Practice Questions

Formulate the primary purpose of a 'bill of entry' in the import process.

Demonstrate the process an exporter follows to obtain pre-shipment finance after receiving a confirmed order.

Demonstrate how international business can lead to a more efficient use of resources for participating countries.

Define the term 'international business' as described in the chapter.

Name the two types of foreign investment discussed in the chapter.

Justify the statement: 'Customer heterogeneity is a more significant challenge in international business than in domestic business.'

Identify the fundamental reason why countries engage in international business.

Examine the primary purpose of a 'letter of credit' in an export transaction.

Examine why a 'certificate of origin' is a necessary document in international trade.

Evaluate the impact of political systems and risks on international business operations compared to domestic business. Propose two strategies for a multinational corporation to manage political risks in a host country.

Design a basic franchising model for a successful Indian restaurant chain aiming to expand globally. Identify three critical elements that must be standardized to protect the brand's integrity.

Explain the difference between direct and indirect exporting.

What is a 'letter of credit' in the context of international trade?

Examine why a developing country that is labor-abundant, according to the principle of geographical specialization, would likely focus on producing and exporting garments.

Examine the difference between a sight draft and a usance draft in securing payment for exports.

Recall the meaning of a 'bill of entry'.

Summarize the concept of a 'wholly owned subsidiary' and list its two establishment methods.

Describe three benefits of international business for a business firm.

A Japanese electronics firm is considering a joint venture with an Indian company to manufacture and sell televisions in India. Analyze the potential advantages and limitations of this joint venture for the Japanese firm.

Analyze how entering international markets can help a firm overcome the problem of a saturated domestic market and intense competition.

Create a scenario for a large multinational automobile company planning to enter the Indian market. Propose a joint venture as the ideal entry mode and justify this choice over establishing a wholly owned subsidiary.

Justify why an exporter would insist on receiving a letter of credit from an unknown importer instead of relying on an open account payment term.

Justify the need for a 'mate's receipt' in the export shipping process, even though a 'bill of lading' is the final document of title.

List three ways in which international business differs from domestic business.

Compare domestic business and international business on the basis of stakeholder nationality and customer heterogeneity.

Contrast foreign direct investment (FDI) with portfolio investment as forms of international business.

Analyze the potential limitations a company might face if it chooses exporting as its sole method for international expansion.

Describe the concept of 'contract manufacturing' as a mode of entry into international business.

Compare and contrast the roles of a 'bill of lading' and a 'bill of entry' in an international trade transaction, detailing who issues them and for what purpose.

Formulate a business vision statement for a firm like Mr. Manchanda's that is planning to enter international markets, incorporating at least two key benefits of international business.

Critique the licensing mode of entry from the perspective of a technology firm that owns valuable trade secrets. What is the primary risk it must evaluate?

Propose one strategy a business can use to mitigate risks associated with currency fluctuations in international transactions.

Propose a contract manufacturing strategy for a global sportswear brand planning to launch a new line of affordable athletic shoes for developing countries. Evaluate the key advantages and potential pitfalls of this proposal.

Design a simplified checklist for a first-time exporter, outlining the five most critical documents required to ensure smooth customs clearance and secure payment. Justify the inclusion of each document.

List and describe five key documents required for an export transaction.

Describe the initial five steps of a typical export procedure, from receiving an enquiry to obtaining pre-shipment finance.

Critique the argument that international business always leads to an 'increased standard of living' for all citizens in a developing country.

Explain the five major forms of business operations that constitute the scope of international business.

Explain the difference between licensing and franchising, providing an example for each.

Evaluate the two proposals presented to Mr. Sudhir Manchanda: exporting directly or through export houses versus setting up a wholly owned factory in Bangkok. Justify which option is more suitable for his small manufacturing firm.

Analyze the case of Mr. Sudhir Manchanda. Contrast the two main proposals for his company's international expansion: direct exporting versus setting up a wholly owned subsidiary in Bangkok.

Evaluate the principle of 'geographical specialisation' as the fundamental reason for international trade. Is this principle still as relevant in the modern global economy dominated by technology and services?

A German automobile company wants to enter the Indian market. Analyze the key differences in business systems and political risks it must consider compared to operating in Germany.

Summarize the key advantages and limitations of entering a foreign market through a joint venture.

A UK based sportswear brand wants to manufacture its shoes in Vietnam to reduce costs. Compare and contrast contract manufacturing and licensing as potential modes of entry for this purpose.