Entering Foreign Market (2-3:30)

All of the following are the basic entry decisions for firms expanding internationally, except.

• Which markets to enter

• When to enter them and on what scale

• Amount of investment and benefits

• Choice of entry mode

Which of the following are not cons of Greenfield ventures?

• slower to establish

• risky because they have no proven track record

• it gives the firm a much greater ability to build the kind of subsidiary company that it wants

• can be problematic if a competitor enters via acquisition and quickly builds market share

Entry is early when firms enters a domestic market before other foreign firms

• True

• False

Cost that an early entrant has to bear that a later entrant can avoid

• Pioneering cost

• Overhead cost

• Marketing Cost

• Introduction Cost

Why do acquisitions fail?

• there is inadequate pre-acquisition screening

• the possibility of being preempted by more aggressive global competitors that enter via acquisitions and build a big market presence

• moving rapidly once the firm is acquired to implement an integration plan

Entry is early when firms enters a domestic market before other foreign firms

• True

• False

If the firm is seeking to enter a market in which there are already well-established incumbent enterprises, and in which global competitors are also interested in establishing a presence, acquisition may be the better mode of entry.

• True

• False

The most favorable markets are politically unstable developed and developing nations with free market system, low inflation and low private sector debt.

• True

• False

A Japanese car manufacturer acquires an Italian producer of car tires. This is an example of a greenfield investment.

• True

• False

First mover disadvantages are associated with exiting a foreign market before other international businesses

• True

• False