GMS 522 Final UPDATED Exam Questions and CORRECT Answers
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Course
GMS 522
Institution
GMS 522
GMS 522 Final UPDATED Exam Questions
and CORRECT Answers
Internationalization - Correct Answer- -defined as the process by which firms become more
engaged in international markets.
-the process involves varying degrees of financial and other resource commitments to foreign
markets and of co...
GMS 522 Final UPDATED Exam Questions
and CORRECT Answers
Internationalization - Correct Answer- -defined as the process by which firms become more
engaged in international markets.
-the process involves varying degrees of financial and other resource commitments to foreign
markets and of course, various degrees of risk
Mode of Entry - Correct Answer- central to the process of internationalization is the selection
of an entry mode. These range from low commitment modes such as exporting high
commitment modes such as foreign direct investment
Motivation - Correct Answer- the motivation for internationalization may either be proactive
(firm wants to) or reactive (firm has little choice)
Uppsala or U model - Correct Answer- the firm first expands to a psychically close market
and having become familiar with that market, will target slightly more distant markets.
experiential knowledge is the major driver of its pattern of internationalization. The Uppsala
model has been criticized for its linear approach to the internationalization process
Dunnings OLI framework - Correct Answer- firms expand abroad to capitalize on ownership,
location and internalization advantages
Advantages of Dunnings OLI framework - Correct Answer- -ownership of foreign assets will
confer on the firm a competitive advantage in the foreign market which is not enjoyed by
competing firms that do not own such assets
-location confers advantages in terms of tax or other investment incentives offered by the
gov't of the host country or a more favorable industrial relations climate for the firm's
operations
-internalization of firm-specific advantages such as proprietary technology confers benefits to
the firm over alternatives such as licensing
Springboard or latecomer perspective - Correct Answer- emerging market firms
internationalize in order to overcome limitations inherent in their home-country environment,
such as small market size, institutional immaturity or a relatively unsophisticated consumer
,base. To accomplish this firms aggressively acquire strategic assets from MNCs in developed
countries
Macro Segmentation - Correct Answer- -develop segmentation criteria
-apply to group countries
Preliminary screening - Correct Answer- -develop additional criteria
-apply to reduce the # of candidate countries
Secondary screening - Correct Answer- -firm assesses its own capabilities relative to the
market
Final security selection - Correct Answer- -conduct site visit
Selecting Foreign Markets - Correct Answer- the end result of the process is the selection of
one country from the universe of potential candidates by a process of elimination
International consumer segmentation - Correct Answer- consumers in cross-national
segments may have more in common with their counterparts in other countries than they do
with citizen of their own countries. If this is the case a two-stage model may be appropriate in
which segmentation is undertaken at both the country and consumer levels
Country Level Screening - Correct Answer- macro-segmentation based on overall market
attractiveness
Consumer level screening - Correct Answer- micro-segmentation based on personal and
societal values
Export Modes - Correct Answer- low risk-low return modes which provide limited control for
the exporting firm
Intermediate Modes - Correct Answer- modes which provide for the sharing of the risks and
rewards of market entry commensurate with the share of ownership of each partner
Hierarchical Modes - Correct Answer- modes in which firm has complete control of the
operation but also exposure to a higher level of risk
Exporting - Correct Answer- involves the manufacture of a product in one country and its sale
in one or more foreign countries
Two forms of exporting - Correct Answer- -direct
-indirect
Direct Exporting - Correct Answer- exporters transact with an intermediary based in the
foreign market
Indirect Exporting - Correct Answer- exporter transacts with an intermediary based in its
home country. This intermediary takes responsibility for getting the exporter's product into
foreign country. Domestic transaction from standpoint of the exporter
Advantages to exporting - Correct Answer- -requires little by way of managerial skills or
knowledge of the foreign market
-carries with it minimal risk for the firm
-does not involve significant costs for the firm
Disadvantages to exporting - Correct Answer- -lower returns relative to other entry modes
-little control over how the product is positioned and sold in the foreign market
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