INTERNATIONAL LOGISTICS EXAM 2 QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
Methods of Entry into Foreign Markets - Answers Strategies companies use to sell products in foreign
markets such as exporting licensing franchising joint ventures or subsidiaries.
Factors When Entering a Foreign Market - Answers Market size and growth potential market share
product type marketing strategy international commitment importing country characteristics and
investment time horizon.
Indirect Exporting - Answers When a firm sells domestically and another company handles
international trade activities.
Export Trading Company (ETC) - Answers A company that buys goods in one country takes ownership
and resells them in another country.
Export Management Corporation (EMC) - Answers A company that represents exporters and finds
buyers abroad without taking title to the goods and earns commission.
Piggybacking - Answers When a small company exports using another firm's international distribution
network.
Active Exporting - Answers When a company actively searches for foreign markets and sells directly
to international customers.
Agent - Answers A representative located in the importing country who sells products for the
exporter but does not take ownership.
Distributor - Answers A foreign company that purchases goods from the exporter takes title and
resells them for profit.
Marketing Subsidiary - Answers A foreign office owned by the exporter that operates as a separate
company to manage sales in a foreign country.
Manufacturing Abroad - Answers Producing goods in a foreign country instead of exporting them.
Contract Manufacturing - Answers A foreign firm produces goods for the exporter usually to reduce
transportation costs or avoid trade barriers.
Licensing - Answers A contract where a firm allows another company to use its patents trademarks or
technology in exchange for royalties.
Franchising - Answers A form of licensing where the franchisor provides the entire business system
including brand training operations and marketing.
Joint Venture (JV) - Answers A business owned by two or more companies that share resources risks
and profits.
Wholly Owned Subsidiary - Answers A foreign company that is completely owned and controlled by
the parent firm.
Parallel Imports (Gray Market) - Answers Goods purchased in one country and resold in another
country where prices are higher.
Counterfeit Goods - Answers Fake products made to imitate legitimate branded products.
Foreign Trade Zone (FTZ) - Answers A designated area where goods can enter without paying duties
until they officially enter the country.
Foreign Corrupt Practices Act (FCPA) - Answers A U.S. law that prohibits bribing foreign government
officials to obtain business.
Lex Mercatoria - Answers The body of international trade laws customs and practices governing
international commercial transactions.
Sources of Lex Mercatoria - Answers United Nations conventions WTO agreements and international
trade practices.
CISG (Convention for the International Sale of Goods) - Answers A United Nations treaty adopted in
1980 that provides uniform rules for international sales contracts.
Purpose of CISG - Answers To standardize rules for international sales contracts across participating
countries.
Contract Formation Under CISG - Answers Offer acceptance rejection and counteroffer.
Offer - Answers When one party proposes a sale to another party.
Acceptance - Answers When the other party agrees to all terms of the offer.
Rejection - Answers When the receiving party refuses the offer.
Counteroffer - Answers A new offer made with different terms than the original offer.
CISG vs UCC Difference - Answers Under CISG a positive response with changes is a rejection while
under UCC it may be acceptance.
Methods of Entry into Foreign Markets - Answers Strategies companies use to sell products in foreign
markets such as exporting licensing franchising joint ventures or subsidiaries.
Factors When Entering a Foreign Market - Answers Market size and growth potential market share
product type marketing strategy international commitment importing country characteristics and
investment time horizon.
Indirect Exporting - Answers When a firm sells domestically and another company handles
international trade activities.
Export Trading Company (ETC) - Answers A company that buys goods in one country takes ownership
and resells them in another country.
Export Management Corporation (EMC) - Answers A company that represents exporters and finds
buyers abroad without taking title to the goods and earns commission.
Piggybacking - Answers When a small company exports using another firm's international distribution
network.
Active Exporting - Answers When a company actively searches for foreign markets and sells directly
to international customers.
Agent - Answers A representative located in the importing country who sells products for the
exporter but does not take ownership.
Distributor - Answers A foreign company that purchases goods from the exporter takes title and
resells them for profit.
Marketing Subsidiary - Answers A foreign office owned by the exporter that operates as a separate
company to manage sales in a foreign country.
Manufacturing Abroad - Answers Producing goods in a foreign country instead of exporting them.
Contract Manufacturing - Answers A foreign firm produces goods for the exporter usually to reduce
transportation costs or avoid trade barriers.
Licensing - Answers A contract where a firm allows another company to use its patents trademarks or
technology in exchange for royalties.
Franchising - Answers A form of licensing where the franchisor provides the entire business system
including brand training operations and marketing.
Joint Venture (JV) - Answers A business owned by two or more companies that share resources risks
and profits.
Wholly Owned Subsidiary - Answers A foreign company that is completely owned and controlled by
the parent firm.
Parallel Imports (Gray Market) - Answers Goods purchased in one country and resold in another
country where prices are higher.
Counterfeit Goods - Answers Fake products made to imitate legitimate branded products.
Foreign Trade Zone (FTZ) - Answers A designated area where goods can enter without paying duties
until they officially enter the country.
Foreign Corrupt Practices Act (FCPA) - Answers A U.S. law that prohibits bribing foreign government
officials to obtain business.
Lex Mercatoria - Answers The body of international trade laws customs and practices governing
international commercial transactions.
Sources of Lex Mercatoria - Answers United Nations conventions WTO agreements and international
trade practices.
CISG (Convention for the International Sale of Goods) - Answers A United Nations treaty adopted in
1980 that provides uniform rules for international sales contracts.
Purpose of CISG - Answers To standardize rules for international sales contracts across participating
countries.
Contract Formation Under CISG - Answers Offer acceptance rejection and counteroffer.
Offer - Answers When one party proposes a sale to another party.
Acceptance - Answers When the other party agrees to all terms of the offer.
Rejection - Answers When the receiving party refuses the offer.
Counteroffer - Answers A new offer made with different terms than the original offer.
CISG vs UCC Difference - Answers Under CISG a positive response with changes is a rejection while
under UCC it may be acceptance.
