Question 1

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

Accepted Answer

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

Question 2

Tangible property includes patents, designs, copyrights, and trademarks.

Accepted Answer

A) True 
 B)False

Question 3

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 4

Large-scale strategic commitments may

Accepted Answer

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

Question 5

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

Accepted Answer

When a firm enters a market before other...

Question 6

A good ally will expropriate the firm's technological know-how while giving away little in return.

Accepted Answer

A) True 
 B)False

Question 7

________ allow a firm to rapidly build its presence in the target foreign market.

Accepted Answer

A)   Joint ventures
B)   Acquisitions
C)   Subsidiaries
D)   Turnkey contracts

Question 8

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

Accepted Answer

A)   Share 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)   Share 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 9

________ agreements enable firms to hold each other "hostage," thereby reducing the risk they will behave in an opportunistic manner toward each other.

Accepted Answer

A)   Turnkey
B)   Franchising
C)   Cross-license
D)   Integrated license

Question 10

Costs that an early entrant has to bear that a later entrant can avoid are known as

Accepted Answer

A)   first-mover costs.
B)   late-mover disadvantages.
C)   pioneering costs.
D)   licensing fees.

Question 11

The most typical joint venture is a ________ venture.

Accepted Answer

A)   50-50
B)   60-40
C)   75-25
D)   10-90

Question 12

An arrangement whereby a firm grants the right of intangible property to another entity for a specified time period in exchange for royalties is ________ agreement.

Accepted Answer

A)   a turnkey
B)   a licensing
C)   a greenfield
D)   an acquisition

Question 13

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 14

The greater the pressures for cost reductions, the more likely a firm will want to pursue some combination of exporting and wholly owned subsidiaries.

Accepted Answer

A) True 
 B)False

Question 15

Discuss the three advantages of acquiring an enterprise in a target market.

Accepted Answer

Acquisitions have three major points in ...

Question 16

What are first-mover advantages? Discuss these advantages.

Accepted Answer

First-mover advantages are the advantage...

Question 17

Contractual safeguards cannot be written into an alliance agreement to guard against the risk of opportunism by a partner.

Accepted Answer

A) True 
 B)False

Question 18

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 19

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 20

Apple exports its products to many countries. An advantage of exporting products to another country is that it

Accepted Answer

A)   minimizes exchange rate risks.
B)   provides the ability to achieve experience curve and location economies.
C)   faces less trade barriers.
D)   gives firms access to local knowledge.

Exam 15: Entry Strategy and Strategic Alliances

The greater the pressures for cost reductions, the more likely a firm will want to pursue some combination of exporting and wholly owned subsidiaries.

Correct AnswerverifiedShow Answer

What are first-mover advantages? Discuss these advantages.

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

Discuss the three advantages of acquiring an enterprise in a target market.

Correct AnswerverifiedAcquisitions have three major points in ...View AnswerShow Answer

Tangible property includes patents, designs, copyrights, and trademarks.

Correct AnswerverifiedShow Answer

A good ally will expropriate the firm's technological know-how while giving away little in return.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The most typical joint venture is a ________ venture.

Correct AnswerverifiedShow Answer

________ allow a firm to rapidly build its presence in the target foreign market.

Correct AnswerverifiedShow Answer

Which of the following is a first-mover advantage?

Correct AnswerverifiedShow Answer

An arrangement whereby a firm grants the right of intangible property to another entity for a specified time period in exchange for royalties is ________ agreement.

Correct AnswerverifiedShow Answer

Apple exports its products to many countries. An advantage of exporting products to another country is that it

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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 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

Contractual safeguards cannot be written into an alliance agreement to guard against the risk of opportunism by a partner.

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 ________ costs.

Correct AnswerverifiedShow Answer

Large-scale strategic commitments may

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedWhen a firm enters a market before other...View AnswerShow Answer

________ agreements enable firms to hold each other "hostage," thereby reducing the risk they will behave in an opportunistic manner toward each other.

Correct AnswerverifiedShow Answer

Costs that an early entrant has to bear that a later entrant can avoid are known as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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First-mover advantages are the advantage...
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Acquisitions have three major points in ...
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In a turnkey project, the contractor agr...
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When a firm enters a market before other...
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