Economic and Social Environment

8/9/2019 Economic and Social Environment

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Chapter 19 The Global Marketplace

1) ________ industries are safe from foreign competition.A) MostB) Major

C) FewD) NAFTAE) European nionAnswer! CDiff! " #age $ef! %%%&'i((! Concept*jecti+e! 1,-1

") As g(o*a( trade is growing g(o*a( competition is ________.A) (e+e(ing off B) dec(ining

C) erraticD) intensif/ingE) t0reateningAnswer! DDiff! 1 #age $ef! %%%&'i((! Concept*jecti+e! 1,-1

) Firms t0at p(a/ it safe and do not enter t0e g(o*a( mar'et are (i'e(/ to (ose t0eir c0ances toenter ot0er mar'ets ________.A) *ut ac0ie+e more sta*i(it/ at 0ome

B) *ut gain a competiti+e edge in t0eir 0ome mar'etsC) *ut successfu((/ s0ie(d t0emse(+es from foreign competitionD) and ris' (osing t0eir 0ome mar'etsE) A and BAnswer! DDiff! " #age $ef! %%%&'i((! Concept*jecti+e! 1,-1

"2,Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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2) A ________ is one t0at */ operating in more t0an one countr/ contains mar'eting production researc0 and de+e(opment and financia( ad+antages t0at are not a+ai(a*(e to pure(/domestic competitors.A) g(o*a( firmB) g(o*a( industr/

C) w0o(e-c0anne( +iewD) direct in+estmentE) free trade 7oneAnswer! ADiff! 1 #age $ef! %%%&'i((! Concept*jecti+e! 1,-1

%) A(( of t0e fo((owing are major decisions a compan/ faces in internationa( mar'etingE8CE#T9A) deciding w0ic0 mar'ets to enter B) deciding 0ow to enter t0e mar'etC) deciding 0ow to set standardi7ed pricesD) deciding on t0e g(o*a( mar'eting programE) (oo'ing at t0e g(o*a( mar'eting en+ironmentAnswer! CDiff! " #age $ef! %%:AAC&B! Ana(/tic &'i((s&'i((! Concept*jecti+e! 1,-1

:) A;n) ________ is a ta< (e+ied */ a foreign go+ernment against certain imported products.A) em*argoB) tariff C) e


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>) A;n) ________ is a (imit on t0e amount of goods t0at an importing countr/ wi(( accept incertain product categories.A) em*argoB) tariff C) *enc0mar'

D) =uotaE) e


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1) Conc(uding in 1,,2 t0e rugua/ $ound reduced trade *arriers set internationa( standardsfor trade and esta*(is0ed t0e ________ to enforce ATT ru(es.A) @TB) EC) NAFTA

D) CAFTAE) CANAnswer! BDiff! " #age $ef! %%>&'i((! Concept*jecti+e! 1,-1

12) @0ic0 of t0e fo((owing reduced t0e wor(ds merc0andise tariffs */ 4 percent toug0enedinternationa( protection of cop/rig0ts and trademar's and 0as *een e


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1:) ________ is a group of nations organi7ed to wor' toward common goa(s in t0e regu(ation ofinternationa( trade.A) A joint +entureB) A standardi7ed mar'eting mi<C) An economic communit/

D) A g(o*a( firmE) A mu(tinationa( enterpriseAnswer! CDiff! 1 #age $ef! %%>&'i((! Concept*jecti+e! 1,-1

1>) Formed in 1,%> t0e ________ set out to create a sing(e European mar'et */ reducing *arriers to t0e free f(ow of products ser+ices finances and (a*or among mem*er countries andde+e(oping po(icies on trade wit0 nonmem*er nations.A) rugua/ $oundB) European nionC) European rgani7ationD) NAFTAE) CAFTAAnswer! BDiff! 1 #age $ef! %%>&'i((! Concept*jecti+e! 1,-1

1?) T0e European nion and NAFTA ;Nort0 American Free Trade Agreement) are e-%%?AAC&B! $ef(ecti+e T0in'ing&'i((! Concept*jecti+e! 1,-1

"%2Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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1,) @0ic0 of t0e fo((owing is true regarding economic communities9A) Trade *arriers 0a+e increased *etween t0e nited &tates and Me&'i((! Concept*jecti+e! 1,-1

