Chapter 11 – Starting International Business

“Born globals” are firms that sell in every country of the world.
1. True
2. False
A ‘letter of credit’ is a form of export credit risk insurance policy.
1. True
2. False
Turnkey projects are common in the civil engineering and construction industries.
1. True
2. False
“Uppsala” was a famous Swedish company that became the role model for many successful Swedish firms engaging in international business.
1. True
2. False
A distributor is a trade intermediary trading on its own account.
1. True
2. False
A hotel serving visitors from abroad is engaging in a form of international business.
1. True
2. False
Licensing is a form of contract that ...
1. transfers the rights to a brand name
2. transfers a technology and the rights to use it
3. establishes a long-term supplier relationship
4. combines all of the above transactions
When companies form a consortium to ‘bid for a tender’, they are
1. colluding to restrict competition
2. engaging in a risky investment strategy
3. competing for a contract offered by for example a government agency
4. hedging the exchange rate risks
A build-operate-transfer for an infrastructure project such as a bridge contract involves
1. The construction of the bridge
2. The operation of the bridge as a for-profit venture, e.g. by collecting road toll
3. The ownership-transfer for the bridge at some specified point in the future
4. All of the above activities
5. None of the above activities
Which of the following activities does not constitute an international business activity:
1. A university educating fee-paying students normally resident abroad
2. A hospital offering specialized medical treatment to customers from anywhere on the world
3. A tour operator to offer foreign language guided tours advertised on the internet
4. All of the above activities
5. None of the above activities
Big hotels carrying international brand names are often not actually owned by the companies whose logo they display. This is because
1. They are franchise operations
2. The real estate is owned by a local company, who has a management contract with the hotel chain company
3. A local company holds the master franchise rights to the name in that territory
4. All of the above are common arrangements in the hotel industry
5. None of the above is a normal arrangement in the hotel industry
Which statement about the Internationalization process model, also known as Uppsala model, is correct?
1. The model suggests Companies have to go through certain specified stages when developing their international business operations
2. Commitments to higher degrees of involvement in a foreign market depend on the knowledge acquired by the firm up to that time
3. The model was inspired by a study of USA companies expanding first to Canada, and then to countries further afield
4. The model mainly applies to mature multinational enterprises

Chapter 11 – Starting International Business

Quiz