Chapter 5 The Global Environment MULTIPLE CHOICE 1 Donna is a certified public accountant with expertise in only the U S tax code Her service is a n business b domestic 2 Tohos pantyhose with the foot shaped like a mitten are sold over the Internet Its business is primarily in the United States and Japan It is an example of a n business a international 3 A n business is one that is primarily based in a single country but that acquires some meaningful share of its resources and or revenues from other countries a international 4 Coca Cola is based out of Atlanta but reaches into hundreds of countries The product is locally packaged but the cola inside is essentially the same throughout the world Coca Cola is edging closer to being a n business e global 5 Nokia sells phones in more than 150 countries and has employees in more than 120 countries It is a n business c multinational 6 Marks Spencer is an upscale British department store that has a few stores in the United States and two stores in Paris According to the classification scheme in the text Marks Spencer is a n business a international 7 A n business transcends national boundaries and is not committed to a single home country e global 8 Which of the following statements can be used to explain the growth of international business a Many countries in Europe and Asia were devastated after World War II and had to be rebuilt 9 Which of the following describes what has occurred in international business during the past three decades b The volume of international trade increased more than 3000 percent 10 Which of the following is the least intense level of international business strategy a Importing exporting strategy 11 American music and movie industries are the largest in the world These industries use to bring their product around the world d exporting 12 Two U S companies Cargill and Archer Daniels Midland purchase 25 of the world cocoa supply from farmers in West Africa These companies use a importing Chapter 5 1 2011 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in whole or in part 13 is the least risky type of international business in which firms usually become involved a Importing exporting 14 Which of the following is NOT a potential disadvantage associated with an import export operation c There is a great deal of risk involved compared to other strategic alternatives 15 A n strategy requires little initial investment is heavily regulated and provides little opportunity to modify products for local conditions 16 Which of the following statements does NOT describe a characteristic of importing exporting e The costs of initiating an import export strategy are high 17 A disadvantage of importing exporting is e government restriction 18 In the U S Starbucks does not franchise It has a n agreement with Barnes and Noble c strategic 19 Colleges and Universities allow shirts hats blankets and many other products to be sold with school logos on them The schools get a percentage of the sale The schools have chosen to use a n strategy to generate more income b licensing 20 Which of the following is NOT a reason for using a licensing agreement as a means of entering international business a Low levels of risk 21 Siemens moves almost all the mail in the United States Siemens and the U S Postal Service use a n strategy e strategic alliance 22 Great Wolf Lodge is a hotel chain with water parks built inside In the lobbies they have Pizza Hut and Starbucks Great Wolf Lodge uses a n strategy e a joint venture strategic alliance 23 A n strategy involves a partnership with a long term commitment that can be used to acquire new technology and information b joint venture 24 is the form of international business involvement in which two or more firms have an equity position in an operation a A joint venture 25 Which of the following is a disadvantage of joint ventures strategic alliances e Shared control over operations 26 strategy is considered the highest level of involvement in international business e Direct investment 27 Which of the following statements about maquiladoras is FALSE c Maquiladoras are a form of licensing Chapter 5 2 2011 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in whole or in part 28 Compassion International is a children s charity that provides basic necessities schooling and job training for poverty stricken children around the world This not for profit organization would require which type of investment when it enters a new country a Direct investment 29 Starbucks owns one third of its stores outside the U S Those stores are a n a direct investment 30 The advantage of direct investing is c enhanced control 31 McDonalds operates restaurants around the world in airports The agreement between McDonalds and the airports is a n b strategic alliance 32 Opponents to the maquiladoras concept are most critical of its b exploitation of human resources 33 The major reason so many companies from all over the world are embracing the maquiladoras concept is because of e cheap labor 34 Which of the following is a problem associated with the implementation of a direct investment strategy a Complexity of decision making 35 Which of the following is the type of economy most countries in the world are striving to attain a Mature market economy 36 economies are recognizable by their tendency to allow market forces to determine business strategies and to have private ownership of property b Market 37 Germany is a mature market economy One major problem GE expected to face when it began operating in Germany was c taking market share from established firms 38 U S managers have the least difficulty operating in economies a market 39 The U S government became the majority shareholder in GM in 2009 The Obama administration was moving the U S away from a economy e market 40 Which of the following countries does NOT have a mature market economy d Iran 41 Which of the following countries is NOT a member of the European Union EU e Ukraine 42 Which of the following is NOT an example of a mature market system c China Chapter 5 3 2011 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in whole or in part 43 With whom is the United States involved in a mature market system d Canada and Mexico 44 Which of the following countries is