Advantages of Eurocurrency Market

							BUSA 6950-A    Exam 3/4      Essay Review Questions        D. Howard         8/6/04


  1. Can firms that expand globally increase their profitability in ways that are not
     available to them in domestic markets? What are the constraints on taking full
     advantage of the potential for increasing profits in international markets?


  2. Firms that compete in global markets often face pressures for local
     responsiveness. Describe what is meant by local responsiveness, and identify the
     underlying reasons that local responsiveness pressures exist.


  3. Describe the four basic strategies that firms use to compete in international
     markets. Which strategy is the best?


  4. Describe the differences between control systems and incentives. Are incentives
     tied to performance metrics? If so, how?


  5. What is determined by a firm’s vertical differentiation? (Provide several examples
     of organizational issues that are determined by a firm’s vertical differentiation).


  6. What are the arguments for the centralization of decision making?


  7. What are the arguments for decentralization?


  8. Under what conditions are worldwide area structures and worldwide product
     division structures appropriate? Briefly describe the strengths and weaknesses of
     each structure.


  9. What causes performance ambiguity?


  10. Describe the differences between first-mover advantages and first-mover
      disadvantages.


  11. What are the six different ways for a firm to enter a foreign market? Provide a
      brief description of each of these foreign market entry strategies.
12. What is the difference between an acquisition and a green-field strategy?



13. What are strategic alliances? Are strategic alliances on the rise or decline?


14. What is an export management company? What should a company do before it
    hires an export management company to help with its export operations?


15. Describe the mechanisms for financing exports and imports. Do you believe that
    the complexity of export financing deters small firms from becoming involved in
    exporting? Explain your answer.


16. What is Export-Import Bank? What is its mission?


17. What are the pros and cons of countertrade?


18. Why do we have capital markets? What is their function? Who are the “market
    makers” in capital markets?


19. Why are international capital markets needed? What functions do they provide
    beyond that available in most domestic markets – and especially domestic
    markets as big as the U.S. and Japan?


20. What is Eurocurrency? What are Eurodollars? Why is the term Eurocurrency a
    misnomer?


21. What are the drawbacks or disadvantages of the Eurocurrency market?


22. What are the two drawbacks of the Eurocurrency market?


23. What is the experience curve? How can an involvement in overseas markets help
    a firm capture experience curve advantages more rapidly?