MGMT 5207 - IB Management - Chapter 12 and 13 Quiz

In an era of global electronic communications, is there still a need for face-to-face meetings that occur through trade missions?

• Yes, because they build personal relationships and trust.

• No, because electronic communications are sufficient.

• Yes, because they are more cost-effective than electronic communications.

• No, because they are outdated and unnecessary.

Which countries and economic sectors would benefit from a future trade mission based on the review of past trade missions?

• Country A - Technology Sector

• Country B - Agriculture Sector

• Country C - Manufacturing Sector

• Country D - Tourism Sector

Why did Tesco’s initial international expansion strategy focus on developing nations?

• To leverage lower competition and high growth potential

• To access advanced technology and infrastructure

• To establish a premium brand image

• To avoid regulatory challenges

How does the need for control over foreign operations vary with firms’ strategies and core competencies, and what are the implications for the choice of entry mode?

• The need for control is higher for firms with strong core competencies, leading to entry modes like wholly owned subsidiaries.

• Firms with weak core competencies prefer joint ventures to share control.

• Firms with strong core competencies prefer licensing to minimize control.

• The need for control does not vary with firms' strategies and core competencies.

A small Canadian firm that has developed valuable new medical products using its unique biotechnology know-how is trying to decide how best to serve the European Union market. Its choices are given below. The cost of investment in manufacturing facilities will be a major one for the Canadian firm, but it is not outside its reach. If these are the firm’s only options, which one would you advise it to choose? Why?

• Manufacture the products at home, and let foreign sales agents handle marketing.

• Manufacture the products at home, and set up a wholly owned subsidiary in Europe to handle marketing.

• Enter into an alliance with a large European pharmaceutical firm. The products would be manufactured in Europe by the 50–50 joint venture and marketed by the European firm.

Can the direct sales model work as a market entry strategy internationally? Where can it work, and where does it potentially not work?

• Yes, it can work in all international markets.

• Yes, it can work in some markets but not in others.

• No, it cannot work in any international market.

• It depends on the product being sold.

How can a small Canadian biotechnology firm leverage its unique know-how to gain a competitive advantage in the European Union market?

• By focusing on niche markets with less competition.

• By forming strategic alliances with local firms.

• By investing heavily in local marketing campaigns.

• By offering significant discounts to undercut competitors.

What factors should be considered when deciding whether to use a direct sales model for market entry in a new international market?

• The cultural acceptance of direct sales in the target market.

• The regulatory environment regarding direct sales.

• The cost-effectiveness compared to other entry strategies.

• All of the above.

What are the potential risks and benefits of forming a joint venture with a local firm when entering a new international market?

• Risks include loss of control and cultural clashes, while benefits include local market knowledge and shared resources.

• Risks include increased competition, while benefits include complete control over operations.

• Risks include high costs, while benefits include reduced regulatory challenges.

• There are no significant risks or benefits associated with joint ventures.

How can a firm determine the most suitable entry mode for a new international market?

• By analyzing the competitive landscape and regulatory environment.

• By considering only the cost of entry.

• By focusing solely on the firm's existing market strategies.

• By randomly selecting an entry mode.