Which of the following statements regarding institutional frameworks and foreign entry strategies is correct?

All of the above statements is correct

Which statement about the Internationalization process model is correct?

High involvement in a another counties depend on the experiential knowlegde

Which statement about joint ventures (JVs) is not correct?

50-50 ownership arrangements are strongly discouraged

The objectives in the Entry strategy puzzle are NOT mutually exclusive? (the firm can have more than one objective)

True (the firm can have many objectives)

Collusion between firms is more likely if

There is an industry price leader

Name the Entry Strategy Puzzle

Objectives – Location – Timing – Entry Mode

Market commonality and resource similarity are used when?

Defining a firm’s competitors

Licensing is a form of contract that

Establishes a long-term supplier relationship - networking i. model)

A firm selling products or services to anot

An example of institutional advantages (location/where in the Entry strategy puzzle)

The very efficient systems for conducting business in Norway

Which of the following practices is not penalized by the European Union as a competition authority?

Entering another EU country without agreement of national authorities

What is Efficiency enhancing in the Objectives (why) in the entry strategy puzzle?

Expand both customer base and be more efficient

Which of the following is not an advantage of greenfield investments?

Helps the firm gain fast new capabilities

AMC framework: A firms amount of resources will most likely increase the firms…

Capability to attack / counter attack

To take advantage of already made investments focusing on creating the best

The internationalization of born global firms relies on

An entrepreneurial team with international experience

Considering the AMC framework, when is a firm’s motivation to respond to an attack higher?

A firm’s dominant market position is being challenged

Which of the following does NOT apply in the case of franchising?

Well suited to transfer tactic knowledge

The key components of the entry strategy are

Objectives (why), location (where), timing (when) choice of entry mode(how)

Which of the following industry characteristics reduce the likelihood of collusion between firms?

