IB Pop Quiz

All of the following are African free-trade agreements EXCEPT

The African Union

Which African economic initiative includes 16 West African members that promote regional economic cooperation?

ECOWAS

Before the U.S. pulled out of the agreement, which country has notably been left out of the Trans-Pacific Partnership?

China

All of the following are Asia-Pacific Trade Blocs EXCEPT

MERCOSUR

To which African economic organization does South Africa belong?

Southern African Development Community

Which of the following is NOT an organization that governs the EU?

The World Trade Organization

Once the euro was created, participating members increased control over their own domestic money supplies and, sometimes, fiscal policy.

False

The _______ requires ______ members to limit their annual government deficits to no more than 3% of GDP.

Stability and Growth Pact; Eurozone

All of the following are disadvantages of joining the Eurozone EXCEPT

Exchange-rate risks are lower for companies inside the Eurozone

Which of the following was an exception to the most-favored-nation status under the GATT?

Trade agreements promoting economic integration

Before the WTO was created, ____ governed international trade.

the General Agreement on Tariffs and Trade

Under the GATT, if the U.S. lowered its tariffs to Country X, a developing country, but required the normal tariff for all other countries, the U.S. was most likely using the ________.

generalized system of preferences

What countries were granted the most-favored-nation status under the GATT?

GATT member countries

The highest level of economic integration is

political union

Level of economic integration are (from high to low)

Political Union/Full Integration Economic Union Common Market Customs Union Free Trade Area*

In a(n) ________ members eliminate internal trade barriers, adopt a common external policy toward nonmembers, eliminate barriers to the movement of the factors of production, and coordinate economic policies.

economic union

Which of the following has the lowest level of economic integration?

Free Trade Area*

Which two countries form the political and geostrategic core of MERCOSUR?

Argentina and Brazil

Which country is NOT a MERCOSUR member?

Ecuador & Chile

Which country has benefited most from NAFTA?

Mexico

After NAFTA was signed, bilateral trade in goods between Mexico and the U.S. increased, while bilateral trade in services between the two countries remained mostly flat.

True

A Canadian company is examining the relative wages, land-acquisition costs, and access to R&D facilities before deciding to enter a new foreign market. This means that _____ is/are particularly important to the company’s choice of a mode of entry.

location advantages

________ advantages are advantages that make it desirable for a firm to produce a good/service itself rather than contract out to another firm to produce it.

Internalization

_______ are those that pull a firm into foreign markets as a result of opportunities available there.

Proactive motivations

When British Petroleum ships crude oil from its storage facilities in Kuwait to its Australian subsidiary, ________ has occurred.

an intracorporate transfer

The more productive and efficient a firm is, the more likely it is to self-select into exporting; however, once a firm starts exporting, it earns lower profits and becomes less efficient than firms that do not export.

False

________ is the most common form of international business activity.

Exporting

According to the UNCTAD World Investment report, the majority of greenfield FDI projects are in the ____ sector.

services

Suppose Tesla, a U.S. car manufacturer, buys a production facility in Vietnam. Which term best describes Tesla’s activities?

acquisition strategy

Which of the following is/are characteristic/s of international franchises?

All of these: They use established products and systems They often have some flexibility to meet local tastes They are relatively low-cost and low-risk

Burger King has established a franchise agreement with an individual in Tokyo. Burger King will most likely provide the Japanese franchisee with all of the following EXCEPT ________.

financial capital

Carmichael Candies, a U.S. firm, is considering the idea of entering the EU market through an international franchising agreement. What is the MAIN advantage to Carmichael if the firm chooses this entry method?

avoidance of tariffs

Licensing tends to work well in markets where intellectual property protection is lax.

False

Mattel manufactures Barbie dolls. Mattel provides specifications of the dolls’ size to accessories manufacturers, who make clothes, shoes, and jewelry for the dolls. The accessories maker pays a fee to Mattel to manufacture those items. What mode of entry is described in this example?

licensing

Which mode of market entry is NOT recommended in countries with weak intellectual property laws and/or lax enforcement of those laws?

licensing

All of the following are steps in assessing alternative foreign markets EXCEPT

Analyze CEO preferences

To evaluate market potential, you would use data on all of the following EXCEPT

government elections

_______ can be used to determine overall potential growth and future business opportunities in a market.

Demographic data

Suppose Pentax develops a new photo editing software and negotiates agreements with a Vietnamese manufacturer to assemble most Pentax cameras. Which entry mode for international business is Pentax utilizing?

