GEB 4890 1 PRACTICE EXAMINATION
2026 QUESTIONS WITH ANSWERS
GRADED A+
◍ Why do firms consider foreign expansion?.
Answer: -To gain access to new customers and meet current customer
needs-To achieve lower costs through economies of scale, experience, and
increased purchasing power-To further exploit core competencies-To gain
access to resources and capabilities located in foreign markets-To gain
access to lower-cost inputs of production-To further exploit core
competencies
◍ the different modes of entering foreign markets and the pros and cons of
each (ex. exporting, franchising, etc.)..
Answer: Maintain a home country production base and export goods to
foreign markets.♦ License foreign firms to produce and distribute the firm's
products abroad.♦ Employ a franchising strategy in foreign markets.♦
Establish a subsidiary in a foreign market via acquisition or internal
development.♦ Rely on strategic alliances or joint ventures with foreign
companies.
◍ A winning strategy must pass which three tests?.
Answer: the fit test, the competitive advantage test, and the performance test
◍ Export Strategies Advantages.
Answer: - Low capital requirements- Economies of scale in utilizing
existing production capacity- No distribution risk - No direct investment risk
◍ Export Strategies Disadvantages.
Answer: -Maintaining relative cost advantage of home-based
production-Transportation and shipping costs-Exchange rates
, risks-Tariffs\import duties-Loss of channel control
◍ LICENSING AND FRANCHISING STRATEGIES.
Answer: AdvantagesLow resource requirementsIncome from royalties and
franchising feesRapid expansion into many
marketsDisadvantagesMaintaining control of proprietary know-howLoss of
operational and quality controlAdapting to local market tastes and
expectations
◍ FOREIGN SUBSIDIARY STRATEGIES.
Answer: AdvantagesHigh level of controlQuick large-scale market
entryAvoids entry barriersAccess to acquired firm's
skillsDisadvantagesCosts of acquisitionComplexity of acquisition
processIntegration of the firms' structures, cultures, operations and
personnel
◍ Due to impending labor strife over planned layoffs in its Silicon Valley
headquarters, a social networking company has decided to outsource its
programming operations to an emerging market, India, to obtain cheaper
labor. Since then, this social networking company has encountered criticism
that has diminished its current market position and staff productivity. You
have been retained by this company to develop an appropriate reactive
(emergent) strategy that would begin by.
Answer: cancelling the job cuts till the market situation and entry operations
stabilize.
◍ An evolving strategy for a ride-share business like Uber or Lyft is not likely
to be triggered by.
Answer: their need to respond to short-term swings in the stock market that
impact timing of an initial public offering (IPO).
◍ Greenfield Strategy.
Answer: ● Creating an internal startup is cheaper than making an
acquisition● Adding new production capacity will not adversely impact the
supply-demand balance in the local market● A startup subsidiary has the
ability to gain good distribution access● A startup subsidiary will have the
, size, cost structure, and resource strengths to compete head-to-head against
local rivals
◍ It is normal for a company's strategy to end up being.
Answer: a blend of proactive actions to improve the company's
competitiveness and financial performance, and adaptive reactions to
unanticipated developments and fresh market conditions.
◍ Greenfield Strategy Advantages.
Answer: - High level of control over venture- "Learning by doing" in the
local market- Direct transfer of the firm's technology, skills, business
practices, and culture
◍ Greenfield Strategy Disadvantages.
Answer: -Capital costs of initial development-Risks of loss due to political
instability or lack of legal protection of ownership-Slowest form of entry
due to extended time required to construct facility
◍ A regional electric scooter manufacturer sells its scooter at a lower price
than other manufacturers of two-wheeler scooters. What will make the
product most attractive for customers?.
Answer: high value
◍ STRATEGIC ALLIANCES WITH FOREIGN PARTNERS not on review.
Answer: outdated knowledge and expertise of local partners♦ Cultural and
language barriers♦ Costs of establishing the working arrangement♦
Conflicting objectives and strategies or deep differences of opinion about
joint control♦ Differences in corporate values and ethical standards♦ Loss of
legal protection of proprietary technology or competitive advantage♦
Overdependence on foreign partners for essential expertise and competitive
capabilities
◍ Why are crafting and executing business strategies the foremost tasks of any
organization?.
