 7

How can a firm protect its proprietary information in a joint venture arrangement?

Accepted Answer

A)   By sharing only the technology that is central to the core competence of the firm.
B)   Hold majority ownership in the venture so that the firm has greater control over the technology.
C)   By sharing only the technology of the firm, not the patents and copyrighted information.
D)   Hold minority ownership in the venture so that the firm does not have to give over control of the technology.

Question 8

Large strategic commitments:

Accepted Answer

A)   have many benefits and little to no risks.
B)   increase strategic flexibility.
C)   have many risks and little to no benefits.
D)   limit strategic flexibility.

Question 9

Which of the following is a first-mover advantage?

Accepted Answer

A)   Lower research and development costs and marketing costs than other firms
B)   Ability to preempt rivals and capture demand by establishing a strong brand name
C)   Ability to capitalize on the work done by other firms
D)   Creation of innovative products at lower costs than other firms

Question 10

Explain the idea of a turnkey project. Why should a firm use this arrangement to expand internationally? In what industries are turnkey arrangements most common?

Accepted Answer

In a turnkey project, the contractor agr...

Question 11

_____ can be used to formalize arrangements to swap skills and technology in a strategic alliance.

Accepted Answer

A)   Modularization
B)   Cross-licensing agreements
C)   Structured transfer agreements
D)   Contractual safeguards

Question 12

There are several disadvantages of franchising as an entry mode. Which of the following is one of them?

Accepted Answer

A)   There is little incentive for the franchisee to build a profitable operation as quickly as possible.
B)   The firm incurs many of the costs and risks of opening a foreign market on its own.
C)   Franchising may inhibit the firm's ability to use the profits obtained to open additional businesses in the same country.
D)   Franchising may inhibit the firm's ability to take profits out of one country to support competitive attacks in another.

Question 13

A(n)  _____ is a way to bring together complementary skills and assets that neither company could easily develop on its own.

Accepted Answer

A)   alliance
B)   turnkey contract
C)   wholly owned subsidiary
D)   licensing agreement

Question 14

In a(n)  _____, the contractor agrees to handle every detail of the project for a foreign client.

Accepted Answer

A)   joint venture
B)   exporting agreement
C)   turnkey project
D)   licensing agreement

Question 15

An advantage of _____ with a local partner is the knowledge of the local environment that the local partner contributes to the venture.

Accepted Answer

A)   turnkey contracts
B)   licensing contracts
C)   joint ventures
D)   wholly owned subsidiary contracts

Question 16

The costs of promoting and establishing a product offering when a firm enters a foreign market prior to its rivals are known as _____.

Accepted Answer

A)   switching costs
B)   market development costs
C)   pioneering costs
D)   promotional development costs

Question 17

If a firm can realize location economies by moving production elsewhere, it should avoid _____.

Accepted Answer

A)   exporting
B)   turnkey contracts
C)   licensing
D)   wholly owned subsidiaries

Question 18

Licensing limits the firm's ability to realize experience curve and location economies by producing its product in a centralized location.

Accepted Answer

A) True 
 B)False

Question 19

The main advantage of _____ is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants.

Accepted Answer

A)   an acquisition
B)   strategic alliances
C)   greenfield investment
D)   franchising

Question 20

The choice of which markets to enter should be driven by an assessment of relative long-run growth and profit potential.

Accepted Answer

A) True 
 B)False

Exam 15: Entry Strategy and Strategic Alliances

Discuss the three primary characteristics of a good ally.

Correct AnswerverifiedA good ally, or partner, has three chara...View AnswerShow Answer

What are first-mover advantages? Discuss these advantages.

Correct AnswerverifiedFirst-mover advantages are the advantage...View AnswerShow Answer

How can a firm protect its proprietary information in a joint venture arrangement?

Correct AnswerverifiedShow Answer

The choice of which markets to enter should be driven by an assessment of relative long-run growth and profit potential.

Correct AnswerverifiedShow Answer

The costs of promoting and establishing a product offering when a firm enters a foreign market prior to its rivals are known as _____.

Correct AnswerverifiedShow Answer

Many American firms that sold oil-refining technology to firms in the Gulf now find themselves competing with these firms in the world oil market. This is an example of:

Correct AnswerverifiedShow Answer

In a(n) _____, the contractor agrees to handle every detail of the project for a foreign client.

Correct AnswerverifiedShow Answer

Explain the idea of a turnkey project. Why should a firm use this arrangement to expand internationally? In what industries are turnkey arrangements most common?

Correct AnswerverifiedIn a turnkey project, the contractor agr...View AnswerShow Answer

Which of the following is a first-mover advantage?

Correct AnswerverifiedShow Answer

_____ can be used to formalize arrangements to swap skills and technology in a strategic alliance.

Correct AnswerverifiedShow Answer

Large strategic commitments:

Correct AnswerverifiedShow Answer

If a firm can realize location economies by moving production elsewhere, it should avoid _____.

Correct AnswerverifiedShow Answer

There are several disadvantages of franchising as an entry mode. Which of the following is one of them?

Correct AnswerverifiedShow Answer

Licensing limits the firm's ability to realize experience curve and location economies by producing its product in a centralized location.

Correct AnswerverifiedShow Answer

If a firm is trying to enter a market where there are already well-established companies, and where global competitors are also interested in establishing a presence, the firm should choose a(n) _____.

Correct AnswerverifiedShow Answer

The main advantage of _____ is that it gives the firm a much greater ability to build the kind of subsidiary company that it wants.

Correct AnswerverifiedShow Answer

A(n) _____ is a way to bring together complementary skills and assets that neither company could easily develop on its own.

Correct AnswerverifiedShow Answer

To maximize the learning benefits of an alliance, a firm must try to learn from its partner and then apply the knowledge within its own organization.

Correct AnswerverifiedShow Answer

An advantage of _____ with a local partner is the knowledge of the local environment that the local partner contributes to the venture.

Correct AnswerverifiedShow Answer

Explain the relationship between first-mover disadvantages and pioneering costs.

Correct AnswerverifiedWhen a firm enters a market prior to oth...View AnswerShow Answer

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A good ally, or partner, has three chara...
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First-mover advantages are the advantage...
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In a turnkey project, the contractor agr...
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When a firm enters a market prior to oth...
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