Question

Q2: underline the correct answer

A. Reaching markets either yourself or with the use of an intermediary located in the foreign market. +more profit, greater control, able to leverage experience curve effects. -requires more expertise, management time and financial resources.

1- Indirect Exporting 2- Market Re-entry 3- Direct exporting 4-Direct export options

B. Operations fully owned by a foreign parent firm ( may involve marketing, assembly, or full-scale integrated production operations) + free hand to establish the strategy for the subsidiary, keep all profits, easily integrated into a global market. - local management at these subsidiaries often become involved in activities such as stealing cash, equip, inventory...

1- Wholly Owned Subsidiaries 2- Export Management Company 3-. Assembly 4- Pros of Acquisitions

C. Firms may shift production to foreign markets to gain market position, defend a market position, save on export costs and reduce currency risk as costs and revenues are in the same currency.

1- Local Manufacturing 2- Foreign Production 3- Direct Exporting 4-Indirect Exporting

D. Understand customer need, market size, capitalization, market structure. Evaluate and select an entry option. Search for partner, distributor, agent Managing the partner, distributor, agent

1- Advantages of licensing 2- Independent distributor 3- Full-scale integrated production 4- Understand the market entry process

E. A market-entry strategy involving foreign direct investment for the purpose of establishing 100 percent control of a business

1- Joint Venture 2- Greenfield Investment 3- Equity Stake 4- Full Ownership

F. A contractual market-entry strategy whereby one company makes an asset available to another company in exchange for royalties or some other form of compensation.

1-Contract Manufacturing 2-Licensing 3- Franchising 4- Exporting

Answer 1

A: Direct Exporting: directly selling in the foreign market or through intermediaries. It involves greater control and more profits but greater expertise and management

B: Wholly owned subsidiaries: Foreign company owns all the stock of subsidiary

C: Foreign Production: When a firm shifts to another country to set up production line

D:understand Market Entry process

E:Full ownership: Firm owns 100 percent control of a business

F: Franchising: franchisor makes available some of it's assets to franchisee in return of a compensation