商学导论Cha 4chapter 4 课后练习

Chapter 4 Investing in a Business Using the annual report of the firm in which you would like to invest，complete the following： 1 Describe the means (if any) by which the firm engages in global business．Does it export? Does it import? Does the firm have foreign subsidiaries overseas? Joint ventures? 2 In what foreign countries does the firm do business? Is the firm seeking to expand into new foreign markets? How does its overseas sales growth compare with its domestic sales growth? 3 Does the firm's annual report superficially mention foreign firms as a source of competition? 4 Was the firm's performance affected by exchange rate movements last year? If so，how? 5 Explain how the business uses technology to assess the global environment in which it operates．For example，does it use certain websites to determine its exchange rate risk? Does it use the Internet to determine its global competition? 6 Go to http://hoovers.com and locate the NEWS SEARCH．Type in the name of the firm in the space provided，and review the recent news stories about the firm．Summarize any (at least one) recent news story about the firm that applies to one or more of the key concepts in this chapter． Case: Global Expansion by Linton Records Linton Records is a U.S. producer of recordings of soul music，which are sold in the United States and exported to Europe．A year ago, the company entered into a joint venture with a distributor in London to retail its records. It is planning to import British rock into the United States，as it has just entered into a strategic alliance with this distributorship. Sales are expected to increase 20 percent a year over first-year sales of ￡12.5 million. Linton receives payment for its exports in British pounds. The dollar has been weakening against the British pound． Linton Records has learned that its product line will be subject to a tariff on goods imported into Europe．The tariff is related to the European Union，the common market alliance that includes many European countries．The company has expressed concern because it believes that political intervention disrupts the free flow of trade as it exists in the United States． Management is developing a strategic alliance with a French manufacturer to produce compact discs for the entire operation. The company expects to cut production costs by 25 percent because of the French firm's advanced technology. In this strategic alliance, the French manufacturer will buy all its raw materials from a company in Bonn Germany. In addition to the distributorship in London，Linton Records plans to open new markets in six different countries in western Europe in the future. Questions 1 Discuss the primary reasons why Linton Records may benefit from its international business． 2 How will Linton Records be affected if the dollar weakens further? 3 Should music imported by U.S. firms from England be subjected to a tariff? Video Case：Global Business at Lonely Planet Lonely Planet provides resource guidebooks covering 230 countries．as well as an online forum where travelers can post their traveling experiences．People with a passion for travel are the target market for the guidebooks．Lonely Planet's goal is to produce books that show readers the “whole picture，” including that the world is multidimensional and not all happy．Because Lonely Planet has offices in many different countries，it has to develop an Internet marketing strategy that is customized for each country． Lonely Planet manager Howard Riley says that branding target market．is extremely important and is a way for the company to talk to the customer．For example，the book on China is available in Chinese as well as English. Riley maintains that the best way to handle global marketing is to allow travelers to see the same image of Lonely Planet no matter where they are in the world．Though he says that the term global no longer exists，he argues that there is a layer of “globalness” with an audience that shares a passion for travel．Hence，the objective of the marketing campaign is to “present the world” to readers around the world through the guidebooks．Riley observes that working for a global company makes you reassess all the assumptions about management you have formed in your home country．He says that managers have to be brave and take risks with marketing and that firms have to have a clear global message. Questions 1 How does Lonely Planet differentiate its brand from ifs competitors in global markets? 2 How can Lonely Planet use technology to advance its brand image around the world? 3 Why is branding critical for a firm like Lonely Planet? 4 What kinds of management challenges does Howard Riley face as a global manager? 5 How does being the manager of a global business differ fr6m being a manager of a domestic business in terms of establishing a brand image? Internet Application 1. http://www.countryreports.org In the drop-down screen, choose a country. What kinds of data are available? What can you learn about culture, economic conditions，and other characteristics that would help you do business in that country? 2． http://www.trading-safely.com. Look at the countries listed for which analysis is provided．What is the risk of Burundi? What is the risk of Finland? In which countries is the risk so high that you would be reluctant to do business there? 3． http://www.cia.gov/cia/publications/factbook. Look at the information provided by the U.S. Central Intelligence Agency．Select a country．How does the information provided help you make business decisions about that country? Dell’s Secret to Success G0 to http://www.reportgallery.corn and renew Dell's most recent annual report. Also，go to Dell's website (http://www.dell.com) and in the section “about Dell,” review the background material about Dell that relates to this chapter． Questions 1 Describe Dell’s growth in international markets. Does it appear that Dell's international business is growing? 2 Dell's website explains that it established a manufacturing facility in Ireland in 1990 just six years after the company was created) in order to serve Europe and Africa. What do you think motivated Dell to enter these new markets? 3 Dell's website explains that in 1996 it established a manufacturing facility in Malaysia to serve the Asia-Pacific region．Why do you think it decided not to use its Ireland facility to serve the Asia-Pacific region? In-Text Study Guide True or False 1．An important reason U.S. firms establish new businesses in less-developed countries is to capitalize on technological advantages． 2．The best way for affirm to stabilize its profits over time is to focus its efforts on producing and selling one specific product in one specific country． 3．Land and labor costs can vary significantly among countries. 4．U.S. firms that provide services are more likely to face strong foreign competition than firms that produce manufactured goods． 5．A tax placed on imported goods is called a tariff. 6．Competition among firms is usually more intense in communist economies than it is in capitalist economies． 7．A key advantage of socialist economies is the emphasis on keeping tax rates as low as possible． 8．