Arizona State University - MGT 302

Chapter 15 Entry Strategy and Strategic Alliances

True / False Questions

1)The choice of which markets to enter should be driven by an assessment of relative long- run growth and profit potential.

True   False

2. 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.

True   False

3. The value an international business creates in a foreign market depends on the suitability of its product offering to that market and the nature of indigenous competition.

True   False

4. Educating customers is a part of pioneering costs.

True   False

5. A strategic commitment can be reversed by the top management according to their convenience.

True   False

6. Small-scale entry allows a firm to learn about a foreign market while limiting the firm's exposure to that market.

True   False

7. Exporting is most appropriate when lower-cost locations for manufacturing the product can be found abroad.

True   False

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

True   False

9. Licensing limits the firm's ability to realize experience curve and location economies by producing its product in a centralized location.

True   False

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

True   False

11. The most typical joint venture is a 25/75 venture.

True   False

12. A wholly owned subsidiary limits a firm's control over operations in different countries.

True   False

13. Brand names are generally well-protected by international laws pertaining to trademarks.

True   False

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

True   False

15. Acquisitions rarely produce disappointing results.

True   False

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

True   False

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

True   False

18. Unlike joint ventures, strategic alliances require the firm to bear all the costs and risks of foreign expansion.

True   False

19. A good ally will expropriate the firm's technological know-how while giving away little in return.

True   False

20. Contractual safeguards cannot be written into an alliance agreement to guard against the risk of opportunism by a partner.

True   False