Retailing Management Canadian 4th Edition Levy Test Bank

Retailing Management Canadian 4th
Edition Levy Test Bank

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c7
Student: ___________________________________________________________________________
1. Based on 2011 retail sales, the 3 largest retailers in the world are:
A. Walmart, Target, Costco
B. Costco, Loblaws, Shoppers Drug Mart
C. Walmart, Carrefour, Tesco
D. Walmart, Target, Kroger
E. Walmart, Carrefour, Loblaws
2. A joint venture:
A. is formed when the entering retailer pools its resources with a local retailer to form a new company in which
ownership, control, and profits are shared
B. involves a retail firm investing in and owning a division or subsidiary that builds and operates stores in a
foreign country
C. increases the entrant's risks
D. offers the lowest risk and requires the least investment
E. is NONE of these
3. Some core competitive advantages for global retailers include:

A. Adaptability
B. Recognize cultural differences
C. Global culture
D. Financial resources
E. All of these
4. Which of the following Canadian retailers have been successful in foreign markets?
A. Loblaws
B. Canadian Tire
C. Shoppers Drug Mart
D. Aldo
E. Future Shop
5. The failure of Canadian retailers in the U.S. market has been due to:
A. failing to conduct adequate research
B. not devoting enough money to the market entry
C. underestimating the competitiveness of the U.S. market
D. both failing to conduct adequate research and not devoting enough money to the market entry
E. all of these
6. International expansion is risky because of differences in:

A. supply chains
B. languages
C. culture
D. government regulations
E. all of these
7. Which of the following countries offers the poorest local growth opportunity (based on an aging population)
for Canadian retailers wishing to expand?
A. Taiwan
B. Mexico
C. Chile
D. India
E. China
8. Which of the following would discourage retailers from entering foreign markets?
A. Trade agreements (e.g. NAFTA)
B. Aggressive competition
C. Younger populations
D. Growing numbers of middle-class consumers
E. Favourable operating costs
9. Bawadi in Dubailand will offer all of the following except:

A. a hotel & shopping strip
B. an entertainment complex
C. a university
D. a convention centre
E. a residential complex
10. A characteristic of retailers which have successfully exploited international growth opportunities is:
A. adaptability
B. large staff
C. government connections
D. risk-taking
E. diversification
11. What do retailers have to adapt for foreign markets?

A. Product colours and store designs
B. Work schedules
C. Peak selling seasons
D. Store design and layout
E. All of these
12. How may retailers enter foreign country markets?

A. Franchising
B. Joint ventures
C. Strategic alliance
D. Both franchising and joint ventures
E. All of these
13. The foreign market entry method with the lowest risk is:
A. franchising
B. a strategic alliance
C. a joint venture
D. direct investment
E. owning a division or subsidiary in a foreign country
14. A retailer owns a division or subsidiary that builds and operates stores in a foreign country under:
A. franchising
B. a joint venture
C. a strategic alliance
E. exporting
15. In terms of sales, the largest retailer in the world is:
A. Costco
B. Carrefour
C. Sears
D. Walmart
E. Home Depot
16. In what sector are the majority of the largest global retailers involved?
A. Automobiles
B. Auto parts
C. Food
D. Apparel
E. Furniture
17. The greatest retail density and concentration of large retail firms is in:
A. The USA
B. Canada
C. The UK
D. France
E. Japan
18. Using a multinational strategy, retailers will/can:

A. replicate their standard retail format and centralized management throughout the world in each new market.
B. change their products and image to reflect the international marketplace.
C. develop franchising initiatives based on its standardized form of doing business in return for a substantial
franchise fee.
D. follow the international marketing practices of McDonald's, The Gap and The Body Shop.
E. expand rapidly but are learning little from their internationalization.
19. Which of the following is a valid example of costs associated with global sourcing decisions?
A. To reduce the effects of currency fluctuations retailers avoid the use of financial instruments such as options
and futures contracts.
B. For American retailers in the U.S.A., inventory turnover is likely to be higher when purchasing from
suppliers outside the United States than from domestic suppliers.
C. The legal-political system in foreign countries should never impact the human resource management
practices that retailers can use in those countries.
D. If, for example, the Indian rupee increases relative to the Canadian dollar, the cost of private-label merchan-
dise produced in India and imported for sale into Canada will decrease.
E. If, for example, the Indian rupee decreases relative to the Canadian dollar, the cost of private-label merchan-
20. Tariffs, also known as ______________, are taxes placed by a government on imports that increase the cost
of merchandise imported from international sources.
________________________________________
21. ________________ prompted American big-box retailers and category killers to expand into Canada.
________________________________________
22. The need for a retailer to change its core strategy to fit global markets is the characteristic of
________________.
________________________________________
23. When a retailer pools its resources with a local retailer in a foreign country, forming a new company in
which ownership, control, and profits are shared, it has entered a/an ____________________.
________________________________________
24. The market entry strategy which offers the lowest risk as per the text is _______________.
________________________________________
25. Retailers which replicate their standard retail format and centralized management in each new foreign
market are using a/an ___________________ strategy.
________________________________________
26. North America's largest shopping mall is ___________________________.

