Question:
Which mode of international business should be chosen by a small business man and why?
Answer:
A small business should consider following factors in selecting mode of entering into international business.
- Ease of entry: First and foremost factor that determines the choice of mode of entry into international business is ease of entry. A businessman wants to adopt such mode of entry into international business which is easy and less formalities requiring. Exporting, importing, licensing and franchising are better ways from this perspective.
- Cost: Second determining factor is cost involved. For example, very less cost is involved in exporting, importing, licensing, franchising and contract manufacturing as compared to joint ventures and setting wholly owned subsidiaries.
- Control over production: If the foreign company or producer wants full control over production activities in local country, he will prefer franchising, wholly owned subsidiary or joint venture with majority share holding. If it is not so important, he will prefer exporting, importing, contract manufacturing licensing etc.
- Sharing of Technology: If the company has no problem in sharing of technology then it may choose joint venture or franchising. But if it does not want to share its technology and trade secrets, it will prefer wholly owned subsidiary or exporting.
- Risk Involved: If a firm is ready to take risk, it may choose wholly owned subsidiary or joint ventures but if it is willing to minimise its loss then it should choose exporting, licensing, franchising or contract manufacturing.
In my opinion, being a small businessman he will prefer exporting or licensing,franchising to other modes of business as it is easy, less costly, gives greater control over production and involves lesser risk.
International Business I
Q 1.
What is the share of India's exports in world exports?
Q 2.
Which mode of international business should be chosen by a small business man and why?
Q 3.
Explain different forms of Joint Ventures.
Q 4.
What are the major items that are exported from India?
Q 5.
Reebok orders for footballs to local manufacturers of Ludhiana and then sells it all over the world. It is an example of what?
Q 6.
Discuss the scope of international business.
Q 7.
Discuss as to why nations trade.
Q 8.
State the important changes being observed in composition of India's external trade since 2007-08.
Q 9.
What are the benefits of international trade to firms?
Q 10.
List the major countries with whom India trades.
Q 11.
Discuss the merits and demerits of entering into joint ventures.
Q 12.
Discuss meaning, merits and demerits of contract manufacturing.
Q 13.
India is_largest economy in the world.
Q 14.
Discuss any three advantages of international business.
Q 15.
When a middleman is involved in handling export procedure, then it is called by what name?
Q 16.
Licensee or franchisee pays a fee to licensor or franchisor. What is it called?
Q 17.
"International trade benefits both the parties involve."Do you agree? Justify your answer:
Q 18.
Which service has got dominating share in foreign trade in services?
Q 19.
Discuss the major trends in India's foreign trade. Also list the major products that India trades with other countries.
Q 20.
What is the basic reason behind international trade?
Q 21.
How is home trade different from external trade?
Q 22.
Why is it said that licensing is an easier way to expand globally?
Q 23.
List major items of India's import.
Q 24.
Write a short note on India's foreign investments.
Q 25.
"Foreign trade is not free from difficulties."Comment.
Q 26.
Give one point of difference between licensing and franchising.
Q 27.
What is the major reason under lying trade between nations?
Q 28.
Name the country whose share is largest in India's exports and imports.
Q 29.
Out of international trade and international business which one is wider in scope?
Q 30.
Discuss meaning, merits and demerits of contract manufacturing.
Q 31.
Enumerate limitations of contract manufacturing.
Q 32.
India embarks on the path of globalisation. Comment
Q 33.
Discuss the benefits of international business.
Q 34.
What benefits do firms derive by entering into international business?
Q 35.
"International business is more than international trade". Comment.
Q 36.
In what ways is exporting a better way of entering into international markets than setting up wholly owned subsidiaries abroad.
Q 37.
"Wholly owned subsidiary is a more investing, more risky and less return giving venture."Do you agree? Substantiate your answer.
Q 38.
Discuss briefly the factors that govern the choice of mode of entry into international business.
Q 39.
Explain different forms of contract manufacturing.
Q 40.
Define international business.
Q 41.
Differentiate between international trade and international business.
Q 42.
What is invisible trade? Discuss salient aspects of India's trade in services.
Q 43.
Differentiate between contract manufacturing and setting up wholly owned production subsidiary abroad.
Q 44.
Distinguish between licensing and franchising.
Q 45.
What is international business? How is it different from domestic business?
Q 46.
Licensing and franchising are suitable in different situations. Explain how?