"%%Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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"") 5n anuar/ 1,,2 ________ esta*(is0ed a free trade 7one among t0e nited &tates Canadaand Me


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"%) @0at is t0e name of t0e sing(e agreement t0at created a mar'et of 22 mi((ion peop(e andwi(( e(iminate a(( trade *arriers and in+estment restrictions among t0e nited &tates Me


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"?) Trusted @0o(esa(ers is a compan/ t0at current(/ purc0ases products produced in Me


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1) T0e two 'e/ economic factors ref(ecting a countr/s attracti+eness as a mar'et are itsindustria( structure and its ________.A) communication adaptationB) nontariff trade *arriersC) e


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2) A;n) ________ econom/ is poor in some wa/s *ut ric0 in one or more natura( resourcesresponsi*(e for creating most of its e


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>) 5ndustria(i7ing economies do NT inc(ude ________.A) Eg/ptB) 5ndiaC) Bra7i(D) &weden

E) an/ of t0e a*o+eAnswer! DDiff! #age $ef! %%,AAC&B! Mu(ticu(tura( and Di+ersit/&'i((! Concept*jecti+e! 1,-1

?) A(( of t0e fo((owing are po(itica(-(ega( factors t0at s0ou(d *e considered w0en decidingw0et0er to do *usiness in a gi+en countr/ E8CE#T9A) attitudes toward internationa( *u/ingB) go+ernment *ureaucrac/

C) if a state re(igion is enforcedD) monetar/ regu(ationsE) po(itica( sta*i(it/Answer! CDiff! " #age $ef! %%,AAC&B! Mu(ticu(tura( and Di+ersit/&'i((! Concept*jecti+e! 1,-1

,) Countries wit0 ________ economies ma/ consist most(/ of 0ouse0o(ds wit0 +er/ (ow fami(/incomes.A) industria(B) industria(i7ingC) ser+iceD) tec0no(ogica(E) su*sistenceAnswer! EDiff! " #age $ef! %%,AAC&B! Mu(ticu(tura( and Di+ersit/&'i((! Concept*jecti+e! 1,-1

":1Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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24) 5ndia needs more imports of raw materia(s suc0 as te


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2) A(( of t0e fo((owing are met0ods of countertrade E8CE#T9A) pa/ing in t0e se((ers currenc/ wit0out furt0er o*(igationB) *artering goods or ser+icesC) counterpurc0asingD) compensation

E) *u/*ac' Answer! ADiff! " #age $ef! %:4&'i((! Concept*jecti+e! 1,-1

22) @0at t/pe of countertrade occurs w0en a se((er se((s a p(ant e=uipment or tec0no(og/ toanot0er countr/ and agrees to ta'e pa/ment in t0e resu(ting products9A) *arterB) counterpurc0aseC) re*u/D) *u/*ac' E) tradeAnswer! DDiff! " #age $ef! %:4&'i((! Concept*jecti+e! 1,-1

2%) apans Fu'usu'e Corporation so(d 'nitting mac0ines and raw te


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2:) A7er*aijan imported w0eat from $omania in e


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2,) T0e form of countertrade in w0ic0 t0e se((er recei+es fu(( pa/ment in cas0 *ut agrees tospend some of t0e mone/ in t0e ot0er countr/ is 'nown as ________.A) counterpurc0asingB) *arteringC) compensation

D) *u/*ac' E) *(oc'ed currenc/Answer! ADiff! 1 #age $ef! %:4&'i((! Concept*jecti+e! 1,-1

%4) @0en Boeing se((s aircraft to 5ndia and agrees to *u/ 5ndian coffee rice and castor oi( andto se(( t0ese products e(sew0ere Boeing is engaging in ________.A) joint +enturingB) *arter

C) *u/*ac' D) compensationE) counterpurc0asingAnswer! EDiff! " #age $ef! %:4AAC&B! $ef(ecti+e T0in'ing&'i((! App(ication*jecti+e! 1,-1

%1) 5t is important to understand 0ow *usiness norms +ar/ from count/ to countr/. For e


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%") &ome socia( critics sa/ t0at g(o*a(i7ation rea((/ means ________ t0e wor(ds cu(tures.A) Americani7ingB) moderni7ingC) sta*i(i7ingD) respecting

E) ignoringAnswer! ADiff! " #age $ef! %:"AAC&B! Mu(ticu(tura( and Di+ersit/&'i((! Concept*jecti+e! 1,-1

