Entering foreign markets

Which of the following is a reason why a business might enter a foreign market?

• To reduce production costs

• To increase employee turnover

• To reduce product quality

• To avoid competition

What is the term for selling goods abroad without physically setting up in the foreign country?

• Licensing

• Exporting

• Franchising

• Joint venture

Which of the following is a disadvantage of exporting?

• Reduced transportation costs

• Lower risk of non-payment

• Language and cultural barriers

• Less market expansion

What is a joint venture?

• Buying a foreign competitor

• Setting up a business without local partners

• Partnership between a domestic and foreign company

• Selling only online

Which entry method involves allowing another business to produce and sell your product under your brand?

• Licensing
  

• Franchising

• Exporting

• Merging

One advantage of franchising in a foreign market is:

• Total control over all outlets

• High capital investment needed

• Rapid expansion with less investment

• No need to train franchisees

What is a tariff?

• A tax on domestic goods

• A government grant

• A tax on imported goods

• A type of legal contract

Which of these is a risk when entering a foreign market?

• Increased brand loyalty

• Higher profits

• Decreased competition

• Exchange rate fluctuations

Why might a business choose to form a joint venture?

• To avoid local laws

• To reduce brand visibility

• To benefit from local knowledge

• To keep all profits

What is globalization in business?

• Increased interconnection of markets

• Selling only in your own country

• Avoiding foreign competition

• Government control of trade