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Question 1

For a UK budget hotel chain seeking expansion in overseas markets, a "push" factor may be represented by:

a) New opportunities arising in overseas market.

b) Subsidies given for new hotel development by overseas governments.

c) Increasing saturation of the domestic market.

d) Increasing level of income in the domestic market.

Question 2

A high level of exports of luxury consumer goods to a country with a low average level of GDP per capita may be indicative of that country's:

a) Low level of imports

b) High level of average income

c) High average propensity to spend

d) Uneven distribution of income

Question 3

A theme park operator considering setting up an operation in an overseas country, is most likely to begin its research by:

a) Conducting secondary research in its target market

b) Conducting primary research in its target market

c) Conducting secondary research at home

d) Conducting primary research at home

Question 4

Adaptation of both promotion and product specification to the requirements of overseas markets is likely to be most thorough for:

a) An international hotel chain

b) A car rental chain

c) A local utility sub-contractor

d) An airline

Question 5

Which of the following overseas market entry strategies is likely to give a restaurant operator the highest level of control?

a) Direct investment

b) Joint venture

c) Management contracting

d) Franchising

Question 6

Which of the following overseas market entry strategies is likely to present a restaurant operator the lowest level of risk?

a) Direct investment in a new overseas start-up.

b) Acquisition of a controlling interest in an overseas subsidiary.

c) Develop a new format of restaurant specifically for the proposed new overseas market.

d) Sale of a master franchise to an overseas company.

Question 7

The theory of comparative cost advantage holds that a national economy will:

a) Aim to minimize the cost of its producers.

b) Export what it is good at and import goods where it is weak.

c) Import what it is good at and export goods where it is weak.

d) Always aim to produce goods and service at a comparable cost compared to the most efficient economy.

Question 8

A trading bloc has the effect of:

a) Blocking trade with all other countries.

b) Increasing trade between bloc members: favouring it against other countries.

c) Reducing trade between bloc members: favouring against other countries.

d) Reducing trade between bloc members: discriminating against other countries.

Question 9

All of the following are examples of limitations on the operation of the principle of comparative cost advantage EXCEPT:

a) Imposition of tariffs

b) Quotas on imports

c) Subsidies for export of goods

d) Lower standards of social welfare legislation

Question 10

Joint ventures are a desirable way to expand overseas because:

a) Joint ventures are a risk free method of expansion.

b) Only the local partner is liable for tax.

c) Joint ventures always involve a local partner with detailed knowledge of the local market.

d) It can help overcome barriers such as access to intermediaries or government rules of the ownership of firms.

Oxford University Press, Online Resource Centre, Chapter 13.

Chapter 13

Instructions