%) @0ic0 t/pe of *usiness is EA&T (i'e(/ to find it necessar/ to enter internationa( mar'ets inorder to sur+i+e9A) c(ot0ing manufacturersB) food distri*utors

C) c0ain retai(ersD) sma(( (oca( *usinessesE) automo*i(e producersAnswer! DDiff! 1 #age $ef! %:AAC&B! Ana(/tic &'i((s&'i((! Concept*jecti+e! 1,-1

%2) @0ic0 of t0e fo((owing is a factor t0at is (i'e(/ to pus0 a compan/ to decide NT to enterinternationa( mar'ets9A) T0e compan/s 0ome mar'et is stagnant.B) T0e compan/ wou(d 0a+e to redesign its products.C) T0e compan/ needs to counterattac' internationa( competitors in t0eir 0ome mar'ets.D) Foreign mar'ets present 0ig0er profit opportunities.E) (o*a( competitors 0a+e offered simi(ar products at (ower prices.Answer! BDiff! " #age $ef! %:2AAC&B! Ana(/tic &'i((s&'i((! Concept*jecti+e! 1,-1

"::Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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%%) &e+era( of t0e fo((owing factors mig0t draw a compan/ into t0e internationa( arenaE8CE#T9A) (o*a( competitors mig0t offer *etter products at (ower prices domestica((/.B) Domestic mar'ets mig0t *e stagnant or s0rin'ing.C) Managers are unsure of t0e effect of regu(ations and t0e po(itica( en+ironments of ot0er

countries.D) T0e compan/s customers ma/ *e e) Demograp0ic c0aracteristics geograp0ic c0aracteristics economic factors sociocu(tura(factors and po(itica( and (ega( factors a(( 0e(p a compan/ ________.A) determine a mar'ets potentia(B) determine a countr/s degree of g(o*a(i7ationC) e+a(uate its mar'eting o*jecti+esD) e+a(uate its +a(ue de(i+er/ networ' E) identif/ potentia( joint +enturesAnswer! ADiff! " #age $ef! %:%AAC&B! Mu(ticu(tura( and Di+ersit/&'i((! Concept*jecti+e! 1,-1

":>Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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%?) @0ic0 of t0e fo((owing is a sociocu(tura( factor t0at a compan/ s0ou(d consider *eforedeciding to enter an internationa( mar'et9A) po(itica( sta*i(it/B) popu(ation densit/C) education

D) income distri*utionE) consumer (ifest/(es *e(iefs and +a(uesAnswer! EDiff! #age $ef! %:%AAC&B! Mu(ticu(tura( and Di+ersit/&'i((! Concept*jecti+e! 1,-1

%,) @0ic0 of t0e fo((owing is a po(itica( and (ega( factor t0at a compan/ s0ou(d consider *eforedeciding to enter an internationa( mar'et9A) monetar/ and trade regu(ations

B) transportation structureC) popu(ation si7e and growt0D) industria( infrastructureE) *usiness norms and approac0esAnswer! ADiff! #age $ef! %:%AAC&B! Mu(ticu(tura( and Di+ersit/&'i((! Concept*jecti+e! 1,-1

:4) @0ic0 of t0e fo((owing is an economic factor t0at a compan/ s0ou(d consider *eforedeciding to enter and internationa( mar'et9A) popu(ation si7e and growt0B) natura( resourcesC) cu(tura( and socia( normsD) po(itica( sta*i(it/E) c(imateAnswer! BDiff! #age $ef! %:%AAC&B! Mu(ticu(tura( and Di+ersit/&'i((! Concept*jecti+e! 1,-1

":?Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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:1) A(( of t0e fo((owing are modes of entr/ t0at companies can use w0en t0e/ 0a+e decided tose(( in a foreign countr/ E8CE#T ________.A) e


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:2) @0en entering a foreign mar'et companies t/pica((/ start wit0 ________ wor'ing t0roug0independent internationa( mar'eting intermediaries.A) direct e


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:>) T0in' 5n' is a growing compan/ t0at se((s a +ariet/ of in's for 0ome and *usiness printers.Management at T0in' 5n' 0as decided to open a sa(es *ranc0 o+erseas to 0and(e sa(es anddistri*ution a*road. T0in' 5n' is engaging in ________.A) indirect e


