GMS 522 Final Exam Questions with
Actual Answers 2026 Updated.
Internationalization - Answer -defined as the process by which firms become more engaged in
international markets.
-the process involves varying degrees of financial and other resource commitments to foreign
markets and of course, various degrees of risk
Mode of Entry - Answer central to the process of internationalization is the selection of an
entry mode. These range from low commitment modes such as exporting high commitment
modes such as foreign direct investment
Motivation - Answer the motivation for internationalization may either be proactive (firm
wants to) or reactive (firm has little choice)
Uppsala or U model - Answer the firm first expands to a psychically close market and having
become familiar with that market, will target slightly more distant markets. experiential
knowledge is the major driver of its pattern of internationalization. The Uppsala model has been
criticized for its linear approach to the internationalization process
Dunnings OLI framework - Answer firms expand abroad to capitalize on ownership, location
and internalization advantages
Advantages of Dunnings OLI framework - Answer -ownership of foreign assets will confer on
the firm a competitive advantage in the foreign market which is not enjoyed by competing firms
that do not own such assets
-location confers advantages in terms of tax or other investment incentives offered by the gov't
of the host country or a more favorable industrial relations climate for the firm's operations
-internalization of firm-specific advantages such as proprietary technology confers benefits to
the firm over alternatives such as licensing
Springboard or latecomer perspective - Answer emerging market firms internationalize in
order to overcome limitations inherent in their home-country environment, such as small
market size, institutional immaturity or a relatively unsophisticated consumer base. To
accomplish this firms aggressively acquire strategic assets from MNCs in developed countries
Systematic four-step process - Answer 1)Macro segmentation
2)Preliminary screening
3)Secondary screening
4)Final security selection
,Macro Segmentation - Answer -develop segmentation criteria
-apply to group countries
Preliminary screening - Answer -develop additional criteria
-apply to reduce the # of candidate countries
Secondary screening - Answer -firm assesses its own capabilities relative to the market
Final security selection - Answer -conduct site visit
Selecting Foreign Markets - Answer the end result of the process is the selection of one
country from the universe of potential candidates by a process of elimination
International consumer segmentation - Answer consumers in cross-national segments may
have more in common with their counterparts in other countries than they do with citizen of
their own countries. If this is the case a two-stage model may be appropriate in which
segmentation is undertaken at both the country and consumer levels
Country Level Screening - Answer macro-segmentation based on overall market attractiveness
Consumer level screening - Answer micro-segmentation based on personal and societal values
Types of Entry modes - Answer -export
-intermediate
-hierarchical
Export Modes - Answer low risk-low return modes which provide limited control for the
exporting firm
Intermediate Modes - Answer modes which provide for the sharing of the risks and rewards of
market entry commensurate with the share of ownership of each partner
Hierarchical Modes - Answer modes in which firm has complete control of the operation but
also exposure to a higher level of risk
, Exporting - Answer involves the manufacture of a product in one country and its sale in one or
more foreign countries
Two forms of exporting - Answer -direct
-indirect
Direct Exporting - Answer exporters transact with an intermediary based in the foreign market
Indirect Exporting - Answer exporter transacts with an intermediary based in its home country.
This intermediary takes responsibility for getting the exporter's product into foreign country.
Domestic transaction from standpoint of the exporter
Advantages to exporting - Answer -requires little by way of managerial skills or knowledge of
the foreign market
-carries with it minimal risk for the firm
-does not involve significant costs for the firm
Disadvantages to exporting - Answer -lower returns relative to other entry modes
-little control over how the product is positioned and sold in the foreign market
-little opportunity to develop a deep understanding of the foreign market
Types of Intermediaries - Answer -export buying agents
-export import broker
-export management company
-trading firms
-distributors
-agents
Export buying agents - Answer these agents are resident in the country of the manufacturer
but work on behalf of a foreign buyer
Export-import broker - Answer brokers bring buyer and seller together. They are specialist
firms and have deep expertise in a relatively narrow range of product categories
Export management company - Answer These are domestic firms which act on behalf of a # of
non-competing exporters .Take title to the production they handle and market them
internationally for their own account or they may act as agents
Actual Answers 2026 Updated.