Firms competing with slightly differentiated products

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Questions 85

Answers

1
A joint venture is established by two or more parent firms.
True
False
2
WOS (Wholly-owned subsidiaries) are:
Full acquisition of a company (also correct)
Partial acquisition
Greenfield
JV
3
Which of the following statements regarding institutional frameworks and foreign entry strategies is correct?
All of the above statements is correct
Regulatory institutions may prohibit types of operations or transactions
Institutional differenc may increase the need for acquiring local knowledge
None of the above statements are correct
4
Which statement about the Internationalization process model is correct?
The model was inspired by a study of USA
Firms accelerate their internationalization by acquiring firms in foreign c
High involvement in a another counties depend on the experiential knowlegde
The model mainly applies to mature multinational enterprises
5
First-mover advantages are only of concern in branded consumer goods industries
False
True
6
Which statement about joint ventures (JVs) is not correct?
It allows foreign investors to share costs and risks with a local partner
A JV does not normally involve integrating in existing operation
A foreign investor could establish a JVs in form of a minority
50-50 ownership arrangements are strongly discouraged
7
What is a subsidiary?
Egenkapital
Datterselskab
8
What is Natural Seeking in the Objectives (why) in the entry strategy puzzle?
Expand both customer base and be more efficient
Expanding its technology
Expand its resource base
Expand its customer base
9
Non-equity entry modes include licensing, management contracts, and exporting.
False
True
10
What is Marketing Seeking in the Objectives (why) in the entry strategy puzzle?
Expand both customer base and be more efficient
Expand its technology
Expand its customer base
Expanding its resource base
11
What is tactic collusion?
write
yourself
12
The objectives in the Entry strategy puzzle are NOT mutually exclusive? (the firm can have more than one objective)
True (the firm can have many objectives)
False (the firm can only have one objective)
13
What are the 4 non-equity entry modes? (write answer - answer on next slide)
on paper
write
14
Disadvantage: politically sensitive + high up-front capital + integration challenges
Full acquisition
Partial acquisition
Greenfield
JV
15
Collusion between firms is more likely if
Products are more heterogeneous
There is an industry price leader
There are many firms in the market
Barriers to entry are low
16
When one company buys some of another company?
Joint venture
Full acquisition
Partial acquisition
Greenfield
17
Disadvantages: Limited control + Integration issues
Full acquisition
JV
Greenfield
Partial acquisition
18
Name the Entry Strategy Puzzle
Objectives – Location – Capital – Entry Mode
Contracting – Licensing – Equity – Entry Mode
Subsidiary – Location – Equity – Timing
Objectives – Location – Timing – Entry Mode
19
Market commonality and resource similarity are used when?
Defining a firm’s potential costumer base
Deciding if a country should impose tariffs or import quotas
Defining a firm’s competitors
Deciding if a firm should engage in FDI or exporting
20
Upsala: firms take decisions over their next step based on what they know at the time
False
True
21
Prisoner’s dilemma is a concept from game theory that helps explaining while cartels often break down
True
False
22
When one company buys another company?
Greenfield
Partial acquisition
Joint venture
Full acquisition
23
What is the Preferred mode when competencies need to be build fast!
Partial acquisition
Full acquisition
Greenfield
JV
24
Licensing is a form of contract that
Transfers a technology and the right to use it
Transfers the rights to a brand namea. Combines all the above transactions
Combines all the above transactions
Establishes a long-term supplier relationship - networking i. model)
25
An exporting firm is
A firm buying goods or services from another country
A firm selling products or services to anot
A firm that performs an important “middelman”
An intermediary receiving commissions for sales
26
What are the 4 equity based entry modes? (write answer - answer on next slide)
write
on paper
27
Which is NOT a first mover advantage?
Setting up entry barriers
Technological leadership
Access to scare resources
Flexibility to market changes
28
An example of institutional advantages (location/where in the Entry strategy puzzle)
The very efficient systems for conducting business in Norway
Oli in UE
Japanese Uniqlo in Europe
Fashion businesses in Paris, NYC, Milan etc.
29
Which of the following practices is not penalized by the European Union as a competition authority?
Anti-competitive practices by a dominant player in a market
Fixing prices
Entering another EU country without agreement of national authorities
Agreements between two companies not to compete in each other’s home market
30
When a company begins new operation from scratch
Joint venture
Partial acquisition
Greenfield
Full acquisition
31
What is Efficiency enhancing in the Objectives (why) in the entry strategy puzzle?
Expand both customer base and be more efficient
Expand its costumer base
Expanding its resource base
Expand its technology
32
An example of resource endowments (Location/where in the Entry strategy puzzle)
Digitalization in DK (the possibility to register a new business in a day)
Wind in Denmark
Medical firms in Switzerland
Tesla in Scandinavia
33
Firms with low market commonalities and resource similarities are NOT considered competitors?
False
True
34
Advantages: Operations can be scaled up + Full control and protection + Parent can build the kind of subsidiary it wants
Greenfield
JV
Partial acquisition
Full acquisition
35
Ad: Access partner’s knowledge, assets and local connections + Shared costs and risks + Politically acceptable
Partial acquisition
Greenfield
JV
Full acquisition
36
Adv: Access operations from previous owner while limiting capital commitment + Ensure previous owner continued comitment
Full acquisition
JV
Partial acquisition
Greenfield
37
Which of the following is not an advantage of greenfield investments?
Helps the firm gain fast new capabilities
Allows the transfer of work practices and complex knowledge
Flexibility - it allows the firm to start with a smaller investment
Gives complete management control
38
Institutional distance is how similar the regulatory, normative and cognitive institutions of two countreis?
False
True
39
AMC framework: A firms amount of resources will most likely increase the firms…
Capability to attack / counter attack
Motivation to attack
Awareness of its rivals
40
What is free ride?
To enjoy the resolution of technology and market uncertainty
To take advantage of already made investments focusing on creating the best
To be flexible to market changes
To use proprietary technology to establish technological leadership
41
Oligopoly:a market that is dominated by a single supplier that is able to determine the price
True
False
42
A distributor is a trade intermediary trading on its own account?
False
True
43
What is a SOE?
Small observatory establishments
State owned establishments
State owned enterprises
Small oligopoly enterprises
44
Which of the following is not a motive for establishing FDIs?
Finance seeking
Efficiency seeking
Market seeking
Resource seeking
45
The internationalization of born global firms relies on
Acquiring resources in the home country
Expanding first in culturally distant markets to learn fast