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>4) A(( of t0e fo((owing are four t/pes of joint +entures E8CE#T ________.A) (icensingB) contract manufacturingC) joint owners0ipD) direct in+estment

E) management contractingAnswer! DDiff! " #age $ef! %::&'i((! Concept*jecti+e! 1,-"

>1) T0roug0 ________ an organi7ation in t0e foreign mar'et *u/s t0e rig0t to use a compan/smanufacturing process trademar' patent trade secret or ot0er item of +a(ue.A) indirect e


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>) &ears opened up department stores in MeCop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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>:) 6ers0e/ recent(/ (in'ed wit0 5ndian-*ased odrej Be+erages and Foods to ma'e anddistri*ute its c0oco(ates in t0at countr/. @0en it comes to se((ing c0oco(ate in 5ndia 6ers0e/ wi((need a(( t0e 0e(p it can from its new (oca( partner. T0is is an e?) ower costs in t0e form of c0eaper (a*or or raw materia(s foreign go+ernment in+estmentincenti+es freig0t sa+ings and t0e opportunit/ to impro+e t0e compan/ image are a(( factors t0atwou(d (i'e(/ (ead a compan/ to ________ in a foreign mar'et.A) use direct e


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>,) ________ means se((ing (arge(/ t0e same products and using t0e same mar'eting approac0eswor(dwide.A) Adapted g(o*a( mar'etingB) (o*a( mar'eting mi<C) &tandardi7ed g(o*a( mar'eting

D) E


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?") A(( of t0e fo((owing are strategies for adapting product and mar'eting communications to ag(o*a( mar'et E8CE#T9A) e


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?%) To ma'e reo coo'ies se(( we(( in C0ina Graft comp(ete(/ rein+ented t0e popu(ar a((-American c(assic to a (ong t0in four-(a/ered c0oco(ate-co+ered wafer. T0is is an e4AAC&B! Ana(/tic &'i((s&'i((! App(ication*jecti+e! 1,-

?>) &on/ found t0at apanese commuters 0ad difficu(t/ using standard (aptops on crowded rus0-0our trains since standing commuters 0a+e no (aps. &o it created t0e as a standing computer.T0e inc(udes a touc0 screen and sma(( 'e/*oard t0at can *e used w0i(e standing or on t0emo+e. T0is is an e


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??) C0anging promotions for eac0 (oca( mar'et is 'nown as ________.A) a straig0t e?Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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,1) Ge((ogg ads in t0e nited &tates promote t0e taste and nutrition of Ge((oggs cerea(s +ersuscompetitors *rands. 5n France w0ere consumers drin' (itt(e mi(' and eat (itt(e for *rea'fastGe((oggs ads must con+ince consumers t0at cerea(s are a tast/ and 0ea(t0fu( *rea'fast. Ge((oggis fo((owing w0at t/pe of mar'eting strateg/9A) straig0t product e&'i((! Concept*jecti+e! 1,-

,) A ucci 0and*ag ma/ se(( for I:4 in 5ta(/ and I"24 in t0e nited &tates. 5t must add t0e costof transportation tariffs importer margin w0o(esa(er margin and retai(er margin to its factor/ price. ucci faces a ________ pro*(em.A) dumpingB) tariff C) (icensingD) product adaptationE) price esca(ationAnswer! EDiff! " #age $ef! %>AAC&B! Ana(/tic &'i((s&'i((! App(ication

*jecti+e! 1,-

">,Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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,2) ________ occurs w0en a compan/ eit0er c0arges (ess t0an its costs or (ess t0an it c0arges inits 0ome mar'et.A) #rice esca(ationB) DumpingC) icensing

D) &traig0t product e2&'i((! Concept*jecti+e! 1,-

,%) T0e two major (in's *etween t0e se((er and t0e fina( *u/er of c0anne(s *etween nations andc0anne(s wit0in nations ma'e up a ________.A) w0o(e-c0anne( +iewB) direct-distri*ution c0anne(

C) (arge-sca(e c0anne(D) transportation networ' E) g(o*a( +a(ue de(i+er/Answer! ADiff! 1 #age $ef! %>2&'i((! Concept*jecti+e! 1,-