contract manufacturing

All of the following are advantages of contract manufacturing EXCEPT

loss of control

Marriott International Inc., provides a small hotel in Bordeaux, France, with assistance and reservation services for an agreed period of time and price. Marriott and the hotel have a

management contract

Executives at Bantam Bicycles realize that the firm lacks the necessary internal resources to compete internationally. Which of the following would most likely enable Bantam to compete in the global market?

strategic alliance

Boeing collaborated in a strategic alliance with Fuji, Mitsubishi, and Kawasaki in the development and production of the Boeing 777 to minimize Boeing’s financial exposure. What benefit of strategic alliances was Boeing seeking?

shared risk

Boeing collaborated in a strategic alliance with Siemens in the development and production of energy solutions for the U.S. military to take advantage of Siemens’ technology. What benefit of strategic alliances was Boeing most likely seeking?

shared knowledge

When two or more firms integrate different operating procedures to bring goods and/or services to the market, a _____ alliance has been formed.

comprehensive

A(n) _____ alliance occurs when partners share the expenses of bringing a good or service to the market.

financial

When two or more firms integrate different operating procedures along the chain of development and production to bring goods and/or services to the market, a _____ alliance has been formed.

comprehensive

Suppose pharmaceutical companies Roche and Pfizer create a joint venture that fully integrates all efforts necessary to compete against rival GlaxoSmithKline in the Chinese pharmaceutical market. This is an example of a(n) _______ alliance.

comprehensive

A joint venture is a new business entity that is legally separate and distinct from its parent companies.

True

General Mills and Nestlé created a joint venture that fully integrated all the efforts necessary to compete against Kellogg in the European cereal market. This is an example of a(n) ________ alliance.

comprehensive

The Japanese company Bandai and the U.S. toymaker Mattel entered into a strategic alliance. Bandai agreed to distribute Mattel products like Barbie dolls in Japan while Mattel agreed to distribute Power Rangers in Latin America. What type of alliance is this?

marketing

In a(n) ______ arrangement, one partner in a JV assumes primary responsibility for running it.

assigned

There are three approaches to managing a JV:

1) Founding firms share management jointly

2) One founder takes primary responsibility

3) An independent team manages the JV

Which approach is most often preferred, and why?

3, because the independent team is focused on the success of the JV rather than its parents

A public/private joint venture works best in countries with high levels of political instability.

false

Most joint ventures take the form of a corporation because corporations

offer a beneficial tax structure

Which of the following is NOT a potential advantage of a strategic alliance?

possible loss of autonomy

What is the main reason that strategic alliances fail?

partner incompatibility

Which of the following is an example of an alliance that failed due to partner incompatibility?

Peugeot/GM

To assess the relative safeness of an alliance, companies should analyze all of the following EXCEPT

The alliance’s learning potential

When two or more firms manufacture products or provide services in shared or common facilities, this is known as a

Production alliance

Micron Technology, Intel, Samsung, Hyundai, and Siemens have formed an alliance to develop the next generation of DRAM chips. This an example of what type of alliance?

research and development

The extent of product customization varies according to all the following factors EXCEPT

Generic brands

The extent of product customization varies according to all the following factors

Economic factors Legal Forces Target customers cultural influences

Which of the following products is LEAST likely to be customized?

bulldozer

The extent of product customization varies according to all the following factors EXCEPT

target governments

Which of the following is NOT a cultural influence on products?

price

Cultural influence on products:

ingredients language packaging

Which of the following products is most likely to be customized?

soap

Coca-Cola’s advertising strategy has been an international success because

It mixes global brand recognition with an understanding of local markets

Which of the following comprises specialized marketing efforts such as coupons, in-store promotions, sampling, direct-mail campaigns, cooperative advertising, and trade fair attendance?

sales promotion

Which category of promotion allows close contact with the customer but is expensive and reaches customers only within a small region?

personal selling

According to the Chapter 16-17 lecture, promotion encompasses all of the following components EXCEPT

group selling

According to the Chapter 16-17 lecture, promotion encompasses all of the following components

Advertising Public relations Sales promotion

Proctor & Gamble is entering a new market and determines that the country has a high illiteracy rate. Given this information, which medium should P&G avoid using for its advertising campaign?

