Q&A Hero

Q: Social desirability bias can be seen as a cultural problem when conducting market research.

Q: Briefly describe the Association of Southeast Asian Nations.

Q: A low level of literacy in a country makes the use of mail questionnaires more appropriate for market research.

Q: Describe the arguments for the North American Free Trade Agreement (NAFTA).

Q: When a firm's personnel have had no experience in a country, management should probably use the company's research personnel to conduct local market research.

Q: Describe the contents of the North American Free Trade Agreement (NAFTA).

Q: Benefits of trade fairs include sales, making contacts with prospective buyers and agents, and competitive intelligence.

Q: CeBIT is a horse-trading-related trade fair.

Q: Describe the drawbacks of the euro.

Q: Briefly describe the benefits of the euro.

Q: Trade missions consist of a group of people in search of business opportunities.

Q: What are the objectives of the Single European Act?

Q: For a company interested in entering a foreign market, a report analyzing in detail all five screening forces listed in the book is sufficient information.

Q: Briefly describe the European Council.

Q: Companies sometimes enter markets where strong competitors are in order to distract their competitors from entering their own home market.

Q: Briefly describe the concept of regional economic integration.

Q: Managers may consider entering a market in which strong competition already exists if they believe entering a competitor's home market will distract the competitor's attention from the new entrant's own home market.

Q: What are the benefits of FDI to the home (source) country?

Q: Countries in which strong competition already exists are eliminated from consideration by most managers.

Q: "Firms prefer to acquire existing assets rather than undertake greenfield investments while contemplating FDI." Explain the reasons that support this argument.

Q: One should not look at sociocultural forces as subjective.

Q: Explain the organizational structure and the key functions of the WTO.

Q: The United States can be considered politically unstable compared to many countries.

Q: During the 1980s and early 1990s, why did the world trade system, erected by GATT, came under strain due to increased pressures for greater protectionism?

Q: Management should take the attitude that the stability of government policy is more important than is the particular form of government of a country.

Q: Give a brief description of the origin, functions, and successes of GATT from 1947 to 1979, before protectionist trends gained momentum across the world.

Q: Regulations allowing the repatriation of earnings are considered an entry barrier.

Q: What constitutes the revised case for free trade?

Q: Most companies can enter a market in stages. The order listed in the textbook is establishment of a foreign sales company, exporting, local assembly, and manufacturing.

Q: Briefly describe the implications of the strategic trade policy as applied to international trade.

Q: Cluster analysis is a technique for dividing objects into groups based on geographic or economic similarity.

Q: What is the "infant industry argument"? What are its implications for the world economy? What are the criticisms of this argument?

Q: When the historic growth rates of a product are known, future growth can be forecast by means of trend analysis.

Q: Describe briefly, with examples, the use of trade policies by governments to support their foreign policy objectives.

Q: Trend analysis assumes that past conditions will remain constant.

Q: What are the political arguments for government intervention into international trade?

Q: Trend analysis and cluster analysis are used in the third screening phase.

Q: Explain with an example the administrative trade policies used by the governments in addition to the formal instruments of trade policy.

Q: Estimation by analogy is an example of a market factor.

Q: What is a voluntary export restraint? Why do exporting countries agree to VERs? Explain with an example.

Q: The e-commerce potential index developed in the text includes three indexes: market size, market growth rate, and e-commerce readiness.

Q: Market indicators measure relative market weaknesses.

Q: Are tariffs levied only on imports?

Q: Market indicators are economic data that correlate highly with market demand for a product.

Q: Discuss the policy implications of Porter's theory of national competitive advantage.

Q: Market indicators and market factors measure market demand.

Q: From a profit perspective based on the various international theories, how would a business go about choosing locations for its various productive activities?

Q: A complete financial analysis is part of the financial and economic forces screening process.

Q: Briefly explain how demand conditions shape the environment in which local firms compete.

Q: Analysis of the paying habits of customers is studied as part of the sociocultural forces screening.

Q: Identify and briefly describe the four broad attributes that constitute Porter's diamond.

Q: During the second screening, analysts are highly concerned with inflation rates, education levels, and entry barriers.

Q: Outline the relationship between economies of scale, first-mover advantages and the pattern of trade as indicated by new trade theory.

Q: During the second screening, analysts are highly concerned with inflation trends, exchange rates, and interest rates.

Q: What reasons does Raymond Vernon cite for U.S. firms basing initial production at home and not at low-cost foreign locations?

Q: Imports to a country can be a good indicator of the potential demand for a new product.

Q: Describe the Leontief paradox.

Q: Knowing the number of imports to a specific country provides a firm with a complete measure of market potential.

Q: Discuss Paul Samuelson's critique of free trade.

Q: Trade flows are good indicators of the magnitude of present sales.

Q: How does the theory of comparative advantage suggest that trade is a positive-sum game to a greater degree than the theory of absolute advantage?

Q: In general, when the basic need for a product is absent, no reasonable expenditure of effort is likely to enable a firm to market its goods or services.

Q: Discuss Adam Smith's concept of absolute advantage.

Q: The first step in the market screening process is the economic/financial screening.

Q: Country and region are units of analysis for market screening.

Q: What are the various disadvantages faced by the societies that emphasize on individual performance?

Q: Country and segment are units of analysis for market screening.

Q: (p. 94, 95) What are norms? Briefly describe the two categories of norms.

Q: Market screening can assist firms that sell exclusively in the domestic market.

Q: List the three measures on which the Human development Index (HDI) is based.

Q: Environmental scanning provides the firm with information about world opportunities and threats.

Q: Describe Amartya Sen's conceptions of development.

Q: Climate, topography, and natural resources refer to environmental scanning.

Q: What is repatriation? What is its importance?

Q: In environmental scanning the firm scans the world for environmental forces that might affect it.

Q: Describe the disadvantages of a polycentric staffing policy.

Q: By conducting environmental scanning, a firm monitors the natural resources around the world that may affect it.

Q: What are the reasons for the failure of spouses to adjust to an expatriate's foreign posting?

Q: Market screening is a modified version of environmental scanning in which the firm studies the stock market to eliminate the less desirable markets.

Q: Define an expatriate manager. Describe the dimensions of self-orientation and others-orientation that predict success in a foreign posting.