________________________________________
27. The majority of the largest global retailers are involved in the ____________ sector.
________________________________________
28. _____________________ is the world's largest retailer.

________________________________________
29. What are the main differences between a "global" and a "multinational" strategy?
30. What are some problems encountered by Canadian retailers which experienced failure when they expanded
into the American market?
31. Why is international expansion risky for retailers?
32. What are some factors which would encourage retailers to enter the international marketplace?
33. What is Bawadi supposed to achieve according to Dubai's Strategic Plan 2015?
34. Identify and explain four common characteristics of retailers which have succeeded in international
markets?
35. What foreign market entry methods are available to retailers when expanding?
36. What cautious strategies have allowed Canadian retailers to be successful in the American market?
37. Why is it predicted that in the future the North American economy will be much slower growing?
38. What is a globally sustainable competitive advantage?

39. Why do global retailers need "deep pockets"?
40. What is an advantage of foreign market direct investment to Canadian retailers?

What is a disadvantage of this method?
41. What are the advantages of a foreign market joint venture to Canadian retailers?
42. What makes global site location decisions more difficult for market entrants?
43. What is a geographic difference in retail real estate development in Japan and Europe compared to Canada?
c7 Key
1. Based on 2011 retail sales, the 3 largest retailers in the world are:
A. Walmart, Target, Costco
B. Costco, Loblaws, Shoppers Drug Mart
C. Walmart, Carrefour, Tesco
D. Walmart, Target, Kroger
E. Walmart, Carrefour, Loblaws
Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 07-06 Explore the top 250 global retailers.
Levy - Chapter 07 #1
2. A joint venture:
A. is formed when the entering retailer pools its resources with a local retailer to form a new company in which
ownership, control, and profits are shared
B. involves a retail firm investing in and owning a division or subsidiary that builds and operates stores in a
foreign country
C. increases the entrant's risks
D. offers the lowest risk and requires the least investment
E. is NONE of these

Difficulty: Medium
Learning Objective: 07-04 Identify strategic decisions that must be considered when entering the international marketplace.
3. Some core competitive advantages for global retailers include:

A. Adaptability
B. Recognize cultural differences
C. Global culture
D. Financial resources
E. All of these

Difficulty: Easy
Learning Objective: 07-03 Review the four characteristics of retailers that have successfully exploited international growth opportunities.
4. Which of the following Canadian retailers have been successful in foreign markets?
A. Loblaws
B. Canadian Tire
C. Shoppers Drug Mart
D. Aldo
E. Future Shop

Difficulty: Easy
Learning Objective: 07-01 Examine Canada's changing retail marketspace.
5. The failure of Canadian retailers in the U.S. market has been due to:
A. failing to conduct adequate research
B. not devoting enough money to the market entry
C. underestimating the competitiveness of the U.S. market
D. both failing to conduct adequate research and not devoting enough money to the market entry
E. all of these

Difficulty: Medium
6. International expansion is risky because of differences in:

A. supply chains
B. languages
C. culture
D. government regulations
E. all of these

Difficulty: Easy
Learning Objective: 07-02 Review the factors in the marketplace that would encourage a move to international retail expansion.
7. Which of the following countries offers the poorest local growth opportunity (based on an aging population)
for Canadian retailers wishing to expand?
A. Taiwan
B. Mexico
C. Chile
D. India
E. China

Difficulty: Medium
8. Which of the following would discourage retailers from entering foreign markets?
A. Trade agreements (e.g. NAFTA)
B. Aggressive competition
C. Younger populations
D. Growing numbers of middle-class consumers
E. Favourable operating costs

Difficulty: Medium
9. Bawadi in Dubailand will offer all of the following except:

A. a hotel & shopping strip
B. an entertainment complex
C. a university
D. a convention centre
E. a residential complex

Difficulty: Easy
10. A characteristic of retailers which have successfully exploited international growth opportunities is:
A. adaptability
B. large staff
C. government connections
D. risk-taking
E. diversification

Difficulty: Easy
11. What do retailers have to adapt for foreign markets?

A. Product colours and store designs
B. Work schedules
C. Peak selling seasons
D. Store design and layout
E. All of these

Difficulty: Medium
12. How may retailers enter foreign country markets?

