PepsiCo leads Coca-Cola in the Indian market. Why?

PepsiCo leads Coca-Cola in the Indian market. Why? 

A. PepsiCo entered the market before Coca-Cola.

B. PepsiCo formed a joint venture with two Indian companies to introduce its products under their label.

C. Coca-Cola promoted too many products.

D. Coca-Cola created too much direct employment in the beginning of its operation.

Answer: B

_________ are most appropriate when a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries.

_________ are most appropriate when a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries. 

A. Joint ventures

B. Strategic alliances

C. Licensing agreements

D. Wholly owned subsidiaries

Answer: D

A __________ is a business in which a multinational company owns 100 percent of the stock.

A __________ is a business in which a multinational company owns 100 percent of the stock. 

A. joint venture

B. strategic alliance

C. wholly owned subsidiary

D. franchising operation

Answer: C

________ entail the creation of a third-party legal entity, whereas __________ do not.

________ entail the creation of a third-party legal entity, whereas __________ do not. 

A. Licensing agreements; joint ventures

B. Joint ventures; strategic alliances

C. Strategic alliances; joint ventures

D. Franchising agreements; strategic alliances

Answer: B

The difference between a franchise contract and a licensing contract is that ___________.

The difference between a franchise contract and a licensing contract is that ___________. 

A. a franchise contract is more specific and usually longer in duration

B. a franchise contract must include a foreign government

C. a licensing contract covers more aspects of operations

D. a franchise contract involves less control and less risk

Answer: A

Fees that a multinational receives from a foreign licensee in return for its use of intellectual property (trademark, patent, trade secret, technology) are usually called _____________.

Fees that a multinational receives from a foreign licensee in return for its use of intellectual property (trademark, patent, trade secret, technology) are usually called _____________. 

A. transfer prices

B. dividends

C. royalties

D. intra-corporate inflows


Answer: C