(F) Chapter 4: Ways of Going International

Question 1

Ways of going international:

Buying and Shipping foreign-produced goods for domestic consumption

Answer 1

Importing

Question 2

What ways of going international are the examples given below?

–> U.S. imports an increasing amount of goods

–> Attending trade shows and fairs
where firms from different countries gather to display products and services

–> Monitor trade publications

Answer 2

Importing

Question 3

Fill in the blank:

Exporting increases ______ potential?

Answer 3

Exporting increases MARKET potential (you access new markets)

Question 3

Ways of going international:

The shipping of domestically produced good to a foreign destination for consumption

Answer 3

Exporting

Question 4

Fill in the blank:
Firms eventually become _______ in the ________ due to expanded market which translates to________

Answer 4

Firms eventually become EFFICIENT in the PRODUCTION due to expanded market which translates to LOWER costs

Question 4

In exporting, when there is efficiency in production due to expanded market, what does it translate to?

Answer 4

translates to LOWER COST

Question 5

How many years for firms/businesses to become profitable in exportation?

Answer 5

3-5 years

Question 6

T or F:

It is quick and easy to learn from intricacies and efficiencies of international business

Answer 6

F (IT WILL TAKE TIME to learn from intricacies and efficiencies of international business)

Question 7

What ways of going international are the examples given below?

–> Firm actively participate in the international arena as a seller

Answer 7

Exporting

Question 8

Ways of going international:

More traditional self-standing legal entity; This is when 2 or more companies collab to work on a specific project or venture

Answer 8

Joint Venture

Question 9

T or F:

For some countries, it is uncommon for a company to joint venture with the state/state-owned firm

Answer 9

F (For some countries, it is NOT UNCOMMON for a company to joint venture with the state/state-owned firm)

Question 10

What are the 4 advantages of Joint Venture?

(GSCS)

Answer 10

1. GAINING INTIMATE KNOWLEDGE of local conditions and government where facility is located
2. SHARING RESOURCES means compensating for weaknesses of each firm
3. CAPITAL OUTLAY (funding) AND RISK is shared
4. STRATEGIC FIT of a domestic firm with a foreign firm

Question 11

What are the 3 disadvantages of Joint Venture?

(FIC)

Answer 11

1. The problem of FRAGMENTED control
2. CLASH of corporate cultures and management styles
3. INCONSISTENT tactical execution due to unclear roles can lead to mismanagement of resources

Question 12

Ways of going international:

Domestically-controlled foreign production facility

Answer 12

Direct Foreign Investments

Question 13

Direct Foreign Investments typically involve what percentage of ownership of the voting stock in a foreign enterprise?

Answer 13

10-25%

Question 14

What ways of going international are the examples given below?

–> BPO (financial services) in India and Philippines

–> Factories of tech companies in India or China

–> Acquiring interest in an ongoing foreign operation

–> Obtaining majority interest in a foreign company (company becomes a subsidiary of the acquiring firm)

–> Purchase part of the assets of a foreign concern in order to establish direct investments

Answer 14

Direct Foreign Investments (pa-familiarize ng examples thnx)

Question 15

a business arrangement where a business (licenser) provides patents, trademarks, manufacturing expertise, or technical services to a foreign business (licensee)

Answer 15

Licensing

Question 16

Ways of going international:

The manufacturer of a product (or a firm with proprietary rights over a certain technology or trademarks) grants permission to some group or individual to manufacture that product in return for specified royalties or other payments

Answer 16

Licensing

Question 17

T or F:

The licensee (licensee: purchases the license; not the entrepreneur licenser) will be responsible for the capital outlay, daily production, marketing, technical or management requirements

Answer 17

T

Question 18

T or F:

Direct foreign investments provide more viable option for those with limited financial resources or those with unique or proprietary products or processes

Answer 18

F (LICENSING)

Question 19

T or F:

Domestic firm merely looks to their own domestic firm for expertise and additional opportunity to sell a product owned by licenser

Answer 19

F (FOREIGN FIRM merely looks to domestic firm for expertise and additional opportunity to sell a product owned by licenser)

Question 20

What ways of going international are the examples given below?

Patents, Trademarks, Technical know-how

Answer 20

Licensing

Question 21

Ways of going international: Licensing

Entrepreneurs should file for patent in countries where business will be transacted

Answer 21

Patents

Question 22

Ways of going international: Licensing

Difficulty in direct translations prompt entrepreneurs to have licensed for the same product

Answer 22

Trademarks

Question 23

Ways of going international: Licensing

Hard to enforce since it depends on the security of secrecy agreements

Answer 23

Technical know-how

Question 24

What are the 5 Ways of Going International?

Answer 24

1. Importing
2. Exporting
3. International Cooperative Alliance and Joint Ventures
4. Direct Foreign Investments
5. Licensing