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Exam 10: International Entry Strategies

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Question 31

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The option of being a first mover is not entirely under the firm's control.

A) True
B) False

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Question 32

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A letter of credit is a contract between an importer and a bank that transfers liability for paying the exporter from the importer to the importer's bank.

A) True
B) False

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Question 33

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Depending on the extent of these subsidies and other taxes, the statutory corporate tax rate may differ substantially from the effective corporate tax rate because the latter is adjusted to include tax-related incentives such as investment tax credits, tax breaks, and accelerated depreciation.

Overall, differences in culture between the home and host countries can become other triggers of uncertainty.

____________ is a term of price in which the seller covers cost of the goods, insurance, and all transportation and miscellaneous charges to the named foreign port in the country of final destination.

For site selection, MNEs need to calculate the convenience and costs of the various transportation channels (air, sea, railway, and highway) from the candidate site to destinations of major local and foreign customers.

Early movers often pay lower costs in learning and adapting to local environments and in countervailing imitation.

_____________is a foreign entity in a host country in which it is not incorporated but exists as an office of extension of the parent.

__________ is a term of price in which the seller covers all costs and risks up to the side of the ship in a designated shipment (export) port. The buyer bears all costs and risks thereafter.

Market size and growth factors are components of demand factors. How they can be determined?

An import management company (ICM) is an intermediatary that acts as its clients' export department.

Foreign production is less likely to occur when production costs are lower abroad than at home.

A _______________ is a reciprocal buying agreement whereby one firm sells its products to another at one point and is compensated in the form of the other's products at some future time.

International entry modes are those associated with transfer of ownership or exploitation of specified property from one party to another in exchange for fees and royalties.

The_______________ on corporate income, which is the statutory corporate rate adjusted for all other taxes and subsidies affecting an MNE's taxable income, determines the company's net return from its revenues.

Build-Operate-Transfer (BOT) is a "turnkey" investment in which a foreign investor assumes responsibility for the design and construction of an entire operation and, upon completion of the project, turns the project over to the purchaser and hands over management to local personnel whom it has trained.

Korean ____________ are aggressive late movers such that they wait until the best time but commit aggressively after entry to seize emerging opportunities.

_____________ is a term of price in which the seller covers all costs and risks up to the point whereby the goods are delivered on board the ship in a designated shipment (export) port, and the buyer bears all costs and risks from that point on.

___________are specific forms or ways of entering a target country to achieve planned strategic goals underlying international presence in that country.

___________ have the right to preempt marketing, promotion, and distribution channels, while gaining product image.