Deck 9: International Competitive Strategy

Question 1

When developing and assessing strategic alternatives,it is important to remember that companies competing in international markets confront two opposing forces: reduction of costs and adaptation to local markets.

Answer 1

True
Explanation: When developing and assessing strategic alternatives, it is important to remember that companies competing in international markets confront two opposing forces: reduction of costs and adaptation to local markets.

Question 2

Knowledge that an individual has but that is difficult to express clearly in words,pictures,or formulas,and therefore difficult to transmit to others,is called explicit knowledge.

Answer 2

False
Explanation: Knowledge that an individual has but that is difficult to express clearly in words, pictures, or formulae, and therefore difficult to transmit to others, is called tacit knowledge.

Question 3

To creative a sustainable competitive advantage,an international company should try to develop competencies that are valuable,rare,difficult to imitate,and readily substitutable.

Answer 3

False
Explanation: To creative a sustainable competitive advantage, an international company should try to develop competencies that are valuable, rare, difficult to imitate, and hard to substitute for.

Question 4

The objective of scenario building is to force executives to question their assumptions about the environments in which the company operates and incorporate into their planning the uncertainties that might profoundly affect their strategic and operational performance around the world.

Question 5

Objectives must be quantified in order to be useful.

Question 6

Objectives direct the firm's course of action,maintain it within the boundaries of the stated mission,and ensure its continuing existence.

Question 7

International strategy helps firms to make choices about how to deploy scarce resources to achieve their international objectives.

Question 8

The ultimate managers of strategic planning and strategy making are the executive board of a corporation.

Question 9

A multidomestic strategy tends to be used when a company confronts pressures for local adaptation rather than cost-effectiveness.

Question 10

Historically,more aspects of marketing have been standardized and coordinated worldwide by companies than has been the case for other value chain activities such as research and development and manufacturing.

Question 11

Scenarios are forecasts that extrapolate from past data to make predictions.

Question 12

The first step in the process of strategic planning is to define the company's business and mission.

Question 13

Strategic plans promote consistency of action among the firm's managers worldwide and encourage them to consider the ramifications of their actions in the firm's other geographic and functional areas.

Question 14

Companies have the potential to achieve competitive advantages through leveraging their organizational knowledge across national boundaries.

Question 15

A global strategy tends to be used when a company faces strong pressures for reducing costs and limited pressure to adapt products for local markets.

Question 16

Value chain analysis is an assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations,intended to determine where and to what extent value is added to the final product or service.

Question 17

Because large multinationals generate an average of nearly half of their revenues within their home region,some researchers have suggested that a regional strategy perspective is more appropriate than a global perspective.

Question 18

Companies pursuing a home replication strategy typically centralize product development functions in their home country and then transfer innovations to foreign markets to capture additional value.

Question 19

A broad statement that defines the purpose for a company's existence is the mission statement.

Question 20

According to a study by McKinsey & Company,most executives worldwide agree that environmental,social,and business trends represent critical challenges for company strategy and performance.

Question 21

Which of the following is correct about scenario analyses?

A) The objective of the process is to forecast the future.
B) Increasingly, strategic planners from a company's headquarters make the scenarios and presented them to line managers to guide their decision making.
C) The process extrapolates from past data to build scenarios for guiding decision making.
D) Scenarios are intended to be plausible and challenging stories.
E) Managers develop best-case, worst-case, and most likely scenarios to guide decision making.

Question 22

Scenarios are multiple,plausible stories for probable futures.

Question 23

An advantage of bottom-up planning is that the people responsible for attaining the goals are formulating them.

Question 24

Procedures are broad guidelines issued by upper management for the purpose of assisting lower-level managers in handling nonrecurring problems.

Question 25

Scenarios are a particularly useful approach for international companies that face high levels of change and uncertainty,because they allow management to anticipate and prepare for opportunities and threats by predicting and controlling for these developments.

Question 26

All of the following are correct about international strategy except:

A) International strategy is the basis for establishing a company's mission and vision.
B) International strategy needs to be consistent among the various functions, products, and regional units of the company.
C) International strategy needs to be consistent with the demands of the international competitive environment.
D) International strategy is concerned with the way firms make fundamental choices about developing and deploying scarce resources internationally.
E) International strategy has a goal of achieving and maintaining competitive advantage.

Question 27

To be effective,a company's international strategy

A) must be the same as the leaders of the industry.
B) must be consistent among all the functions and activities of the company.
C) must be the same as the company's domestic strategy.
D) must be externally consistent among the company's products and regional units.
E) must have internal consistency with the demands of the international competitive environment.

