Deck 10: Strategy and International Business

Question 1

A global strategy emphasizes economies of scale and offers greater opportunities to utilize innovations developed at the corporate level or in one country in other markets.

Answer 1

True

Question 2

Corporate strategy is concerned with the manner in which an organization should compete in the market.

Answer 2

False

Question 3

Staging and pacing refer to how the firm will generate positive returns over and above its cost of capital.

Answer 3

False

Question 4

In outsourcing, the company takes a function out of its home country and places the function in another country, generally at a lower cost.

Question 5

Strategy formulation is the process of performing all the activities necessary to do what has been planned.

Question 6

Business-level strategies are intended to create differences between a firm's position and those of its rivals.

Question 7

The disadvantage of a multidomestic strategy is that it cannot take advantage of economies of scale that could help decrease costs for the firm overall.

Question 8

The disadvantage of a global strategy is that the firm faces more uncertainty because of the tailored strategies in different countries.

Question 9

An international strategy has to be adjusted to adapt, overcome, or exploit differences across countries and regions.

Question 10

Business strategy is concerned with the kind of business an organization should undertake.

Question 11

Decisions about a firm's arenas may encompass its products, services, distribution channels, market segments, geographic areas, technologies, and even stages of the value-creation process.

Question 12

A multidomestic strategy is centralized and controlled by the home office and seeks to maximize global efficiency.

Question 13

The multidomestic strategy has been more commonly used by European multinational firms because of the variety of cultures and markets found in Europe.

Question 14

Differentiators help one to determine which particular industry or geographic segments are a firm's prime competitive arenas.

Question 15

Differentiation means that the firm seeks to make its products at the lowest cost possible relative to its competitors while maintaining a quality that is acceptable to consumers.

Question 16

Purchasing, logistics, inventory, and customer service form the key value-chain activities of an organization.

Question 17

Vehicles are the means for participating in targeted arenas.

Question 18

In northern England, KFC stresses gravy and potatoes, while in Thailand, it offers fresh rice with soy or sweet chili sauce. This is an example of a global strategy.

Question 19

Only the primary activities make up a firm's value chain.

Question 20

Economies of scope are similar in concept to economies of scale.

Question 21

_____ refers to work that is contracted to a nondomestic third party.

A) Homesourcing
B) International outsourcing
C) Open-sourcing
D) Offshoring
E) Importing

Question 22

Outsourcing involves:

A) diversifying into a new business.
B) the sale of products or services in one country that are sourced in another country.
C) the company delegating an entire process to the outsource vendor.
D) guiding the choice of markets that a firm competes in.
E) performing a service by staff from within an organization and also by an external service provider.

Question 23

Job design involves organizing jobs so that each position makes productive use of an individual's talents.

Question 24

Performance standards can be measured through financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals.

Question 25

_____ refers to the using of the organization's strengths in a way that cannot be easily duplicated by other firms or made less valuable by changes in the external environment.

A) Offshoring
B) Strategy formulation
C) Strategic intent
D) Synergy
E) Sustainable competitive advantage

Question 26

_____ refers to the sequence of activities that include the various steps of the supply chain as well as additional activities, such as marketing, sales, and service.

A) Value chain
B) Differentiation
C) Cost leadership
D) Scope
E) Homesourcing

Question 27

_____ refers to all the activities, from the gathering of raw materials to the sale of the finished product that a business goes through to make a product.

A) Outsourcing
B) Offshoring
C) Cost leadership
D) Differentiation
E) Vertical scope

Question 28

The acronym P-O-L-C is the framework that managers use to understand and communicate the relationship between:

A) corporate strategy and business strategy.
B) threats and opportunities.
C) strategy formulation and strategy implementation.
D) the vision statement and mission statement.
E) offshoring and international outsourcing.

Question 29

_____ means that the firm seeks to make its products or provide its services at the lowest cost possible relative to its competitors while maintaining a quality that is acceptable to consumers.

A) Geographical scope
B) Differentiation
C) Offshoring
D) Cost-leadership strategy
E) Homesourcing

Question 30

_____ refer(s) to the future-oriented declaration of the organization's purpose.

A) Strategic intent
B) Goals and objectives
C) Organizational values
D) Mission statement
E) Vision statement

Question 31

_____, which are a part of the SWOT analysis, assess the external attractive factors that represent the reason for a business to exist and prosper.

A) Strengths
B) Weaknesses
C) Threats
D) Opportunities
E) Strategies

Question 32

In _____, the company takes a function out of its home country and places the function in another country, generally at a lower cost.

A) offshoring
B) co-sourcing
C) importing
D) open-sourcing
E) homesourcing

Question 33

The controlling function requires monitoring performance so that it meets the performance standards established by the organization.

Question 34

_____, which are a part of the SWOT analysis, include factors beyond one's control that could place the strategy or even the business itself at risk.

A) Strengths
B) Efficacies
C) Threats
D) Opportunities
E) Weaknesses

Question 35

Leading involves setting performance standards based on the company's objectives, measuring and comparing actual performance against standards, and taking corrective action when necessary.

