Chapter 11

Question 1

Small and medium-sized enterprises (SMEs):

Answer 1

Firms with fewer than 500 employees

Question 2

Start-up companies:

Answer 2

Young firms that have only recently been formed

Question 2

Entrepreneur:

Answer 2

Leader identifying opportunities and taking decisions to export them

Question 3

Entrepreneurial team:

Answer 3

A group of people jointly acting as entrepreneurs

Question 4

Exporters:

Answer 4

Sellers of products or services to another country

Question 5

Importers:

Answer 5

Buyers of goods and services from another country

Question 6

Direct exports:

Answer 6

The sale of products made by firms in their home country to customers in other
countries

Question 7

Airway bill (AWL)

Answer 7

Document issued by and airline to certify receipt of merchandise. Contrary to B/L, it doesn’t entail a legal title to the products

Question 8

Bill of landing (B/L)

Answer 8

Document issued by a courier or shipping company certifying that the merchandise has been delivered and paid for. Only the person holding the B/L has the right to claim the products

Question 9

Letter of credit (L/C)

Answer 9

A document certifying that the importer’s bank will pay a specific sum of money to the exporter upon delivery of the merchandise
=> A Letter of Credit is a guarantee from the buyer’s (importer’s) bank that the seller (exporter) will get paid, as long as they meet the terms

Question 10

CIF: Cost, insurance & freight

Answer 10

The seller pays all costs of transport, including insurance and freight

Question 11

DDP: Delivery duty paid

Answer 11

The seller will deliver the goods to a specified place and pay the necessary customs duties

Question 12

EXW: Ex works

Answer 12

Buyer has to pick up the goods from the seller’s specified factory or warehouse

Question 13

FOB: Free on board

Answer 13

The seller delivers the goods on board a boat or train but doesn’t pay for the transport

Question 14

Indirect exports:

Answer 14

A way for SMEs to reach overseas customers by exporting through domestic-
based export intermediates

Question 15

Export intermediates:

Answer 15

A firm that performs an important intermediary function linking sellers and
buyers overseas

Question 16

Sales agent:

Answer 16

Intermediaries receiving commission for sales

Question 17

Distributors:

Answer 17

Intermediaries trading on their own account

Question 18

Cross-border services:

Answer 18

Supplying services across national borders

Question 19

Servicing foreign residents:

Answer 19

Supplying services to customers coming from abroad

Question 20

Licensing:

Answer 20

A contract by which a firm allows another form to use its intellectual property rights in
return for a fee

Question 21

Licensor:

Answer 21

The company granting a licence

Question 22

Licensee:

Answer 22

The company receiving licence

Question 23

Franchising:

Answer 23

A contract by which a firm allows another firm to use its branded service or
products in return for a fee
=> Next to the core product pr service, franchising may encompass trademark, marketing strategy, operation manuals, or quality control procedures
=> Franchising typically covers entire business concepts

Question 24

Turnkey projects:

Answer 24

Projects in which clients pay contractors to design and construct new facilities and train personnel

Question 25

Design-and-build contract:

Answer 25

A contract combining the architectural or design work with the actual construction

Question 26

Build-operate-transfer:

Answer 26

A contract combining the construction and temporary operation of a project eventually to be transferred to a new owner

Question 27

Consortium:

Answer 27

A project-based temporary business owned and managed jointly by several firms

Question 28

Subcontracting:

Answer 28

A contract that involves outsourcing of an intermediate stage of a value chain

Question 29

R&D contract:

Answer 29

A subcontracting of R&D between firms

Question 30

Management contract:

Answer 30

A contract over the management of assets or a firm owned by someone else

Question 31

Experimental knowledge:

Answer 31

Knowledge learned by engaging in the activity and context

Question 32

Uppsala model:

Answer 32

A model of internalisation processes focusing on learning processes => gradual learning-based internalisation => internalisation is a process of incremental decisions => Provides a good explanation of patterns of internalisation in the 1950s to 1980s => Internalisation is a dynamic process of learning

Question 33

Network internalisation model:

Answer 33

A model of internalisation that focuses on the international growth of business networks => expand abroad through relationships and networks, rather than just through firm size, resources, or market knowledge

Question 34

Building resources for international business => Traditional processes

Answer 34

- Experimental learning and knowledge acquisition - Network building and exploitation

Question 35

Building resources for international business => Accelerated process

Answer 35

- Recruiting an entrepreneurial team with international experience - Learning by importing and partnering with inward foreign investors - Learning from others operating in the same foreign country - Acquiring resources in the foreign country, possibly entire firms

Question 36

Stages model:

Answer 36

Models depicting internalisation as a slow stage-by stage process an SME must go through

Question 37

International new venture:

Answer 37

Start-up company that from inception, seeks to derive significant competitive advantages from the use of resources and the sale of outputs in multiple countries

Question 38

International experience:

Answer 38

Personal experience of living in another country

Question 39

Immigrant entrepreneurs:

Answer 39

People who set up a business after migrating to another country

Question 40

Mimetic behaviour:

Answer 40

Imitating the behaviour of others as a means to reduce uncertainty

Question 41

E-businesses:

Answer 41

Businesses that create and coordinate the value chain of their business online

Question 42

Digital platform:

Answer 42

Online space where potential buyers and sellers can meet

Question 43

A wide variety of contracts is available to combine different transfers of goods, services and rights, including:

Answer 43

(1) licensing, (2) franchising, (3) turnkey projects, (4) subcontracting and (5) management contracts

Question 44

Tender

Answer 44

A competition for a major contract => A tender is a formal process where organizations (usually governments or large companies) invite suppliers or contractors to submit bids to win a project or supply goods/services.