GMS 522 Final questions well answered
to pass
Internationalization - correct 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 - correct 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 - correct answer ✔✔the motivation for internationalization may either be proactive (firm
wants to) or reactive (firm has little choice)
Uppsala or U model - correct 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 - correct answer ✔✔firms expand abroad to capitalize on ownership, location
and internalization advantages
Advantages of Dunnings OLI framework - correct 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 - correct 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 - correct answer ✔✔1)Macro segmentation
2)Preliminary screening
3)Secondary screening
4)Final security selection
Macro Segmentation - correct answer ✔✔-develop segmentation criteria
-apply to group countries
Preliminary screening - correct answer ✔✔-develop additional criteria
-apply to reduce the # of candidate countries
Secondary screening - correct answer ✔✔-firm assesses its own capabilities relative to the market
Final security selection - correct answer ✔✔-conduct site visit
Selecting Foreign Markets - correct 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 - correct 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 - correct answer ✔✔macro-segmentation based on overall market
attractiveness
Consumer level screening - correct answer ✔✔micro-segmentation based on personal and societal
values
, Types of Entry modes - correct answer ✔✔-export
-intermediate
-hierarchical
Export Modes - correct answer ✔✔low risk-low return modes which provide limited control for the
exporting firm
Intermediate Modes - correct 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 - correct answer ✔✔modes in which firm has complete control of the operation but
also exposure to a higher level of risk
Exporting - correct answer ✔✔involves the manufacture of a product in one country and its sale in one
or more foreign countries
Two forms of exporting - correct answer ✔✔-direct
-indirect
Direct Exporting - correct answer ✔✔exporters transact with an intermediary based in the foreign
market
Indirect Exporting - correct 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 - correct 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
to pass
Internationalization - correct 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 - correct 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 - correct answer ✔✔the motivation for internationalization may either be proactive (firm
wants to) or reactive (firm has little choice)
Uppsala or U model - correct 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 - correct answer ✔✔firms expand abroad to capitalize on ownership, location
and internalization advantages
Advantages of Dunnings OLI framework - correct 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 - correct 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 - correct answer ✔✔1)Macro segmentation
2)Preliminary screening
3)Secondary screening
4)Final security selection
Macro Segmentation - correct answer ✔✔-develop segmentation criteria
-apply to group countries
Preliminary screening - correct answer ✔✔-develop additional criteria
-apply to reduce the # of candidate countries
Secondary screening - correct answer ✔✔-firm assesses its own capabilities relative to the market
Final security selection - correct answer ✔✔-conduct site visit
Selecting Foreign Markets - correct 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 - correct 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 - correct answer ✔✔macro-segmentation based on overall market
attractiveness
Consumer level screening - correct answer ✔✔micro-segmentation based on personal and societal
values
, Types of Entry modes - correct answer ✔✔-export
-intermediate
-hierarchical
Export Modes - correct answer ✔✔low risk-low return modes which provide limited control for the
exporting firm
Intermediate Modes - correct 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 - correct answer ✔✔modes in which firm has complete control of the operation but
also exposure to a higher level of risk
Exporting - correct answer ✔✔involves the manufacture of a product in one country and its sale in one
or more foreign countries
Two forms of exporting - correct answer ✔✔-direct
-indirect
Direct Exporting - correct answer ✔✔exporters transact with an intermediary based in the foreign
market
Indirect Exporting - correct 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 - correct 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
