Chapter 7 Multiple Choice Questions | Global Strategic Management by Philippe Lasserre

1. ‘Learning objectives’ can be achieved in countries where:

The market is growing One can gain knowledge about technology or business by being present The market is difficult to access Government gives incentives to set up training centers

2. When is a ‘window of opportunity’ closed?

When governments do not give incentive to investments When the market is low end only When new competitors are entering When competitors have established a strong market presence or pre-empted available resources

3. What are the disadvantages of being the first to enter a market (choose both that apply)?

The market may not be mature enough to accept the product or service Governments may resist entry Facilitating the entry of a follower Being obliged to undertake a joint venture

4. What are the disadvantages of entering a market with a wholly owned subsidiary (choose all three that apply)?

Low speed of entry Political risks are high Technology is not protected Lack of immediate access to highly qualified personnel Loss of control

5. Choosing a partner who wants to diversify is advantageous for a foreign investor (choose both that apply) because:

The partner is likely to have good market knowledge The partner is likely to give operational support The partner is probably not going to interfere in the management of the joint venture The partner can probably facilitate the entry thanks to its contacts

6. What is a ‘real option’ for a foreign direct investment?

A financial instrument to be acquired on the local stock exchange An option given by governments to choose between several investments A small investment to test the potential value of a large investment The contractual clause that exonerates the investor from local taxes during a given period

7. What are the advantages of entering a country using licensing (choose both that apply)?

Low risks Control of technology Quick entry Less complicated to manage

8. Which one of these modes of entry has a high return and a low risk?

Licensing Acquisition Wholly owned subsidiary Joint venture

Chapter 7: Entry Strategies