A. Franchising
B. Joint ventures
C. Strategic alliance
D. Both franchising and joint ventures
E. All of these

Difficulty: Easy
13. The foreign market entry method with the lowest risk is:
A. franchising
B. a strategic alliance
C. a joint venture
E. owning a division or subsidiary in a foreign country

Difficulty: Medium
14. A retailer owns a division or subsidiary that builds and operates stores in a foreign country under:
A. franchising
B. a joint venture
C. a strategic alliance
E. exporting

Difficulty: Medium
15. In terms of sales, the largest retailer in the world is:

A. Costco
B. Carrefour
C. Sears
D. Walmart
E. Home Depot

Difficulty: Easy
16. In what sector are the majority of the largest global retailers involved?
A. Automobiles
B. Auto parts
C. Food
D. Apparel
E. Furniture

Difficulty: Medium
17. The greatest retail density and concentration of large retail firms is in:
A. The USA
B. Canada
C. The UK
D. France
E. Japan

Difficulty: Easy
18. Using a multinational strategy, retailers will/can:
A. replicate their standard retail format and centralized management throughout the world in each new market.
B. change their products and image to reflect the international marketplace.
C. develop franchising initiatives based on its standardized form of doing business in return for a substantial
franchise fee.
D. follow the international marketing practices of McDonald's, The Gap and The Body Shop.
E. expand rapidly but are learning little from their internationalization.

Difficulty: Medium
Learning Objective: 07-05 Discuss the differences between a global retailer and a multinational retailer.
19. Which of the following is a valid example of costs associated with global sourcing decisions?
A. To reduce the effects of currency fluctuations retailers avoid the use of financial instruments such as options
and futures contracts.
B. For American retailers in the U.S.A., inventory turnover is likely to be higher when purchasing from
suppliers outside the United States than from domestic suppliers.
C. The legal-political system in foreign countries should never impact the human resource management
practices that retailers can use in those countries.
D. If, for example, the Indian rupee increases relative to the Canadian dollar, the cost of private-label merchan-
E. If, for example, the Indian rupee decreases relative to the Canadian dollar, the cost of private-label merchan-

Difficulty: Hard
20. Tariffs, also known as ______________, are taxes placed by a government on imports that increase the cost
of merchandise imported from international sources.
duties
Difficulty: Easy
21. ________________ prompted American big-box retailers and category killers to expand into Canada.
NAFTA
Difficulty: Easy
22. The need for a retailer to change its core strategy to fit global markets is the characteristic of
________________.
adaptability
Difficulty: Easy
23. When a retailer pools its resources with a local retailer in a foreign country, forming a new company in
which ownership, control, and profits are shared, it has entered a/an ____________________.
joint venture
Difficulty: Medium
24. The market entry strategy which offers the lowest risk as per the text is _______________.
franchising
One should consider the answer of "exporting" as being a suitable response
Difficulty: Medium
25. Retailers which replicate their standard retail format and centralized management in each new foreign
market are using a/an ___________________ strategy.
global
Difficulty: Easy
26. North America's largest shopping mall is ___________________________.

the West Edmonton Mall
Difficulty: Easy
27. The majority of the largest global retailers are involved in the ____________ sector.
food
Difficulty: Easy
28. _____________________ is the world's largest retailer.