Internationalization - Answer -defined as the process by which firms become more engaged in
international markets.
-the process involves varying degrees of financial and other resource commitments to foreign
markets and of course, various degrees of risk
Mode of Entry - Answer central to the process of internationalization is the selection of an
entry mode. These range from low commitment modes such as exporting high commitment
modes such as foreign direct investment
Motivation - Answer the motivation for internationalization may either be proactive (firm
wants to) or reactive (firm has little choice)
Uppsala or U model - Answer the firm first expands to a psychically close market and having
become familiar with that market, will target slightly more distant markets. experiential
knowledge is the major driver of its pattern of internationalization. The Uppsala model has been
criticized for its linear approach to the internationalization process
Dunnings OLI framework - Answer firms expand abroad to capitalize on ownership, location
and internalization advantages
Advantages of Dunnings OLI framework - Answer -ownership of foreign assets will confer on
the firm a competitive advantage in the foreign market which is not enjoyed by competing firms
that do not own such assets
-location confers advantages in terms of tax or other investment incentives offered by the gov't
of the host country or a more favorable industrial relations climate for the firm's operations
-internalization of firm-specific advantages such as proprietary technology confers benefits to
the firm over alternatives such as licensing
Springboard or latecomer perspective - Answer emerging market firms internationalize in
order to overcome limitations inherent in their home-country environment, such as small
market size, institutional immaturity or a relatively unsophisticated consumer base. To
accomplish this firms aggressively acquire strategic assets from MNCs in developed countries
Systematic four-step process - Answer 1)Macro segmentation
2)Preliminary screening
3)Secondary screening
4)Final security selection
,Macro Segmentation - Answer -develop segmentation criteria
-apply to group countries
Preliminary screening - Answer -develop additional criteria
-apply to reduce the # of candidate countries
Secondary screening - Answer -firm assesses its own capabilities relative to the market
Final security selection - Answer -conduct site visit
Selecting Foreign Markets - Answer the end result of the process is the selection of one
country from the universe of potential candidates by a process of elimination
International consumer segmentation - Answer consumers in cross-national segments may
have more in common with their counterparts in other countries than they do with citizen of
their own countries. If this is the case a two-stage model may be appropriate in which
segmentation is undertaken at both the country and consumer levels
Country Level Screening - Answer macro-segmentation based on overall market attractiveness
Consumer level screening - Answer micro-segmentation based on personal and societal values
Types of Entry modes - Answer -export
-intermediate
-hierarchical
Export Modes - Answer low risk-low return modes which provide limited control for the
exporting firm
Intermediate Modes - Answer modes which provide for the sharing of the risks and rewards of
market entry commensurate with the share of ownership of each partner
Hierarchical Modes - Answer modes in which firm has complete control of the operation but
also exposure to a higher level of risk
, Exporting - Answer involves the manufacture of a product in one country and its sale in one or
more foreign countries
Two forms of exporting - Answer -direct
-indirect
Direct Exporting - Answer exporters transact with an intermediary based in the foreign market
Indirect Exporting - Answer exporter transacts with an intermediary based in its home country.
This intermediary takes responsibility for getting the exporter's product into foreign country.
Domestic transaction from standpoint of the exporter
Advantages to exporting - Answer -requires little by way of managerial skills or knowledge of
the foreign market
-carries with it minimal risk for the firm
-does not involve significant costs for the firm
Disadvantages to exporting - Answer -lower returns relative to other entry modes
-little control over how the product is positioned and sold in the foreign market
-little opportunity to develop a deep understanding of the foreign market
Types of Intermediaries - Answer -export buying agents
-export import broker
-export management company
-trading firms
-distributors
-agents
Export buying agents - Answer these agents are resident in the country of the manufacturer
but work on behalf of a foreign buyer
Export-import broker - Answer brokers bring buyer and seller together. They are specialist
firms and have deep expertise in a relatively narrow range of product categories
Export management company - Answer These are domestic firms which act on behalf of a # of
non-competing exporters .Take title to the production they handle and market them
internationally for their own account or they may act as agents
