Entry Strategy And Strategic Alliances

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Question 1
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The choice of which international markets to enter should be driven by an assessment of absolute short-run growth and profit potential.

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Question 2
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The attractiveness of a country as a potential market for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country.

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Question 3
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When determining the value of a foreign market, an international firm must consider both its products and the competition.

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Question 4
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Educating customers is an element of pioneering costs.

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Question 5
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A strategic commitment can be reversed by the top management at will.

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Question 6
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Gadgets, Inc., wants to enter a foreign market on a small scale. This will allow it to learn about the market while limiting the firm's exposure to that market.

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Question 7
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Exporting from a firm's home base is most appropriate when lower-cost locations for manufacturing the product can be found abroad.

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Question 8
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Tangible property includes patents, designs, copyrights, and trademarks.

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Question 9
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By producing its product in a centralized location, licensing limits a firm's ability to realize experience curve and location economies. 

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Question 10
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Franchising enables a firm to quickly build a global presence.

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Question 11
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The most typical joint venture is a 60-40 venture, in which one party holds most of the ownership stake.

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Question 12
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A wholly owned subsidiary limits a firm's control over marketing and sales in different countries.

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Question 13
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If a firm's core competence is proprietary technological knowledge, a joint venture is preferable.

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Question 14
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Brand names such as Starbucks and Subway are well protected by international laws pertaining to trademarks.

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Question 15
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A joint venture is often politically more acceptable than a wholly owned subsidiary and brings a degree of local knowledge to the subsidiary.

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Question 16
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The greater the pressures for cost reductions, the more likely a firm will want to pursue some combination of exporting and wholly owned subsidiaries.

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Question 17
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Acquisitions rarely produce disappointing results.

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Question 18
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Overpayment for assets of an acquired firm is one reason acquisitions fail.

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Question 19
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Greenfield ventures are less risky than acquisitions in the sense that there is less potential for unpleasant surprises.

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Question 20
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Johan's firm is considering entering a country where there are no incumbent competitors to be acquired. Its best option is likely to be a greenfield venture.

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