29 Questions
What are the three main types of foreign market entry modes discussed in Chapter 7?
Indirect, Direct, and FDI
Which type of market entry mode involves minimal ownership and control of marketing activities?
Exporting
What is a key factor to consider when selecting a foreign entry mode according to the text?
Proximity to domestic customers
In the context of foreign market entry, what does FDI stand for?
Foreign Direct Investment
What aspect plays a crucial role in determining the desired level of control when selecting a foreign market entry mode?
Exposure to risks
What should the decision between indirect exporting and direct exporting be based on?
Company goals and objectives
When considering foreign market entry modes, why might changing from indirect to direct be difficult?
Cultural preferences for working directly with the manufacturer
What does Foreign Direct Investment (FDI) involve?
Investing in a facility or asset in a foreign country
Why might some companies avoid Foreign Direct Investment (FDI) as an entry mode?
Risk associated with FDI
Which factor might lead a company to establish a Joint Venture (JV) or foreign subsidiary in a foreign market?
Requirement for more control/feedback
What factor is emphasized when considering a company's first Foreign Direct Investment (FDI) or Direct Foreign Investment (DFI) experience?
Risk associated with the investment
Why might a company find it difficult to move beyond exporting?
High transportation costs and market barriers
What is one reason for a company to consider FDI?
High import barriers reducing market attractiveness
In what situation might a company consider moving from exclusive contracts to non-exclusive?
Desire for stronger customer support
What could make a product noncompetitive in foreign markets?
International cost escalators
Why might a company prefer domestic production over exporting?
Preference for local production due to cost or quality reasons
What can prevent exporting from being a viable long-term option in some foreign markets?
High transportation costs and local NTBs
What is one of the potential reasons for the decline in foreign market entry?
Increased complacency
In FDI manufacturing, what does the access to local infrastructure primarily include?
Local labor forces
What type of products would justify overseas assembly or full manufacturing due to poor market success from import barriers?
Products with high value relative to the freight costs
What is a key advantage of establishing a foreign sales office with a local director?
Improved local expertise
What is one of the considerations for Overseas Distribution as an FDI option?
Market/cultural perception
How can tariff/nontariff barriers impact the cost of materials in a foreign market?
Make imported materials more expensive than domestic materials
What is an example of a nontariff barrier mentioned in the text?
Imposing quotas on imported goods
What does Third Party Logistics (3PL) allow firms to do in the context of foreign market entry?
Outsource parts of the supply chain
What is the purpose of tariff engineering as discussed in the text?
Change the structure of exports to reduce import duties
Which factor is unlikely to influence a company's decision to pursue Overseas Distribution as an entry mode?
Market size
When might a need for increased control in a foreign market materialize?
As the need arises for more involvement in the market
In the context of reducing the impact of import barriers, what justifies overseas assembly or full manufacturing?
Poor market performance due to import barriers
Test your knowledge on why companies may or may not choose Foreign Direct Investment (FDI) as a mode of foreign market entry. Explore the reasons why companies find it difficult to move beyond exporting and the justifications for moving to FDI.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