Question 36

Strategy implementation is the process of:

A) deciding which strategies to follow in order to diversify.
B) performing all the activities necessary to do what has been planned.
C) deciding the businesses in which an organization would compete.
D) addressing the issue of the kind of strategies an organization would follow.
E) devising plans to add value to the existing line of business.

Question 37

_____ include(s) the geographic markets the company serves, as well as the product and customer segments in which it competes.

A) Scale
B) Scope
C) Critical path
D) Company efficiency
E) Economies of scale

Question 38

During operational planning, an organization's top management analyzes their competitive opportunities and threats as well as the strengths and weaknesses.

Question 39

_____ refers to an organization's statement of purpose that describes who the company is and what it does.

A) Vision statement
B) Value chain
C) Mission statement
D) Geographical scope
E) Horizontal scope

Question 40

Which of the following refers to the shared principles, standards, and goals of an organization that are included in the mission statement or as a separate statement?

A) Differentiation
B) Cost leadership
C) Vision statement
D) Vertical scope
E) Organizational values

Question 41

_____ strategy maximizes local responsiveness by giving decentralizing decision-making authority to local business units in each country so that they can create products and services optimized to their local markets.

A) Differentiation
B) Multidomestic
C) Global
D) Cost-leadership
E) Transnational

Question 42

_____ refer(s) to efficiencies gained from demand-side changes, such as increasing the range of marketing and distribution.

A) Scale
B) Value chain
C) Cost leadership
D) Differentiation
E) Economies of scope

Question 43

In Holland, KFC makes a potato-and-onion croquette, while in France it sells pastries alongside chicken. KFC:

A) has centralized its business processes to enable it to provide the services mentioned.
B) assumes that consumer needs and desires vary by country.
C) assumes that the world is flat.
D) sells the same products in the same way in every country.
E) is following the cost-leadership strategy.

Question 44

_____ strategy is highly desirable and appropriate for many industries, given the differences across markets and the similarities being fostered by the flatteners.

A) Differentiation
B) Global
C) Cost-leadership
D) Multidomestic
E) Transnational

Question 45

Differentiation refers to:

A) all the activities from the gathering of raw materials to the sale of the finished product that a business goes through to make a product.
B) creating products or providing services at the lowest cost possible relative to its competitors while maintaining a quality that is acceptable to consumers.
C) creating unique value for the customer through advanced technology, high-quality ingredients or components, product features, and superior delivery time.
D) the number of similar businesses or business activities at the same level of the value chain.
E) the cost advantages that a business obtains through expanding in size.

Question 46

Differentiators are that facet of the strategy diamond which:

A) relate to the means for participating in targeted arenas, such as alliances, organic growth, or acquisition.
B) comprise features and attributes of a company's products or services that help it beat its competitors in the marketplace.
C) refer to the timing and speed of strategic moves.
D) refer to how a firm will generate positive returns over and above its cost of capital.
E) identify the areas in which a firm will be active, such as industry segments, geographic markets, and channels segments.

Question 47

A(n)_____ strategy is centralized and controlled by the home office and seeks to maximize worldwide efficiency.

A) global
B) differentiation
C) multidomestic
D) transnational
E) cost-leadership

Question 48

The firms following a(n) _____ invest in the activities that create the unique value but look for ways to reduce cost in nonvalue activities.

A) integrated cost-leadership and differentiation strategy
B) geographic scope
C) differentiation strategy
D) cost-leadership strategy
E) diversification strategy

Question 49

_____ refer(s) to how a firm will earn a profit; that is, how a firm will generate positive returns over and above its cost of capital.

A) Staging and pacing
B) Vehicle
C) Arenas
D) Economic logic
E) Differentiators

Question 50

_____ refers to the number of different topographical markets in which an organization participates.

A) Geographic scope
B) Value chain
C) Differentiation
D) Cost leadership
E) Offshoring

Question 51

Which of the following are what drive potential customers to choose one firm's offerings over those of competitors?

A) Differentiators
B) Arenas
C) Economic logic
D) Staging and pacing
E) Mission statement

Question 52

Dell found that it had to suspend its direct model in India for a temporary period because it needed local intermediaries to help develop both a base of business and acceptable levels of customer awareness and sophistication. This is an example of:

A) an organization increasing its horizontal scope.
B) diversification.
C) a cost-leadership strategy.
D) international strategy accommodating local environments.
E) an organization operating in a flat world.

Question 53

Diversification refers to:

A) moving from an industry market segment into another, related segment.
B) the number of similar businesses or business activities at the same level of the value chain.
C) moving from one industry into another.
D) cost advantages that a business obtains through expanding in size.
E) the sale of products or services in one country that are sourced in another country.

Question 54

The U.S. fast-food chain Sonic will only open new outlets in states that are adjacent to states where it already has stores. This is an example of:

A) differentiation.
B) increasing vertical scope.
C) diversification.
D) offshoring.
E) increasing geographic scope.

