Sample Questions and Answers
- Which of the following is a primary challenge multinational firms face when expanding internationally?
- A) Identifying new domestic markets
- B) Navigating diverse cultural and regulatory environments
- C) Maintaining a uniform product line
- D) Reducing production costs
- Answer: B
- What is the term for a strategy that combines global efficiency with local responsiveness?
- A) Multidomestic strategy
- B) Transnational strategy
- C) International strategy
- D) Global standardization strategy
- Answer: B
- Which entry mode allows a firm to have full control over its foreign operations?
- A) Joint venture
- B) Licensing
- C) Wholly owned subsidiary
- D) Exporting
- Answer: C
- Which of the following is NOT a factor influencing a firm’s decision to enter a foreign market?
- A) Market size and growth potential
- B) Political stability
- C) Domestic market saturation
- D) Availability of domestic raw materials
- Answer: D
- What is the primary advantage of a multidomestic strategy?
- A) Economies of scale
- B) Ability to customize products to local markets
- C) Centralized decision-making
- D) Standardized marketing campaigns
- Answer: B
- Which of the following is a risk associated with international expansion?
- A) Increased market share
- B) Exposure to foreign exchange fluctuations
- C) Enhanced brand recognition
- D) Access to new technologies
- Answer: B
- Which of the following is a characteristic of a transnational strategy?
- A) High pressure for local responsiveness and low pressure for global integration
- B) Low pressure for local responsiveness and high pressure for global integration
- C) High pressure for both local responsiveness and global integration
- D) Low pressure for both local responsiveness and global integration
- Answer: C
- Which of the following is a potential disadvantage of a joint venture?
- A) Full control over operations
- B) Sharing of resources and risks
- C) Potential conflicts between partners
- D) Quick market entry
- Answer: C
- Which of the following is a key consideration when selecting a foreign market entry mode?
- A) The firm’s domestic market share
- B) The level of control desired over foreign operations
- C) The number of competitors in the domestic market
- D) The firm’s brand recognition in the home country
- Answer: B
- Which of the following is a potential benefit of licensing as an entry mode?
- A) Full control over foreign operations
- B) Rapid market entry with minimal investment
- C) Sharing of profits with local partners
- D) Protection of intellectual property
- Answer: B
- Which of the following is a disadvantage of a wholly owned subsidiary?
- A) Limited control over foreign operations
- B) Sharing of profits with local partners
- C) High investment and risk
- D) Slow market entry
- Answer: C
- Which of the following is a factor that can influence the choice of entry mode in international expansion?
- A) The firm’s domestic market share
- B) The level of control desired over foreign operations
- C) The number of competitors in the domestic market
- D) The firm’s brand recognition in the home country
- Answer: B
- Which of the following is a characteristic of a global standardization strategy?
- A) High pressure for local responsiveness and low pressure for global integration
- B) Low pressure for local responsiveness and high pressure for global integration
- C) High pressure for both local responsiveness and global integration
- D) Low pressure for both local responsiveness and global integration
- Answer: B
- Which of the following is a potential disadvantage of a transnational strategy?
- A) High costs due to complex coordination
- B) Limited ability to customize products
- C) Slow market entry
- D) Low control over foreign operations
- Answer: A
- Which of the following is a key consideration when selecting a foreign market entry mode?
- A) The firm’s domestic market share
- B) The level of control desired over foreign operations
- C) The number of competitors in the domestic market
- D) The firm’s brand recognition in the home country
- Answer: B
- Which of the following is a potential benefit of a joint venture?
- A) Full control over operations
- B) Sharing of resources and risks
- C) Quick market entry
- D) Protection of intellectual property
- Answer: B
- Which of the following is a risk associated with international expansion?
- A) Increased market share
- B) Exposure to foreign exchange fluctuations
- C) Enhanced brand recognition
- D) Access to new technologies
- Answer: B
- Which of the following is a characteristic of a multidomestic strategy?
- A) High pressure for local responsiveness and low pressure for global integration
- B) Low pressure for local responsiveness and high pressure for global integration
- C) High pressure for both local responsiveness and global integration
- D) Low pressure for both local responsiveness and global integration
- Answer: A
- Which of the following is a potential disadvantage of licensing as an entry mode?
- A) Full control over foreign operations
- B) Rapid market entry with minimal investment
- C) Sharing of profits with local partners
- D) Protection of intellectual property
- Answer: C
- Which of the following is a potential benefit of a wholly owned subsidiary?
- A) Limited control over foreign operations
- B) Sharing of profits with local partners
- C) High investment and risk
- D) Full control over operations
- Answer: D
- Which of the following is a characteristic of a transnational strategy?
- A) High pressure for local responsiveness and low pressure for global integration
- B) Low pressure for local responsiveness and high pressure for global integration
- C) High pressure for both local responsiveness and global integration
- D) Low pressure for both local responsiveness and global integration
- Answer: C
- Which of the following is a potential disadvantage of a joint venture?
- A) Full control over operations
- B) Sharing of resources and risks
- C) Potential conflicts between partners
- D) Quick market entry
- Answer: C
- What does the term “glocalization” refer to in the context of international business?
- A) The integration of global and local strategies
- B) The standardization of global products for local markets
- C) The decision to only focus on domestic markets
- D) The outsourcing of operations to foreign markets
- Answer: A
- Which of the following is a key factor that multinational corporations must consider when selecting a market for international expansion?
- A) Similarity of the local culture to the home country
- B) The availability of local natural resources
- C) The economic stability and growth prospects of the country
- D) The company’s market share in its home country
- Answer: C
- Which of the following is a common challenge in managing international alliances?
- A) Lack of competition
- B) Differences in organizational culture and values
- C) Too much control over the foreign market
- D) Excessive legal regulation
- Answer: B
- In which market entry mode do firms have the least control over foreign operations?
- A) Exporting
- B) Joint ventures
- C) Licensing
- D) Wholly owned subsidiary
- Answer: A
- Which of the following is a primary advantage of a transnational strategy?
- A) High control over foreign markets
- B) Ability to balance local responsiveness and global efficiency
- C) Simplicity in operations and decision-making
- D) Uniform marketing and product strategy
- Answer: B
- Which of the following is a major reason multinational companies prefer to enter developed markets rather than emerging markets?
- A) Greater regulatory flexibility
- B) Higher purchasing power and less political risk
- C) Lower operational costs
- D) More opportunities for innovation
- Answer: B
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