Exam 13: Entering Foreign Markets

A) capturing first-mover advantages.
B) higher pioneering costs.
C) rapid increase in market share.
D) limited future growth potential.
E) rapid increase in sales volume.

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A) they are quick to execute and help firms to rapidly build their presence in the target foreign market.
B) it is much easier to change the culture of an existing organization than build a new organization.
C) it is easier to convert the operating routines of acquired units than establish routines in new subsidiaries.
D) they give firms access to valuable intangible assets while minimizing a pileup of tangible assets.
E) acquired firms are often undervalued and hence assets can be purchased at minimal prices.

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A) Implement a tariff on their products.
B) Discontinue their exporting efforts.
C) Export only process technology to foreign firms.
D) Develop a licensing deal instead of exporting.
E) Set up a wholly owned subsidiary to handle local marketing.

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A) the foreign firm benefits from a local partner's knowledge of the host country.
B) the foreign firm can protect its technology from being appropriated by its local partner.
C) there is less cause for friction and conflict between the foreign and local partners.
D) it gives a firm tight control over subsidiaries, which enables it to realize experience curve or location economies.
E) the foreign firm does not have to bear any development costs and risks associated with opening a foreign market.

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