,:) T0e first (in' *etween t0e se((er and t0e fina( *u/er ________ mo+es compan/ productsfrom points of production to t0e *orders of countries wit0in w0ic0 t0e/ are so(d.A) c0anne(s *etween nationsB) c0anne(s wit0in nationsC) w0o(e-c0anne( +iewsD) (arge-sca(e c0anne(sE) g(o*a( +a(ue de(i+eriesAnswer! ADiff! " #age $ef! %>2&'i((! Concept*jecti+e! 1,-2

,>) A firm norma((/ gets into internationa( mar'eting */ simp(/ s0ipping out its goods. 5f itsinternationa( sa(es e


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,?) @or(d product groups geograp0ica( organi7ations and internationa( su*sidiaries are a((options for organi7ing a;n)________.A) e


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14") Nontariff trade *arriers inc(ude restricti+e product standards t0at wor' against American product features.Answer! T$EDiff! " #age $ef! %%:&'i((! Concept

*jecti+e! 1,-1

14) ATT is a :1-/ear-o(d treat/ designed to promote wor(d trade */ reducing tariffs and ot0erinternationa( trade *arriers.Answer! FA&EDiff! 1 #age $ef! %%>&'i((! Concept*jecti+e! 1,-1

142) T0e E acts as an um*re((a organi7ation t0at o+ersees ATT and mediates g(o*a( disputes.Answer! FA&E

Diff! " #age $ef! %%>&'i((! Concept*jecti+e! 1,-1

14%) Free trade 7ones are a(so 'nown as economic communities.Answer! T$EDiff! " #age $ef! %%>&'i((! Concept*jecti+e! 1,-1

14:) T0e European nion represents one of t0e wor(ds sing(e (argest mar'ets.Answer! T$EDiff! 1 #age $ef! %%>&'i((! Concept*jecti+e! 1,-1

14>) CAFTA wi(( e(iminate a(( trade *arriers and in+estment restrictions among t0e nited&tates Canada and Me


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14,) Barter is often used in su*sistence economies.Answer! T$EDiff! " #age $ef! %%?&'i((! Concept*jecti+e! 1,-1

114) Barter is a form of countertrade.Answer! T$EDiff! " #age $ef! %:4&'i((! Concept*jecti+e! 1,-1

111) T0e eAAC&B! $ef(ecti+e T0in'ing&'i((! App(ication*jecti+e! 1,-"

"?Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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11:) T0e *iggest in+o(+ement in a foreign mar'et comes t0roug0 direct in+estmentJt0ede+e(opment of foreign-*ased assem*(/ or manufacturing faci(ities.Answer! T$EDiff! 1 #age $ef! %:?&'i((! Concept

*jecti+e! 1,-"

11>) Ge((ogg cerea(s are so(d successfu((/ in essentia((/ t0e same form around t0e g(o*e. T0is isan e4AAC&B! $ef(ecti+e T0in'ing&'i((! App(ication*jecti+e! 1,-

11,) Finnis0 ce(( p0one ma'er No'ia customi7ed its ce(( p0ones for t0e Asian mar'et */ raisingt0e ring +o(ume so p0ones cou(d *e 0eard on crowded streets. T0is is an e4AAC&B! Communication&'i((! App(ication*jecti+e! 1,-

1"4) As an e


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1"") To o+ercome price esca(ation w0en se((ing to (ess-aff(uent consumers in de+e(opingcountries companies ma'e simp(er or sma((er +ersions of t0eir products t0at can *e so(d at (ower prices.Answer! T$EDiff! " #age $ef! %>2

&'i((! Concept*jecti+e! 1,-

1") T0e 5nternet is ma'ing g(o*a( price difference more o*+ious forcing companies towardmore standardi7ed internationa( pricing.Answer! T$EDiff! " #age $ef! %>2&'i((! Concept*jecti+e! 1,-

1"2) 5f a firm mo+es into joint +entures and direct in+estments it wi(( e+entua((/ need to create

internationa( di+isions or su*sidiaries.Answer! T$EDiff! " #age $ef! %>%&'i((! Concept*jecti+e! 1,-2

1"%) 5nternationa( di+isions can *e organi7ed as geograp0ica( organi7ations wor(d productgroups or nationa( groups.Answer! FA&EDiff! #age $ef! %>:&'i((! Concept*jecti+e! 1,-2

