MNMT 3850 CHAPTER 15 HOMEWORK QUESTIONS AND ANSWERS

MNMT 3850 CHAPTER 15 HOMEWORK QUESTIONS AND ANSWERS Essentials of Entrepreneurship & Small Business Mgmt., 7e (Scarborough) Chapter 15 Global Opportunities 1) Becoming a global entrepreneur requires: A) constant innovation. B) maintaining a high level of quality and constantly improving it. C) being sensitive to foreign customers' unique requirements and adopting a more respectful attitude toward foreign habits and customs. D) All of the above 2) For an entrepreneur, expanding into international markets: A) guarantees its success in the marketplace. B) makes it a member of GATT automatically. C) helps it grow faster and survive competition better. D) leads to business failure for companies under $100 million in annual revenue. 3) The first obstacle an entrepreneur must overcome on the way to creating a truly global business is: A) finding a joint venture partner. B) learning to think globally. C) locating motivated, multilingual managers for overseas assignments. D) finding overseas distributors for the company's products. 4) Before going global, entrepreneurs should ask themselves questions regarding: A) profit potential and commitment of resources for a global effort. B) a viable exit strategy and the cost of not going global. C) the reasons, rationale, and understanding cultural differences. D) All the above 5) All of these are steps small companies follow when they begin conducting global business on the Web except: A) connecting to e-mail. B) building a globally accessible Web site. C) setting up links to related company Web sites. D) using the Web to conduct international market research. 6) Which of the following statements is/are true regarding export management companies? A) Most are merchant intermediaries that work on a buy-and-sell arrangement with domestic small companies. B) They provide small businesses with a low-cost, efficient, independent, international marketing department. C) Many specialize in particular products or product lines and offer services ranging from market research and advice or patent protection, to arranging financing and handling shipping. D) All of the above 7) An export trading company: A) is a business that buys and sells products in many countries, either in its own name or as an agent for its buyer-seller clients. B) typically offers a wide range of services such as exporting, shipping, storing, distributing, and others to their clients. C) is formed by an agreement by which a licenser gives a foreign licensee the right to use a patent, trademark, copyright, technology, and products in return for a percentage of the licensee's sales or profits. D) Both A and C above 8) Which of the following trade intermediaries lowers the risk of exporting for a small business? A) Export management companies B) Export trading companies C) Resident buying offices D) All of the above 9) ________ act as international sales representatives in a limited number of markets for various noncompeting domestic companies, typically operating on a commission basis. A) Manufacturers' export agents B) Export merchants C) Resident buying offices D) Foreign distributors 10) A resident buying office is: A) a business that buys and sells products in many countries, either in its own name or as an agent for its buyer-seller clients. B) a government-owned or business-owned facility set up in a foreign country to buy products that are made there. C) a firm in an overseas distribution network selling noncompetitive products made by other firms. D) formed by an agreement where a licenser gives a foreign licensee the right to use a patent, trademark, copyright, technology, and products in return for a percentage of the licensee's sales or profits. 11) ________ are domestic wholesalers who do business in foreign markets, buying goods from domestic companies and selling them in foreign markets, often handling competing lines. A) Resident buying offices B) Export trading companies C) Foreign distributors D) Export merchants 12) Foreign distributors offer small businesses which of the following benefits? A) A detailed knowledge of the local markets in which they sell B) The ability to cover a foreign sales territory thoroughly C) The ability to handle all of the marketing, distribution, and service functions in foreign markets D) All of the above 13) In a(n) ________, two or more U.S. small businesses form an alliance for the purpose of exporting their goods and services. The companies get antitrust immunity and share responsibility for the business equally. A) foreign joint venture B) trade intermediary C) domestic joint venture D) export management company 14) In a(n) ________, a domestic small business forms an alliance with a company in the target nation for the purpose of exporting to that market. A) foreign joint venture B) trade intermediary C) domestic joint venture D) export management company 15) The most important ingredient for a successful joint venture is: A) targeting the right country in which to sell. B) getting government approval and avoiding antitrust charges. C) choosing the right partner. D) splitting costs and profits equally. 16) Which of the following is a common problem in joint ventures? A) Incompatible management styles among partners B) Failure of partners to establish common goals C) Failure of partners to carefully determine each party's contributions and responsibilities, distribution of earnings, etc. D) All of the above A