Walmart
Difficulty: Easy
29. What are the main differences between a "global" and a "multinational" strategy?
A global strategy means that they replicate their standard retail format and centralized management throughout
the world in each new market, while retailers using a multinational strategy use a decentralized format, learning
about the country's culture and changing their retail concept to adapt to cultural differences and cater to local
market demands.
Difficulty: Medium
30. What are some problems encountered by Canadian retailers which experienced failure when they expanded
into the American market?
Some problems were: (1) underestimating the level of competition in the USA; (2) not conducting adequate
research of the market; and (3) not allocating enough financial resources to the market entry.
Difficulty: Medium
31. Why is international expansion risky for retailers?
International expansion is risky because retailers must deal with differences in government regulations,
consumer preferences, cultural traditions, languages, and supply chains.
Difficulty: Medium
32. What are some factors which would encourage retailers to enter the international marketplace?
Factors would include: (1) limited competition in the international markets; (2) increasing size of the
middle-class market with improving standard of living; (3) a young population with purchasing power; (4) trade
agreements, removing entry barriers; (5) relaxed regulations; (5) favourable operating costs, and taxes; and (6)
opportunities to diversify and try innovative concepts.
Difficulty: Hard
33. What is Bawadi supposed to achieve according to Dubai's Strategic Plan 2015?
As part of Dubai's Strategic Plan 2015, the world's largest shopping area will provide support to the tourism and
hospitality industry, which in turn will play a major role in the diversification and development of Dubai's
economy.
Difficulty: Medium
34. Identify and explain four common characteristics of retailers which have succeeded in international
markets?
Four characteristics are: (1) competitive advantage in areas such as low cost, operations efficiencies, private
brands, fashion reputation, category dominance, or image; (2) adaptability in areas such as cultural differences,
selling seasons, store design, and store operations; (3) global culture, meaning thinking and operating globally,
but acting locally in management and operations; and (4) deep pockets for long-term planning and commitment
as international markets are developed.
Difficulty: Medium
35. What foreign market entry methods are available to retailers when expanding?
Retailers could consider: (1) direct investment—investing in and owning a division or subsidiary that builds and
operates stores in foreign markets; (2) joint venture—combining resources with a local retailer to form a new
company in which ownership, control, and profits are shared; (3) strategic alliance—developing a collaboration
with a local company to perform certain marketing functions for the new entrant; and (4) franchising—granting
the right to a local retailer to operate a retail chain using operations, store design, products, and brands
developed and owned by the new entrant, and paid for via royalties on sales.
Difficulty: Easy
36. What cautious strategies have allowed Canadian retailers to be successful in the American market?
Success has been found through acquisition of existing American retailers, or developing a unique product mix
which consumers demand.
Difficulty: Medium
37. Why is it predicted that in the future the North American economy will be much slower growing?
The population is ageing, and will not be spending as much on consumer goods.
Difficulty: Medium
38. What is a globally sustainable competitive advantage?
An advantage which is based on what the retailer does well, such as: low cost operations, strong private brands,
fashion reputation, or category dominance, and is extended to the foreign market.
Difficulty: Medium
39. Why do global retailers need "deep pockets"?
Financial strength is required due to the long-term commitment and initial planning, and the difficulty of
generating short-term profit when first entering foreign markets.
Difficulty: Medium
40. What is an advantage of foreign market direct investment to Canadian retailers?

An advantage is the company's complete control of operations. A disadvantage is the high investment and,
therefore, high risk involved.
Difficulty: Medium
41. What are the advantages of a foreign market joint venture to Canadian retailers?
Advantages are the reduced risk to the entrant, the market knowledge of the local partner, and the local partner's
access to vendors and real estate. A disadvantage is the relatively high investment along with the risk that can
arise if the partners disagree or the government places restrictions on the repatriation of profits.
Difficulty: Medium
42. What makes global site location decisions more difficult for market entrants?
Canadian management is not as familiar with nuances of foreign location issues as they would be with Canadian
location decisions. Also, they would not have a close working relationship with real estate developers as they do
at home.
Difficulty: Medium
43. What is a geographic difference in retail real estate development in Japan and Europe compared to Canada?
Population density is higher in Japan and Europe than Canada, and thus, Europe and Japan have less low-cost
real estate available for building large stores.
Difficulty: Hard
c7 Summary
Category # of Question
s
Accessibility: Keyboard Navigation 19
Difficulty: Easy 16
Difficulty: Hard 3
Difficulty: Medium 24
Learning Objective: 07-01 Examine Canada's changing retail marketspace. 5
Learning Objective: 07-02 Review the factors in the marketplace that would encourage a move to international retail expansion. 11
Learning Objective: 07-03 Review the four characteristics of retailers that have successfully exploited international growth opport 6
unities.
Learning Objective: 07-04 Identify strategic decisions that must be considered when entering the international marketplace. 11
Learning Objective: 07-05 Discuss the differences between a global retailer and a multinational retailer. 4
Learning Objective: 07-06 Explore the top 250 global retailers. 6
Levy - Chapter 07 43

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Retailing Management Canadian 4th Edition Levy Test Bank

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Retailing Management Canadian 4th

Edition Levy Test Bank

3. Some core competitive advantages for global retailers include:

6. International expansion is risky because of differences in:

9. Bawadi in Dubailand will offer all of the following except:

11. What do retailers have to adapt for foreign markets?

12. How may retailers enter foreign country markets?

18. Using a multinational strategy, retailers will/can:

26. North America's largest shopping mall is ___________________________.

28. _____________________ is the world's largest retailer.

31. Why is international expansion risky for retailers?

38. What is a globally sustainable competitive advantage?

40. What is an advantage of foreign market direct investment to Canadian retailers?

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

3. Some core competitive advantages for global retailers include:

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

6. International expansion is risky because of differences in:

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

9. Bawadi in Dubailand will offer all of the following except:

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

11. What do retailers have to adapt for foreign markets?

Accessibility: Keyboard Navigation

12. How may retailers enter foreign country markets?

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

15. In terms of sales, the largest retailer in the world is:

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

Accessibility: Keyboard Navigation

One should consider the answer of "exporting" as being a suitable response

26. North America's largest shopping mall is ___________________________.

28. _____________________ is the world's largest retailer.

31. Why is international expansion risky for retailers?

38. What is a globally sustainable competitive advantage?

40. What is an advantage of foreign market direct investment to Canadian retailers?

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