newspapers

All of the following are international distribution strategies EXCEPT

Foreign-country methods

All of the following are international distribution strategies

Home-country methods Joint ventures Local-market systems foreign distributor

The distribution channel of the shortest length is

Direct sales

The process of getting products and/or services from firms to consumers is known as

Distribution

The distribution channel with the longest length is

sell to wholesaler

According to the Chapter 16-17 lecture, all of the following are international distribution strategies EXCEPT

domestic distributor

All of the following are management considerations specific to international service operations EXCEPT

price planning

Services have all of the following characteristics EXCEPT

They don’t have associated products

Services have all of the following characteristics

They have associated products They are nonstorable They are intangible They require customer participation

Services differ from goods because they

are intangible

The role of government in international services trade may include all of the following EXCEPT

requiring services to be intangible and nonstorable

All of the following are characteristics of international services EXCEPT

They don’t require customer participation

Which of the following is an example of an economic union?

EU

Which of the following is a disadvantage of economic integration?

increased competition may hurt less competitive local firms

Which Asia-Pacific trade bloc is known as one of the world’s most successful free-trade agreements?

Australia-New Zealand Closer Economic Relations Trade Agreement

All of the following are African economic initiatives EXCEPT

African Union

Which of the following explains the difference between reactive and proactive motivations for exporting?

Reactive motivations stem from decreased opportunities in a market, whereas proactive motivations stem from opportunities available in a market

According to the Chapter 12 lecture, when assessing a country’s economic market potential, examine all of the following EXCEPT

laws and regulations

Bechtel International Inc., designs, constructs, and equips a large resort in Bordeaux, France, for Marriott International Inc. This is a

turnkey project

A Canadian company is examining the costs of negotiating, monitoring, and enforcing the provisions of a production agreement with a company in a new foreign market. This means that _____ is/are particularly important to the company’s choice of a mode of entry.

internalization advantages

Suppose that Company X’s restaurant has been successful in the United States. Company X wants to enter the German market without significant commitment of financial and managerial resources. Along with reduced costs and risks, Company X wants to receive a fee for the use of its trademark and operating systems. Based on this information, Company X should entry Germany via

International franchising

Comtex, a U.S. clock manufacturer, recently built a new production facility in Bangladesh. Which term best describes the activities of Comtex?

greenfield strategy

A special form of joint venture that involves a partnership between a privately owned firm and a government is known as a(n)

public-private venture

A Japanese computer manufacturer sells laptops to American retailer Best Buy. The manufacturer has engaged in

direct exporting

A Canadian company is examining the costs of negotiating, monitoring, and enforcing the provisions of a production agreement with a company in a new foreign market. This means that _____ is/are particularly important to the company’s choice of a mode of entry.

internalization advantages

The country that has reaped the most economic benefits from NAFTA membership is

Mexico

Which of the following is a disadvantage of economic integration?

increased competition may hurt less competitive local firms

There is _____ correlation between increasing GATT/WTO membership and increasing international trade flows.

a positive

Which of the following was created in 1993?

The euro

Which of the following is NOT an organization that governs the EU?

The European Court of Human Rights options: The Council of the European Union The European Parliament The European Court of Human Rights The European Council

Which of the following is a trading bloc in the Asia-Pacific region?

MERCOSUR

The Pacific Alliance has removed tariffs on _____ of members’ merchandise trade.

90%

All of the following would be considered services (as opposed to goods) EXCEPT

food

Which of the following is/are management consideration/s specific to international service operations?

location planning capacity planning operations scheduling **all of these

Gator, Inc., produces painted, life-size bronze alligators. These alligators have recently become very popular in the U.K. If the company prioritizes cost minimization, it will choose _______. If it prioritizes the minimization of the order cycle time, it will choose ________.

ship distribution; airplane distribution

Which distribution channel is the longest?

sell to wholesalers

The success of Coke’s international advertising strategy is due mostly to

its ability to create ads that resonate globally and locally at the same time

According to the Chapter 16-17 lecture, the extent of product customization varies according to all the following factors EXCEPT

brand names

Call centers are an example of

business process outsourcing

Suppose your company is trying to determine which markets will provide it with the best opportunities for future potential growth. Data on _______ is most likely to provide that information.

demographic trends

Suppose that KIA, a South Korean auto company, opens a new manufacturing plant in Florida. This is an example of ______.

greenfield investment

Which of the following is true about firms that export?

Exporters earn higher profits than non-exporters