Reference no: EM133299917

QUESTION 1

What is a disadvantage of franchising?

A) It forces a franchiser to take out profits from one country to support competitive attacks in another.

B) It is difficult to maintain quality control across foreign franchisees that are distant from the franchiser.

C) The franchiser has to bear development costs and risks associated with foreign expansion.

D) The franchiser has no long-term interests in the foreign country.

E) Franchising leads to undesirable results for service firms.

QUESTION 2

What is a drawback of licensing as a mode of entry into foreign markets?

A) A firm that enters into a licensing deal with a foreign country will have no long-term interest in that country.

B) Licensing does not benefit firms lacking the capital to expand operations overseas.

C) The licensor has to bear all costs and risks associated with developing a foreign market.

D) Licensing deals fail when there are barriers to foreign investment in a particular country.

E) Licensing does not give a firm tight control over manufacturing, marketing, and strategy.

QUESTION 3

What is one disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets?

A) lack of control over technology

B) lack of control over quality

C) inability to engage in global strategic coordination

D) high costs and risks

E) problems with local marketing agents

QUESTION 4

What is one way a wholly owned subsidiary can be established in a foreign market?

A) by exporting

B) by setting up a greenfield venture

C) through a licensing agreement

D) through a turnkey operation with a local partner

E) through franchising

QUESTION 5

When two or more independent firms establish a new firm together, it is an example of

A) an acquisition.

B) licensing.

C) a joint venture.

D) franchising.

E) a wholly owned subsidiary.