International Business: Key Concepts and Strategies
International Business
GAC Assessment 2
1. What is an Entry Mode?
An entry mode is a method in which a company enters a new international market.
2. Mention the Five Entry Modes
- Exporting
- Licensing
- Joint Venture (JV)
- Foreign Direct Investment (FDI)
- The Internet
3. Explain Exporting
Exporting involves marketing and selling home country goods and services in another country.
4. What are Agents and Distributors? Explain the Differences
- Agents: Agents distribute a product on behalf of a company.
- Distributors: Distributors buy the product from the company and resell it.
5. When is Exporting Most Effective?
- When the target market is politically unstable.
- When the target market has high production costs.
- When the target market offers limited sales volume potential.
- When the product or service requires little adaptation.
6. Explain Licensing and When it is Better to Use This Mode
Licensing allows the licensee in the host country to use the property of the licensor.
- When the target market has high investment and import barriers.
- When the target market offers a small potential sales volume.
- When it makes it difficult for a new competitor to enter the market.
- When it requires a significant cultural adaptation.
7. What is a Joint Venture?
A joint venture is an alliance between two companies, typically one from the home country and one from the host country.
8. When is a Joint Venture Most Effective?
- When the target market offers a high potential sales volume.
- When the target market has some political risk.
- When it makes market entry difficult for foreign business owners.
- When the joint venture is able to provide the necessary skills and a distribution network.
9. What is Foreign Direct Investment and Ownership Percentage?
Foreign Direct Investment (FDI) is when the home country company invests in plant, machinery, and labor in the overseas market. Typically, the home country company must own a majority stake in the subsidiary.
10. When is it Better to Use FDI?
- When the target market offers a high potential sales volume.
- When the target market has a low political risk.
- When the target market has high import barriers.
- When the product or service requires little cultural adaptation.
11. When is the Internet an Effective Entry Mode?
- When the target market offers a low potential sales volume.
- When the target market has a high political risk.
- When the target market applies minimal import duties.
- When the product requires no adaptation.
12. Explain the Theory X Approach
- People do not like work and will avoid it if possible.
- People generally have little ambition and expect to be directed.
- Job security is what motivates employees the most.
- It is necessary to force people to work towards organizational goals and to check on their progress.
13. Explain the Theory Y Approach
- Working hard is natural.
- People will work independently and check on their own progress.
- Job satisfaction drives commitment to objectives.
- Employees will seek responsibility under the proper conditions.
- Most people are imaginative and creative.
- Organizations rarely exploit the full intellectual potential of their employees.
14. Explain the Theory Z Approach
- Trust
- Communication
- Greater responsibility
- Group work
15. What Theory Relates to Which Management Styles and Why?
- Paternalistic relates to Theory X because it concentrates on ensuring tasks are accomplished as a priority.
- Authoritarian relates to Theory Z because it uses work-centered behavior combined with a concern for employees. If employees work hard, then the company will look after them.
- Participative relates to Theory Y because it combines a work-centered and employee-centered approach. Employees are encouraged to take control of their own workloads.
SMART Goals
- S: Specific
- M: Measurable
- A: Achievable
- R: Realistic
- T: Time-specific