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Answer: The five primary ways to enter a foreign market include exporting, international
licensing, international franchising, specialised modes, and foreign direct investment.
2) What are the steps involved in foreign market analysis?
Answer: When assessing foreign markets, firms must first assess alternative markets. This process
involves considering market potential, levels of competition, the legal and political environment,
and sociocultural influences. Then, the firm should evaluate the respective costs, benefits, and risks
of entering each, and finally, select those that hold the most potential for entry or expansion.
Answer: Compatibility, the nature of the potential partner's products, the relative safeness of the
alliance, and the learning potential of the alliance.
2)What are the benefits of strategic alliances?
Answer: Benefits of strategic alliances include ease of market entry, shared risk, shared
knowledge, and synergy/competitive advantage.
3)Are strategic alliances important in the airline industry?
Answer: Strategic alliances are very important in the airline industry. Three mega-alliances
together account for about 69 percent of the world's air revenue passenger miles.
4) What kinds of things might cause incompatibility among partners in a strategic alliance?
Answer: Corporate culture, national culture, goals, and objectives can all contribute to
incompatibility among partners.
5)Explain why Boeing established a strategic alliance with several Japanese partners to help
develop its 777 jet.
Answer: Boeing formed a strategic alliance with several Japanese partners to help reduce the risk
involved in developing its 777 aircraft. Developing the new plane required billions of dollars of
R&D up front. Because Boeing could not be sure how well the new aircraft would be received, the
company looked for ways to reduce its financial exposure, and established an alliance with Fuji,
Mitsubishi, and Kawasaki. Boeing is the controlling partner in the alliance
6)Why have strategic alliances become so important to the international airline industry?
Answer: Mega alliances dominate the international airline industry. By linking up with other
firms, airlines can offer customers more flights and more destinations, easier transfers between
alliance members' flights, and the opportunity to use frequent flyer miles earned on one carrier to
fly on another. In addition, alliances provide airlines with the ability to advertise to a larger
audience.
Chapter 16
1) What reason related to marketing prompted many firms to form joint ventures with local firms in
India, Mexico, and China?
Answer: For many years, local laws made it difficult for many firms to establish distribution
systems in India, Mexico, and China. Consequently, firms often formed joint ventures with local
firms to take advantage of their distribution systems.
2)Why is fit between business strategy and marketing strategy so important in international
business?
Answer: A firm's business strategy and marketing strategy must be in sync. If a firm is pursing a
cost leadership strategy, then it must also seek out low-cost suppliers and sell its product in discount
stores. A firm that is following a differentiation strategy where its product is positioned as a luxury
item should not sell at a discount store.
3) What are the advantages and disadvantages of standardized international marketing?
Answer: The advantages of standardized international marketing are 1) reduces marketing costs, 2)
facilitates centralized control of marketing, 3) promotes efficiency in R&D, 4) results in economies
of scale in production, and 5) reflects the trend toward a single global marketplace. The
disadvantages are that it 1) ignores different conditions of product use, 2) ignores local legal
differences, 3) ignores differences in buyer behavior patterns, 4) inhibits local marketing initiatives,
and 5) ignores other differences in individual markets.