Deck 17: Formulating the Strategic Response

Question 1

International business strategy is perhaps best understood based on a firm's international orientation and its geographic scope.

Answer 1

True
Explanation: this describes the extent and nature of the ways in which the firm engages with overseas markets. Much of our understanding of strategy formulation within international business is based on an influential study of MNEs undertaken by Bartlett and Ghoshal (1989). In studying the strategies adopted by a number of significant international businesses, the authors identified three principal strategy types: multi-domestic, global, and transnational.

Question 2

Digital Darwinism describes an era where technology and society are evolving faster than businesses can naturally adapt.

Answer 2

False
Explanation: In strategy terms, a global factory is one that focuses on engaged connections with all stakeholders, internally and externally. The depth and number of connections becomes the source of competitive advantage that enables the company to overcome digital Darwinism.

Question 3

Value creation describes activities that increase the value of goods or services to consumers.

Answer 3

True
Explanation: The statement is true. Adding to what consumers value (and are willing to pay extra for) is value adding and is expected to occur across a value (adding) chain.

Question 4

Planning for stability is a highly prized attribute of the global factory.

Question 5

The global factory model emphasizes the importance of control and not simply ownership, of competitive advantages.

Question 6

Outsourcing by a firm is a sign of weakness indicating that 'hollowing out' has occurred.

Question 7

Differences in customer tastes and preferences are a strong pressure for companies to be locally responsive.

Question 8

Strategy formulation in SMEs is very similar to the strategy formulation in MNEs

Question 9

Most global markets are for consumer goods despite the national differences in tastes and preferences.

Question 10

SMEs lack of innovation is one of the reasons SMEs face difficulties in entering international markets

Question 11

Core competencies are skills that competitors cannot easily match or imitate

Question 12

As a result of disruptive innovation _______

A) A company once dominant keep the pace with new innovation
B) A company once dominant keep the pace with new innovation with more costs
C) A company once dominant keep the pace with new innovation with less costs
D) A once-dominant company is reluctant or unable to commit fully to this innovation

Question 13

Which of the following is not one of Porter's Five Forces?

A) Bargaining power of buyers
B) Bargaining power of suppliers
C) Exit of established competitors
D) Threat of substitute products

Question 14

_______ is characteristic of a red ocean strategy.

A) Exploiting existing demand
B) Breaking the value-cost trade-off
C) Making the competition irrelevant
D) Creating uncontested market space

Question 15

A _______ describes a firm's international expansion philosophy emphasising detailed evaluation of foreign markets and a recognition of the need for separate orientations toward each market.

A) global perspective
B) philosophy perspective
C) multi-domestic perspective
D) market-extension perspective

Question 16

_______ is a basic characteristic of all services.

A) High cost
B) Significant intellectual content
C) Intangibility
D) Originality

Question 17

Flexibility and resilience are critical elements for avoiding strategic decay.

Question 18

A prescriptive or planned approach to strategy is most suited to unstable market conditions where planning is essential.

Question 19

Competitive strategy for the global factory is based on responding to direct competitors.