Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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Which of the following would be considered a mode of indirect exporting?
a. | Joint ventures | b. | Acquisition | c. | Assembly | d. | Management contracts | e. | Piggybacking |
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2.
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Which of the following is not a form of direct exporting?
a. | Distributors | b. | Agents | c. | Trading
companies | d. | Franchising | e. | Management
contracts |
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3.
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Countertrade is where ______
a. | sales into one market are paid for by taking other products from that market in
exchange. | b. | all transactions are conducted in the open, as in ‘over the
counter’. | c. | transactions are carried out through intermediaries. | d. | goods are traded
between three different countries at the same time. | e. | exports are paid for and collected within the
country of origin by the importer. |
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4.
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Distributors do not ____________
a. | expect a high percentage return on products that they trade. | b. | organise both
selling and distribution. | c. | usually seek exclusive rights for a specific
sales territory. | d. | take the market risk on unsold product. | e. | Distributors do all
of the above. |
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5.
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Which of the following is not a benefit for licensees’ from a licensing
agreement?
a. | A relatively low outlay. | b. | The ability to capitalise on existing
know-how. | c. | Limited risk. | d. | Initial start-up funding from the
licenser. | e. | No market development costs. |
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6.
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Drafting agreement carefully to include duration, royalties, trade secrets,
quality control and performance measures, limiting the product and territorial coverage and
retaining patents, trademarks, copyrights are all ways of minimising the potential problems
of;
a. | franchising | b. | contract manufacture | c. | partnerships | d. | licensing | e. | joint
ventures |
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7.
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Which is likely to be the most expensive method of market entry?
a. | Franchising | b. | Licensing | c. | Opening a foreign
subsidiary | d. | Direct marketing | e. | Direct
exporting |
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8.
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The market entry method that could give rise to a potential for inheriting a
demotivated labour force, a poor image and reputation and out of date products and processes;
a. | Merger | b. | Acquisition | c. | Licensing | d. | Franchising | e. | Setting up a wholly
owned subsidiary |
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9.
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Acquisition by a large international firm is often associated with;
a. | Rapidly increasing profitability | b. | Job losses | c. | A stimulation of the
order book | d. | Restructuring | e. | Job creation |
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10.
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Which of the following statements about companies that export is not
true?
a. | Companies that export have a higher rate of taxation than those that do
not. | b. | Companies that export grow faster than those that do not export. | c. | Companies that
export are more productive than those that do not export. | d. | Companies that
export have employees that tend to earn more. |
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