International Business Test

Result

International Business Test - 15

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Weekly Quiz Competition

Question 1
1 / -0

The goals of international marketing are to ________.

A
create and retain customers in global markets

B
eliminate competition in international markets

C
expand business activities abroad

D
gain market share and increase profit

Solution

The goals of international marketing are to create new customers in the global market and retain the existing customers in the global markets.

By implementing international marketing strategies, each company wishes to achieve certain set performance levels. Being a commercial company, it wants to secure the market place with maximum profits in the long run. It also aims at bringing the countries closer thereby reducing the geographical boundaries. This encourages large scale free trade.
Question 2
1 / -0

What is the advantage to the franchisee in a franchising?

A
Marketing

B
Economies of scale

C
Instant goodwill

D
All of the above

Solution

In franchising, franchisee gets economies of scale i.e. it does not require huge costs to operate its business as it gets knowledge to do work from the franchisor themselves.
Question 3
1 / -0

Franchiser helps the franchisee on setting up business or not?

A
Yes

B
No

C
Partly yes

D
Can't say

Solution

Yes, franchiser helps the franchisee on setting up a business as it provides know-how, training to the franchisee regarding its business and also give him the rights to sell its products in the market.
Question 4
1 / -0

Franchising is a part of _______.

A
privatization

B
liberalization

C
globalization

D
none of the above

Solution

Franchising is a part of privatization as franchising offers people the right to own, manage and direct their own business. It involves the owner of a business providing licenses to the third party to sell its products in the market.
Question 5
1 / -0

Franchising is a _______ method.

A
workforce-oriented

B
market-oriented

C
production-oriented

D
management-oriented
Solution
- Franchising is a market oriented method of entering an international market as it is a marketing concept adopted by an organization with a strategy of market expansion.
- Franchising agreement involves grant of rights by one party to another for use of technology, trademark and patents in return of the agreed payment for a certain period of time.
- It is the uniqueness of the technique that gives the franchiser an edge over its competitors in the field, and makes the would-be-service providers interested in joining the franchising system.
Question 6
1 / -0

The term loyalty is closely associated with _______.

A
licensing

B
direct exporting

C
contract manufacturing

D
piggybacking

Solution

Customer loyalty is necessary for every business organisation to retain its customers. Business is required to maintain loyalty with its customers and stakeholders so that it can survive in the market. Loyalty is closely associated with licensing.
Question 7
1 / -0

Compared to licensing, franchising is a more advantageous mode of entry because _______.

A
it offers greater control

B
it generates economies of scale of operations

C
it is a low-risk and a low-cost approach

D
all of the above
Solution
Licensing is a contractual arrangement in which one firm grants access to its patents, trade secrets or technology to another firm in a foreign country for a fee called royalty.
Franchising is a business concept in which franchiser provides permission to the third party i.e. franchisee to sell its products. Here, franchisee has a low risk, greater control and low cost and franchiser gets economies of scale.
As compared to joint ventures and wholly owned subsidiaries, licensing/ franchising is relatively a much easier mode of entering into foreign markets with proven product/technology without much business risks and investments
Question 8
1 / -0

_________ is the corner stone of international franchising.

A
Concentration

B
Adaptation

C
Standardization

D
Focus

Solution

Standardization is the cornerstone of international franchising as franchising helps the business enterprise in expanding its business by providing licenses of its know-how to the third party.
Question 9
1 / -0

Advantage(s) to a franchiser in a franchise is/are _______.

A
capital injection

B
market penetration

C
risk sharing

D
all of the above
Solution
- “Franchising is basically a specialised form of licensing in which the franchisor not only sells intangible property (normally a trademark) to the franchisee, but also insists that the franchisee agrees to abide by strict rules as to how it does business.” Charles W.L. Hill
Advantages include:
- Franchising is, considered a less expensive mode of entering into international business.
- Since no or very little foreign investment is involved, franchiser is not a party to the losses.
- Since the business in the foreign country is managed by the franchisee who is a local person, there are lower risks.
Thus franchiser is the one who provides permission to the third party i.e. franchisee to sell its brand and products in the market. It helps in expanding the market, in sharing the risk and also in capital injection.
Question 10
1 / -0

Which of the following is not effective in preventing a potential competitor from entering the market?

A
High capital costs

B
High switching costs

C
Entry barriers - Tariffs

D
None of these

Solution

Generally, a business with sufficient financial resources choose to enter the international markets where costs of capital of such investment is likely to be high. It can be hence said that high capital costs are not always a threat for the competitors to enter a market as people may be ready to bear the costs if they expect huge amount of profits in the future.

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Re-Attempt Weekly Quiz Competition

International Business Test - 15

Result

International Business Test - 15

Score

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Rank

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SHARING IS CARING

Question 1

create and retain customers in global markets

eliminate competition in international markets

expand business activities abroad

gain market share and increase profit

Solution

Question 2

Marketing

Economies of scale

Instant goodwill

All of the above

Solution

Question 3

Yes

No

Partly yes

Can't say

Solution

Question 4

privatization

liberalization

globalization

none of the above

Solution

Question 5

workforce-oriented

market-oriented

production-oriented

management-oriented

Solution

Question 6

licensing

direct exporting

contract manufacturing

piggybacking

Solution

Question 7

it offers greater control

it generates economies of scale of operations

it is a low-risk and a low-cost approach

all of the above

Solution

Question 8

Concentration

Adaptation

Standardization

Focus

Solution

Question 9

capital injection

market penetration

risk sharing

all of the above

Solution

Question 10

High capital costs

High switching costs

Entry barriers - Tariffs

None of these

Solution

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