Quiz #3 (ch. 8-9) Flashcards
What are the three major reasons a company will expand internationally?
- Saturated market at home
- Seek to spread risk by diversifying
- Competitive disadvantage of not entering market with faster growth rates
What are the four market entry strategies?
- Licensing
- Franchising
- Joint venture
- Wholly owned subsidiaries
Which market entry strategy has the disadvantage of the most risk?
Wholly-owned subsidiaries
Which market entry strategy has the risk “loss control of technology”
Joint venture
Which market entry strategies are the lowest cost and lowest risk strategies?
Licensing and franchising
Which market entry strategy provides the greatest share of profits?
Wholly-owned subsidiaries
Psychic distance paradox
Similarities can be overestimated
Target enters Canada using the same strategies that have worked in the US. Unfortunately, they failed. What did Target fail to account for?
Psychic distance paradox: Similarities can be overestimated.
What is the disadvantage of being a first mover?
First mover will make major investments while followers can learn from the successes and failures.
How long was Best Buy in Turkey?
14 months
What are the four top reasons for exiting a market?
- Tough competition
- Financial considerations
- Refocus on home market
- Political considerations
What is the example given for exiting a market due to tough competition?
Yahoo abandoned UK, Ireland, France, Germany, and Spain
What is the example given for exiting a market due to financial considerations?
Tesco has decelerated its international expansion after exiting Japan and USA.
What is the example given for exiting a market to refocus on the home market?
M&S divestment decisions in late 1990s are explained by the decline of sales at home.
What is the example given for exiting a market due to political considerations?
Louis Vuitton abandoned Argentina in 2012 due to tight government restrictions
What is an intangible cost to exiting a market?
Exiting one market could lead to firm losing credibility in other markets
______ left Russia after just four months.
Carrefour
__________ reentered the UK after Mexican food increased in popularity there.
Taco Bell
What is the Dunkin’ Donuts example for market reentry given in class?
Dunkin’ Donuts returned to Russia 11 years after exiting in response to competitor’s Starbucks recent success there.
_______ reentered Japan after 20 years
IKEA
How did Subway adapt to their product offering in Singapore? South Africa?
Singapore: People don’t eat sandwiches, so they had to customize the bread they were using.
South Africa: A traditional sandwich is a chicken mayo, so Subway started offering this sandwich in their South Africa stores.
Country of origin effect
The influence that the country of manufacture, assembly, or design has on the perceived quality of the product.
Apple’s phones used to say “Designed in California” on the back. What is Apple taking advantage of?
The country of origin effect
What is the Frito-Lay example of adaptation?
Fried foods in China are associated with yang, a food that causes body heat and should be avoided in the summer. To combat this perception, Frito-Lay introduced a “cool lemon” chip packaged in pastel shades.
What is the P&G example of adaptation?
P&G had to adapt Cheer detergent in Japan because customers liked to use cold tap water and used bath water.
What is the IKEA example of adaptation?
IKEA’s marketing strategy differs between Europe and China.
How does promotion strategies for IKEA differ between china and Europe
In Europe, IKEA catalogue is the main marketing too.
In China, IKEA advertises on social media and micro-blogging websites.
Logistically how does IKEA differ between Europe and China?
IKEA makes its products in China for lower labor costs and for no import taxes when selling in the Chinese market
Does McDonald’s use a standardized approach or adapted approach between markets?
Company uses a standardized approach for many products but adapts its product between markets
What are the four ways services differ from products?
- Intangible - cannot be stored or readily displayed.
- Simultaneous - production and consumption happen at the same time.
- Heterogeneous - production lines do not exist to deliver standardized products.
- Perishable - cannot be stored
True or false: Services are heterogeneous
True