A firm's performance in a foreign country is dependent on that country's economic growth． 9．If firms overestimate the economic growth in a particular country, they will normally overestimate the demand for their products in that country． 10．The values of most currencies are not allowed to change relative to the dollar． Multiple Choice 11. A country that has relatively low technology is termed a(n)： a) least-favored nation． b) post-communist country． c) pre-industrial nation． d) backward nation． e) developing country． 12. All of the following are important reasons why U. S. firms engage in international business except to： a) attract foreign demand. b) capitalize on technology. c) take advantage of lower taxes in socialist economies. d) use inexpensive labor and natural resources available in less-developed countries． e) diversify internationally． 13. A major reason U.S. firms want to achieve international diversification is that it： a) exposes them to cultural diversity． b) enables them to take big tax write-offs． c) helps them stabilize profits, thus reducing their risks. d) allows them to acquire more advanced technology． e) allows them to offer stock to foreign investors, thus increasing their financial base． 14. With the implementation of NAFTA in 1993： a) most trade restrictions between the United States, Canada，and Mexico were removed． b) European nations began using a common currency c) U.S. firms were encouraged to invest in the less-developed nations of Asia，Central America，and Africa. d) the World Bank was given the authority to set interest rates on international business loans． e) countries were no longer allowed to have trade deficits continue for more than three years． 15. A number of European nations recently agreed to share a common currency known as the： a) gifspen． b) francmarc． C)European pound． d) euro． e) NAFTA． 16 The purchase of foreign supplies by IBM is an example of a) direct foreign investment. b) exporting. c) importing. d) international licensing. e) a joint venture. 17 The U.S. government just imposed a numerical limit on the amount of widgets that may be imported, which is called a： a) quota. b) tariff. c) call rate. d) exchange factor. e) limit order. 18 A negative balance of trade is referred to as a a) trade deficit. b) trade surplus. c) favorable balance of payment. d) direct investment. e) hedge. 19 The sale of film produced by Kodak in the United States to Chinese firms is an example of： a) direct foreign investment b) exporting c) importing d) international licensing e) a Joint venture 20 When a firm in one country acquires or builds a subsidiary in another country, it is engaging in： a) arbitrage b) a joint venture c) foreign aid d) a forward contract e) direct foreign investment 21. A(n) _____is a strategic alliance in which a firm allows a foreign company to produce its products according to specific instructions. a) international cartel b) international licensing agreement c) joint venture d) international limited partnership e) limited liability contract 22. Under ____ the government owns most busi​nesses and decides what products to produce and in what quantity. a) socialism b) capitalism c) communism d) dualism e) pluralism 23. In a _____ economy, businesses are privately owned and profit-seeking entrepreneurs are free to start businesses they believe will serve the people’s needs. a) capitalist b) communist c) feudalist d) mercantilist e) pluralist 24. _____is an economic system that allows some pri​vate ownership of businesses and property but also has an active government sector and high tax rates to support the government’s programs. a) Socialism b) Capitalism c) Feudalism d) Mercantilism e) Dualism 25 In recent years governments of many nations have sold government-owned and-operated businesses to private investors This process is known as： a) public disinvestment b) privatization c) repatriation d) democratization e) public capitalization 26 The political and regulatory risks to a US firm operating in a foreign country include all of the following, except： a) inflation of the currency． b) higher tax rates for foreign subsidiaries c) taking over US companies without compensation d) strict pollution controls e) eviction from property． 27 The dollar weakens against the British pound if the value of the pound： a) depreciates. b) sells off. c) softens. d) appreciates. e) declines. 28 If the dollar depreciates relative to the Japanese yen： a) Japanese goods will seem cheaper to American importers b) gold will flow from the United States to Japan c) American goods will seem less expensive to Japanese consumers d) the dollar must appreciate relative to some other Asian currency． e) the US government will have to intervene to increase the value of the dollar． 29 One disadvantage of hedging is that it： a) is illegal in many foreign countries b) requires businesses to pay additional taxes on their earnings c) is considered unethical behavior by some investors d) prevents not only unfavorable, but also favorable changes in exchange rates e) greatly increases the risk of doing business in foreign countries 30 A states an exchange of currencies that will occur at a specified exchange rate at some future point in time a) reserve clause b) forward contract c) limit order d) market order e) fixed time exchange contract 31 When businesses take action to lock in a specific exchange rate for a future international transaction in order to reduce risk, their strategy is referred to as： a) rate fixing b) trading on reserve． c) selling short d) hedging e) trading on margin 32 If you plan to convert dollars to obtain Japanese yen today, you would pay the： a) spot rate b) open market rate c) discount rate d) hedge rate e) forward rate Answer the following questions： 1 Why might foreign competitors have an advantage over U.S. firms in some cases? 2 In which areas of the world have changes in economic and political conditions created opportunities for U.S. firms to more easily pursue international business? Provide specific examples. 3 Distinguish exporting from importing. Can a business such as DuPont be involved in both exporting and importing? How? 4 What is direct foreign investment (DFI)? Why should a company be particularly careful when engaging in DFI? 5 Identify and explain the various types of international alliances between U.S. firms and foreign firms. 6 Identify and briefly describe the foreign characteristics that can influence international business investments. 7 Discuss the advantages and disadvantages of foreign ownership in the United States. Are there any types of businesses that should not be sold to a foreign investor? 8 Assume you are a business entrepreneur. Do you support free trade among nations, or do you believe that there should be tariffs and quotas on imported goods? How would each position affect the U.S. economy? 9 Do you think Americans should buy U.S.-produced goods and services or foreign goods and services? Does either practice affect the U.S. balance of trade? Comment. 10 Discuss the implications of a stronger dollar in relation to other foreign currencies for (1) an exporter and (2) someone who is planning to travel to a foreign country. Are there differences between the two parties?