Question 55

Acquisitions, alliances, and organic investment and growth are examples of:

A) outsourcing to save costs.
B) differentiators that help firms beat competitors in the marketplace.
C) staging choices which reflect available resources.
D) vehicles for entering a new arena.
E) threats posed to an organization.

Question 56

Vehicles refer to:

A) how a firm will generate positive returns over and above its cost of capital.
B) the features and attributes of a company's product or service that help it beat its competitors in the marketplace.
C) the areas in which a firm will be active, such as industry segments, geographic markets, and channels segments.
D) the means for participating in targeted arenas.
E) the timing and speed of strategic moves.

Question 57

Staging and pacing is that facet of the strategy diamond which:

A) refers to the timing and speed of strategic moves.
B) relates to the means for participating in targeted arenas, such as alliances, organic growth, or acquisition.
C) identifies the areas in which a firm will be active, such as industry segments, geographic markets, and channels segments.
D) comprises features and attributes of a company's product or service that help it beat its competitors in the marketplace.
E) refers to how a firm will generate positive returns over and above its cost of capital.

Question 58

If the world were flat:

A) one could sell the same products and services in the same way in every country.
B) one has to sell products and services according to the needs of the host country.
C) one needs to decentralize decision-making authority to local business units in each country.
D) a firm needs to pursue different strategies in different locations to take advantage of economies of scale.
E) a firm would need to focus on maximizing local responsiveness.

Question 59

_____ refer(s) to the cost advantage that a business obtains through expanding in size.

A) Economies of scope
B) Synergies
C) Network externality
D) Vertical scope
E) Economies of scale

Question 60

_____ refers to the constellation of business, corporate, and international strategy elements, which managers must consider when making decisions.

A) Five Forces Analysis
B) Cluster model
C) Strategy diamond
D) Porter's four corners model
E) Strategic grouping

Question 61

The _____ function requires monitoring performance so that it meets the performance standards established by the organization.

A) controlling
B) leading
C) planning
D) organizing
E) job design

Question 62

_____ refers to the most long-range planning, typically looking three years or more into the future and setting a plan for how best to position the organization to compete effectively in the environment.

A) Organizational design
B) Organizing
C) Operational planning
D) Tactical planning
E) Strategic planning

Question 63

_____ is the function of management that involves setting objectives and determining a course of action for achieving these objectives.

A) Implementing
B) Organizing
C) Controlling
D) Job design
E) Planning

Question 64

_____ is a management function that develops an organizational structure and coordinates human resources within that structure to achieve organizational objectives.

A) Decentralizing
B) Organizing
C) Controlling
D) Leading
E) Planning

Question 65

What are the two critical factors that organizations have to keep in mind when selecting differentiators?

Question 66

What are the steps an organization needs to take while setting objectives and determining a course of action for achieving these objectives?

Question 67

Operational planning refers to:

A) planning with a time horizon of one to three years and specifies fairly concrete ways to implement the strategic plan.
B) planning with a time horizon of less than one year and specifies concrete action steps to achieve organization-wide strategic and tactical plans.
C) planning with a time horizon of three years or more and setting a plan to best position the organization to compete effectively in the environment.
D) the decision about the nature of the jobs in an organization.
E) a management function that develops an organizational structure and coordinates human resources within that structure to achieve organizational objectives.

Question 68

_____ refers to a plan with a time horizon of one to three years and specifies concrete ways to implement the strategic plan.

A) Controlling
B) Organizational design
C) Organizing
D) Operational planning
E) Tactical planning

Question 69

Decisions made about the nature of jobs within the organization are generally called _____ decisions.

A) job design
B) organizational design
C) controlling
D) strategic planning
E) leading

Question 70

What are the three generic business-level strategies firms choose from to establish and defend their desired strategic position against rivals?

Question 71

The first step in the planning process is:

A) establishing organizational objectives.
B) formulating and ensuring the effective implementation of plans.
C) the SWOT analysis.
D) identifying multiple ways of achieving organizational objectives.
E) monitoring the progress and evaluating the success of the plans.

Question 72

What are the key issues addressed by an organization's corporate strategy?

Question 73

Why is increased horizontal scope attractive to organizations?

Question 74

Controlling refers to:

A) monitoring performance so that it meets the performance standards established by the organization.
B) decisions made about the structure of an organization.
C) the function of management that involves setting objectives and determining a course of action for achieving these objectives.
D) a management function that develops an organizational structure and coordinates human resources within that structure to achieve organizational objectives.
E) an organization's analyses of its competitive opportunities and threats as well as the strengths and weaknesses.

Question 75

Explain vertical scope.

Question 76

What does the "international strategy" of an organization refer to?

Question 77

What are the three primary types of plans and planning?

Question 78

Explain multidomestic strategy.

Question 79

What is staging and pacing?

Question 80

In the past, _____ meant narrowing a job's tasks so that the individual could be more proficient at those tasks.

A) job design
B) organizational design
C) job analysis
D) job description
E) tactical planning