Answer: because a good strategy coupled with a good strategy execution are
the most telling signs of good management and allow a company to be a
2026 QUESTIONS WITH ANSWERS
GRADED A+
◍ Why do firms consider foreign expansion?.
Answer: -To gain access to new customers and meet current customer
needs-To achieve lower costs through economies of scale, experience, and
increased purchasing power-To further exploit core competencies-To gain
access to resources and capabilities located in foreign markets-To gain
access to lower-cost inputs of production-To further exploit core
competencies
◍ the different modes of entering foreign markets and the pros and cons of
each (ex. exporting, franchising, etc.)..
Answer: Maintain a home country production base and export goods to
foreign markets.♦ License foreign firms to produce and distribute the firm's
products abroad.♦ Employ a franchising strategy in foreign markets.♦
Establish a subsidiary in a foreign market via acquisition or internal
development.♦ Rely on strategic alliances or joint ventures with foreign
companies.
◍ A winning strategy must pass which three tests?.
Answer: the fit test, the competitive advantage test, and the performance test
◍ Export Strategies Advantages.
Answer: - Low capital requirements- Economies of scale in utilizing
existing production capacity- No distribution risk - No direct investment risk
◍ Export Strategies Disadvantages.
Answer: -Maintaining relative cost advantage of home-based
production-Transportation and shipping costs-Exchange rates
, risks-Tariffs\import duties-Loss of channel control
◍ LICENSING AND FRANCHISING STRATEGIES.
Answer: AdvantagesLow resource requirementsIncome from royalties and
franchising feesRapid expansion into many
marketsDisadvantagesMaintaining control of proprietary know-howLoss of
operational and quality controlAdapting to local market tastes and
expectations
◍ FOREIGN SUBSIDIARY STRATEGIES.
Answer: AdvantagesHigh level of controlQuick large-scale market
entryAvoids entry barriersAccess to acquired firm's
skillsDisadvantagesCosts of acquisitionComplexity of acquisition
processIntegration of the firms' structures, cultures, operations and
personnel
◍ Due to impending labor strife over planned layoffs in its Silicon Valley
headquarters, a social networking company has decided to outsource its
programming operations to an emerging market, India, to obtain cheaper
labor. Since then, this social networking company has encountered criticism
that has diminished its current market position and staff productivity. You
have been retained by this company to develop an appropriate reactive
(emergent) strategy that would begin by.
Answer: cancelling the job cuts till the market situation and entry operations
stabilize.
◍ An evolving strategy for a ride-share business like Uber or Lyft is not likely
to be triggered by.
Answer: their need to respond to short-term swings in the stock market that
impact timing of an initial public offering (IPO).
◍ Greenfield Strategy.
Answer: ● Creating an internal startup is cheaper than making an
acquisition● Adding new production capacity will not adversely impact the
supply-demand balance in the local market● A startup subsidiary has the
ability to gain good distribution access● A startup subsidiary will have the
, size, cost structure, and resource strengths to compete head-to-head against
local rivals
◍ It is normal for a company's strategy to end up being.
Answer: a blend of proactive actions to improve the company's
competitiveness and financial performance, and adaptive reactions to
unanticipated developments and fresh market conditions.
◍ Greenfield Strategy Advantages.
Answer: - High level of control over venture- "Learning by doing" in the
local market- Direct transfer of the firm's technology, skills, business
practices, and culture
◍ Greenfield Strategy Disadvantages.
Answer: -Capital costs of initial development-Risks of loss due to political
instability or lack of legal protection of ownership-Slowest form of entry
due to extended time required to construct facility
◍ A regional electric scooter manufacturer sells its scooter at a lower price
than other manufacturers of two-wheeler scooters. What will make the
product most attractive for customers?.
Answer: high value
◍ STRATEGIC ALLIANCES WITH FOREIGN PARTNERS not on review.
Answer: outdated knowledge and expertise of local partners♦ Cultural and
language barriers♦ Costs of establishing the working arrangement♦
Conflicting objectives and strategies or deep differences of opinion about
joint control♦ Differences in corporate values and ethical standards♦ Loss of
legal protection of proprietary technology or competitive advantage♦
Overdependence on foreign partners for essential expertise and competitive
capabilities
◍ Why are crafting and executing business strategies the foremost tasks of any
organization?.
Answer: because a good strategy coupled with a good strategy execution are
the most telling signs of good management and allow a company to be a
