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Exam 21: Tapping Into Global Markets

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Question 51

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WayToGrow Inc. is one of the most popular brand of toys in its home market. The company decides to expand its business abroad and its board of directors feel that instead of trying to establish its presence all at once in multiple markets, it is better to expand one country at a time. This would limit their risk and allow them to analyze customer response, after which they could expand to other similar countries. WayToGrow is following a ________.

A) shotgun approach
B) continuous approach
C) born global approach
D) sprinkler approach
E) waterfall approach

F) A) and D)
G) A) and C)

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Question 52

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Briefly describe the advantages of direct investment.

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In direct investment, the firm: (1) secu...

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Question 53

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Trends Inc. produces and markets casual wear for men and women. The company wants to be a global brand and is planning to enter a few chosen markets across Europe and Asia. To accommodate the differences in purchasing power and costs of shipping goods to the retailers, the company has decided to use cost-based pricing in each country. In order to ensure that this strategy is successful, Trends must first make sure that ________.

The creation of the European Union has benefited marketers wanting to enter Europe because they now have access to a homogeneous market consisting of 27 countries.

In licensing, the licensor issues a license to a foreign company to use an item of value for a fee or royalty.

Various governments force companies to charge the ________ price, which is charged by other competitors for the same or a similar product.

International companies must decide how much to adapt their marketing strategy to local conditions. Identify and explain the two strategies companies can use.

Define the internationalization process' four stages.

Regional economic integration is defined as the creation of trading agreements between ________.

In which of the following modes of licensing does the firm hire local producers to produce the product, giving the company less control over the manufacturing process?

What are global organizations?

When the licensor provides the licensee with a complete brand concept and operating system, the arrangement is called contract manufacturing.

In a sprinkler approach to international expansion, ________.

Hotel chains such as Hyatt sell a variation of the licensing agreement called ________ to the owners of foreign hotels to manage these businesses for a fee.

A2Z Inc. is a producer of a huge variety of consumer goods, from soaps to shower gels, and shampoos to detergents. It is a market leader in Malaysia and is planning to tap the immense potential in the emerging markets. Market research, however, indicates that the Indian culture and society are substantially different from their Malaysian counterparts. If the company wants to target the masses, which of the following options is most likely to succeed?

Most brands are adapted to some extent to reflect significant differences in consumer behavior, brand development, competitive forces, and the legal or political environment. Identify the five international product and communication strategies available to firms that expand their businesses to foreign countries.

Once a company decides to target a particular country, it must determine the best mode of entry. Each of its market entry strategies involves more commitment, risk, control, and profit potential. List these market entry strategies in order from low risk to high risk.

Foreign companies establishing joint ventures in Asia typically team up with four types of local partners. Explain who they are.

When forces for both global integration and national responsiveness prevail to some extent, a "global" strategy that standardizes certain elements and localizes other elements can be the way to go.

A Canadian software company decides to buy majority stakes in a Chinese firm producing software. The company even adds to its Chinese production capacity. Which of the following could be a potential disadvantage of this direct investment?