GEB 4890 1 TEST BANK 2026 COMPLETE
QUESTIONS AND SOLUTIONS VERIFIED
RESULTS
●● 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.
●● 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: Advantages
Low resource requirements
Income from royalties and franchising fees
Rapid expansion into many markets
Disadvantages
Maintaining control of proprietary know-how
Loss of operational and quality control
Adapting to local market tastes and expectations
●● FOREIGN SUBSIDIARY STRATEGIES
Answer: Advantages
High level of control
Quick large-scale market entry
Avoids entry barriers
Access to acquired firm's skills
, Disadvantages
Costs of acquisition
Complexity of acquisition process
Integration of the firms' structures, cultures, operations and personnel
●● 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
●● 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
QUESTIONS AND SOLUTIONS VERIFIED
RESULTS
●● 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.
●● 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: Advantages
Low resource requirements
Income from royalties and franchising fees
Rapid expansion into many markets
Disadvantages
Maintaining control of proprietary know-how
Loss of operational and quality control
Adapting to local market tastes and expectations
●● FOREIGN SUBSIDIARY STRATEGIES
Answer: Advantages
High level of control
Quick large-scale market entry
Avoids entry barriers
Access to acquired firm's skills
, Disadvantages
Costs of acquisition
Complexity of acquisition process
Integration of the firms' structures, cultures, operations and personnel
●● 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
●● 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
