3.9.3 Assessing internationalisation

• Diversifying risk is a key reason for internationalisation.


  True
• Steps to assess internationalisation factors in order:

  1️⃣ Evaluate Market Potential

  2️⃣ Review Resources & Capabilities

  3️⃣ Consider Entry Modes

  4️⃣ Assess Risks
• Evaluating internationalisation factors helps businesses determine if and how to effectively expand operations.


  True
• One reason a business may internationalise is to access new markets
• When assessing internationalisation, businesses should consider key factors such as market potential
• What are some entry modes for internationalisation?

  Exporting, licensing, joint ventures
• What are the four key factors businesses must consider when assessing internationalisation?

  Market Potential, Resources, Entry Modes, Risks
• Secondary research involves analyzing existing data
• Order the following market research methods based on their typical sequence in assessing internationalisation opportunities.

  1️⃣ Secondary Research

  2️⃣ Primary Research

  3️⃣ Pilot Testing

  4️⃣ Competitor Analysis
• Match the financial ratio or metric with its significance.

  Net Profit Margin ↔️ Profitability after all expenses

  Debt-to-Equity Ratio ↔️ Balance between debt and equity

  Current Ratio ↔️ Ability to cover short-term liabilities
• Foreign Direct Investment (FDI) is an example of an entry mode
• Competitor analysis evaluates the strategies and market positions of existing competitors
• Match the internationalisation metric with its significance and related factor.

  ROI ↔️ Measures return on investment, relates to market potential

  Market Share ↔️ Indicates competitiveness, relates to entry modes

  Cost Reduction ↔️ Reflects operational efficiency, relates to resources
• Market research methods help businesses evaluate market potential, risks, and entry modes for internationalisation.


  True
• Return on Investment (ROI) measures the efficiency of capital invested in international operations.


  True
• Market potential is a key factor to consider when assessing internationalisation.


  True
• Pilot testing involves launching a large-scale product rollout in a new market.

  False
• The Net Profit Margin shows a company's profitability after accounting for all expenses.


  True
• What is the process of expanding a business's operations and markets to other countries called?

  Internationalisation
• What is one advantage of internationalisation in terms of costs?

  Lower production costs
• Match the factor with its considerations:

  Market Potential ↔️ Size, growth, competition

  Resources & Capabilities ↔️ Financial, operational, managerial
• Market Potential includes considerations such as the size, growth, and cultural factors
• Match the factor with its assessment criteria:

  Market Potential ↔️ Competition, regulations, cultural factors

  Resources & Capabilities ↔️ Financial, operational, managerial

  Entry Modes ↔️ Exporting, licensing, joint ventures

  Risks ↔️ Political, economic, legal
• What is the purpose of primary research in internationalisation assessment?

  Gather first-hand insights
• Financial ratios and metrics help businesses evaluate their financial health and profitability in foreign markets
• What are three key reasons a business may choose to internationalise?

  Access new markets, reduce costs, diversify risk
• What is the purpose of primary research in international market assessment?

  Gather first-hand insights
• What does the Return on Investment (ROI) measure in international operations?

  Efficiency of capital invested
• What does compliance rate measure in international operations?

  Adherence to legal and regulatory requirements