According to Knickerbocker's Theory

question 55

Multiple Choice

According to Knickerbocker's theory

• A) when a firm has valuable know-how that cannot be adequately protected by a licensing contract, it engages in FDI.
• B) when a firm's skills and know-how are not amenable to licensing, it usually prefers the FDI route.
• C) by placing tariffs on imported goods, governments indirectly increase the cost of exporting relative to foreign direct investment and licensing.
• D) when a firm that is part of an oligopolistic industry expands into a foreign market, other firms in the industry will be compelled to make similar investments.

---

Definitions:

Defender

In a business context, a defender is a type of strategy or stance where an organization focuses on defending its market position by improving operational efficiency and product quality, rather than seeking new markets.

Prospector

In a business context, this term refers to companies that focus on innovation, seeking out new markets and opportunities, and being among the first to bring new products or services to market.

Operational Planning

The process of developing detailed, short-term plans that guide an organization's resources towards achieving strategic objectives.

Strategic Planning

Strategic planning is the process of defining an organization's direction and making decisions on allocating its resources to pursue this strategy, including its capital and people.