An entrepreneurial team with international experience
Gradual accumulation of experiential knowledge
46
Considering the AMC framework, when is a firm’s motivation to respond to an attack higher?
When the firm is part of a price fixing cartel
A firm’s dominant market position is being challenged
The firm has high resource and market similarity with the firm doing attack
The firm has abundant financial resources
47
Which of the following does NOT apply in the case of franchising?
It is hard for a the franchisor to control how the brand name are used
Typically involves entire business concepts
Makes it possible to expand in foreign market with little capital income
Well suited to transfer tactic knowledge
48
The key components of the entry strategy are
Objectives (why), location (where), timing (when) choice of entry mode(how)
Business function (what), location (where), time (when), entry mode(how)
Location(where),time(when),size of investment(how much), managing team(who)
Objectives(why),location(where), size(how much), marketing strategy(how)
49
Which of the following industry characteristics reduce the likelihood of collusion between firms?
Competing with the same rivals in multiple markets
Existence of a price leader with the capacity to punish firms for lo prices
Firms competing with slightly differentiated products
Few firms having a high percentage of the total industry sales
50
Firms from emerging markets without ownership (firm specific advantage) should not engage in FDIs
False
True
51
An example of Market advantages (Location/where in the Entry strategy puzzle):
IT companies in Silicon Valley
Starbucks in Denmark
Corruption-free society, and transparency in Luxenbourg
Gold in Africa
52
What is the preferred mode when the goal is to gain access to assets/marketse, while limiting capital commitment
Full acquisition
Greenfield
Partial acquisition
JV
53
High investment risk due to large capital commitment and long pay-back periods, yet no co-owner and integration risks
Greenfield
Joint venture
Partial acquisition
Full acquisition
54
quote “if you know the enemy and know yourself, your victory with stand in now doubt” points to the importance of
Competitor analysis and resource analysis
Analysis of institutions and resources
Analysis of political parties against and for capitalism
Analysis of suppliers and customers
55
When two or more companies put in equity?
JFull acquisition
Greenfield or wholly owned subsidy
Joint venture
Partial acquisition
56
What is the AMC framework?
A = awareness M = motivation C = capability
A = agglomeration M = market endowments C = capital
A = accumulation M = multinationalism C = competition
57
AMC framework: If a firms market dominant position is being challenged it increases the firms…
Motivation to attack
Awareness of its rivals
Capability to attack / counter attack
58
Competitors are likely to strongly launch a counter-attack if
They are aware of the original attack
All the three conditions are present at the same time
They have the capabilities to launch a successful counterattack.
They are motivated to counterattack
59
Small and medium enterprises face which challenges in terms of internalization?
Local policies discriminating against SMEs
Benefit of internationalization are limited for smaller firms
Slow to detect business opportunities abroad
Limited financial resources
60
Disadvantage: Divergent goals and interests + Limited control over operations + Difficult to coordinate globally
Greenfield
Fully acquisition
Partial acquisition
JV
61
What is a subsidiary?
Erhverve
Datterselskab
Egenkapita
62
Entrymode: the goal is to gain access to assets/markets that otherwise would not be accesible, while limiting capital co
Partial acquisition
JV
Full acquisition
Greenfield
63
The location decision of foreign entry decision is driven by costs of production at the site
True
False
64
AMC framework: Market commonality and resource similarity increase the firms…
Awareness of its rivals
Capability to attack / counter attack
Motivation to attack
65
What are the 4 equity based entry modes? (answer)
Grenfield
Full
Partial acqusition
JV
66
foreign investor can create a local operation in its own image without the need to incorporate existing structures
Full acquisation
Greenfield
Partial acquisation
JV
67
A distributor is a trade intermediary trading on its own account
False
True
68
Disadvantage: slower to establish (everything has to be build from scratch) + adds new capacity to the industry
Partial acquisition
Greenfield
JV
Fully acquisition
69
What does the AMC framework has to do with?
Instruments of trade
Competition and attacks
Entering a new foreign market
70
In which of the situations below, a firm can be accused of dumping?
When a firm agrees with its competitors to not compete based on price
When a firm agrees to not sell its product in another firm’s home market
local firm sets the prices below cost in an attempt to monopolize a market
foreignfirm sells belowcosts planningto raise priceswhen localrivals areout
71
Disadvantage: Divergent goals and interests + Limited control over operations + Difficult to coordinate globally
Partial acquisition
Greenfield
JV
Fully acquisition
72
The EU framework for FDI screening is a…
National institution
Supernational institution
73
Second movers face greater technology and market uncertainties
True
False
74
Frenching is a form of contract that
Transfers the rights to a brand name
Combines all the above transactions
Transfers a technology and the right to use it
Establishes a long-term supplier relationship (networking internati. model)
75
Price cuts, advertising campaigns, new market entry and new product introductions are examples of
d
write yourself
76
“Born global are firms that operate in every country of the world?
False
True
77
Adv: Fast entry + Full control + Protection of technology and know-how + Do not add capacity to the industry
Partial acquisition
Greenfield
Full acquisition
JV
78
What is predatory pricing?
1intending to raise prices to cover the losses after eliminating the rivals
2 planning to raise prices after it has eliminated local competitors
#1 setting prices below cost and...
#2 An exporter selling below cost abroad and planning...
79
What is Capability enhancing in the Objectives (why) in the entry strategy puzzle?
Expand both customer base and be more efficient
Expand its technology
Expanding its resource base
Expand its customer base
80
An example of agglomeration (location/where in the Entry strategy puzzle)
Wood in Amazonas
Low tax for enterprises in Switzerland
Tiger/Søstrene Grene in Europe
Clothing manufactories in China
81
What does tangible mean?
Something that has similarity in its efficient operation
Something that cant be touched
Something that can be touched
Something that is a limited number of
82
Indian Tata and Chinese Geely acquiring European brands and technology are ‘capability enhancing FDI’
False
True
83
What is dumping?
#1 setting prices below cost and...
2 planning to raise prices after it has eliminated local competitors
1intending to raise prices to cover the losses after eliminating the rivals
#2 An exporter selling below cost abroad and planning...
84
Which form of start-up capital is best for new innovative firm that pursue an agressive internationalization strategy
Goverment subsidies
Bank loans
Owners and family funding
Venture Capital
85
What are the 4 non-equity entry modes? (write answer)
Subcontracting
Francising
Licensing
Exporting

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