1":) Companies t0at go g(o*a( confront se+era( major ris's. Descri*e t0ree of t0ese ris's.Answer! Companies t0at go g(o*a( ma/ face unsta*(e go+ernments and currencies a*road aswe(( as restricti+e go+ernment po(icies and regu(ations designed to protect domestic companiesor to protect t0e cu(ture. 6ig0 trade *arriers are anot0er issue. A(so some companies 0a+e to dea(wit0 corruption a*road as some officia(s award *usiness contracts to t0e 0ig0est *ri*er.Diff! " #age $ef! %%%AAC&B! Ana(/tic &'i((s&'i((! App(ication*jecti+e! 1,-1

"?%Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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1">) Compare and contrast a tariff and a quota.Answer! A tariff is a ta< (e+ied */ a foreign go+ernment against certain imported products. A=uota is a set of (imits on t0e amount of goods t0e importing countr/ wi(( accept in certain product categories. Bot0 tariffs and =uotas can *e used to protect domestic firms from foreigncompetition.

Diff! 1 #age $ef! %%:AAC&B! Ana(/tic &'i((s&'i((! App(ication*jecti+e! 1,-1

1"?) Brief(/ eAAC&B! Ana(/tic &'i((s&'i((! App(ication*jecti+e! 1,-1

14) E


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11) Man/ studies re+ea( t0at instead of Americani7ing t0e wor(ds cu(tures t0e cu(tura(eAAC&B! Ana(/tic &'i((s&'i((! App(ication*jecti+e! 1,-"

"?>Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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1%) @0at are two possi*(e reasons t0at management contracting is pre+a(ent in t0e 0ote(industr/9Answer! A 0ote( suc0 as 6i(ton t0at 0as an internationa( reputation and is 0ig0(/ regardedwou(d *ring *rand +a(ue as we(( as eAAC&B! Ana(/tic &'i((s&'i((! App(ication*jecti+e! 1,-"

1:) @0at t/pes of products wou(d *e successfu( wit0 standardi7ed g(o*a( mar'eting9Answer! #roducts t0at re=uire no c0ange to t0e product itse(f or to t0e products promotionwou(d fo((ow a standardi7ed mar'eting mi) E2AAC&B! Ana(/tic &'i((s&'i((! App(ication*jecti+e! 1,-

"??Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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124) 5dentif/ t0e t0ree major wa/s a compan/ can manage its internationa( mar'eting.Answer! T0e compan/ must de+e(op an effecti+e organi7ation for internationa( mar'eting. Mostfirms start wit0 an eAAC&B! Ana(/tic &'i((s&'i((! App(ication*jecti+e! 1,-1

12") Descri*e t0e po(itica(-(ega( factors t0at a compan/ s0ou(d consider *efore deciding to do *usiness in a foreign countr/.Answer! A compan/ s0ou(d consider t0e countr/s attitudes toward internationa( *u/ing as we((as t0e countr/s *ureaucrac/ po(itica( sta*i(it/ and monetar/ regu(ations. &ome countries arerecepti+e to foreign firms offering incenti+es and fa+ora*(e operating conditions w0i(e ot0ercountries set restrictions and (imitations designed to discourage foreign *usiness. A countr/ t0atis po(itica((/ unsta*(e wit0 fre=uent and sometimes +io(ent c0anges in (eaders0ip offers a (esscertain en+ironment for *usiness and financia( matters. A countr/ ma/ a(so 0a+e monetar/regu(ations suc0 as a *(oc'ed currenc/ w0ose remo+a( from t0e countr/ is restricted t0at acompan/ s0ou(d e+a(uate.Diff! #age $ef! %%,AAC&B! Mu(ticu(tura( and Di+ersit/&'i((! App(ication*jecti+e! 1,-1

"?,Cop/rig0t 3 "414 #earson Education 5nc. #u*(is0ing as #rentice 6a((


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12%) Descri*e t0e factors t0at mig0t draw a compan/ into t0e internationa( arena.Answer! An/ of se+era( factors mig0t draw a compan/ into t0e internationa( arena. (o*a(competitors mig0t attac' t0e compan/s 0ome mar'et */ offering *etter products or (ower prices. T0e compan/ mig0t want to counterattac' t0ese competitors in t0eir 0ome mar'etsto tie up t0eir resources. T0e compan/s customers mig0t *e e


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12>) Discuss direct and indirect e


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12,) 5dentif/ and descri*e t0e t0ree product strategies a compan/ entering a foreign mar'et canuse.Answer! A compan/ can c0oose straig0t product e

Economic and Social Environment

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