Question 28

A company's ability to achieve and maintain a unique and valuable competitive position both within a nation and globally,generating higher rates of profit than its competitors,is known as

A) international strategy.
B) competitive advantage.
C) resource leverage.
D) comparative advantage.
E) strategic dominance.

Question 29

International strategy

A) is a forecast about the company's future and how to achieve it.
B) is a vision for what the company will become in the future.
C) is the basis for a company's mission.
D) a plan to help guide how a company makes choices about developing and deploying resources.
E) a plan for achieving competitive advantage in an area such as marketing or production.

Question 30

Which of the following is not correct regarding the skills or competencies a company must develop to achieve a sustainable competitive advantage?

A) They create value for which customers are willing to pay.
B) They are rare.
C) They are difficult to imitate or substitute for.
D) They can be copyrighted or patented.
E) They allow the company to exploit their competitive value.

Question 31

Tactical plans are more detailed than strategic plans.

Question 32

Which of the following is correct about scenario analyses?

A) The objective of the process is to forecast the future.
B) The scenario building team identifies the driving forces and "critical certainties" in a decision and prioritizes them.
C) By anticipating the future and recognizing the warning signs of turbulence ahead, managers can develop more effective strategies.
D) The process extrapolates from past data to build scenarios for guiding decision making.
E) Managers develop best-case, worst-case, and most likely scenarios to guide decision making.

Question 33

Which of the following is incorrect about scenario analyses?

A) The objective of the process is to force executives to question their assumptions about the environment.
B) The process attempts to incorporate the uncertainty and potential changes that might impact strategic and operational performance.
C) Managers develop scenarios and use them for discussion.
D) Scenario planning helps to emphasize that the business environment is predictable and helps to emphasize the application of traditional perspectives when solving problems.
E) Scenario analysis attempts to force executives to question their assumptions about the environments in which the company operates.

Question 34

There is a growing tendency for firms to use strategic planners to devise the corporate plan,which is then handed to operations people for execution.

Question 35

To create a competitive advantage that is sustainable over time,the international company should try to develop competencies that

A) create value for customers and for which they are willing to pay.
B) are easy to imitate or substitute for.
C) are expensive to develop and maintain.
D) are not critical to successful penetration of international markets.
E) imitate those of market leaders.

Question 36

Policies are broad guidelines issued by upper management for the purpose of assisting lower-level managers in handling unique new problems.

Question 37

Contingency plans are developed in some firms for the best- and worst-case scenarios and for critical events.

Question 38

Repetition of the bottom-up or top-down planning process until all differences are reconciled is sequential planning.

Question 39

Which of the following is correct regarding the skills or competencies a company must develop in order to achieve a sustainable competitive advantage?

A) They keep prices low.
B) They are easy to obtain.
C) They are easy to imitate.
D) They must be copyrighted or patented.
E) They are difficult to substitute for.

Question 40

Two prominent features of the strategic plan are sales forecasts and the mission statement.

Question 41

The practices that organizations and their managers use for identifying,creating,acquiring,developing,dispersing,and exploiting competitively valuable knowledge is known as

A) competitive advantage.
B) international strategy.
C) value analysis.
D) knowledge management.
E) internalization.

Question 42

A description of the company's desired future position if it can acquire the necessary competencies and successfully implement its strategy is known as a

A) strategic plan.
B) mission statement.
C) vision statement.
D) values statement.
E) scenario.

Question 43

According to the text,the strategic planning process provides a formal structure in which managers will do all of the following except

A) analyze the company's external environments.
B) analyze the company's internal environments.
C) define the company's business and mission.
D) set corporate objectives.
E) implement strategies.

Question 44

According to the text,the strategic planning process provides a formal structure in which managers will do all of the following except

A) analyze the company's external environments.
B) formulate scenarios.
C) define the company's business and mission.
D) formulate strategies.
E) set corporate objectives.

Question 45

International firms have found it necessary to institute formal global planning

A) to eliminate the practice of informal planning.
B) to provide top management with a means to identify threats and opportunities worldwide.
C) to promote different courses of action among the firm's managers worldwide.
D) to serve as an input for scenario building.

Question 46

According to the text,value chain analysis focuses primarily on what question(s)?

A) Who are the company's target customers?
B) What does the customer value and how much is the customer willing to pay for this value?
C) How will this customer value be created?
D) What is the best way for the company to enter a market?
E) Should the company enter a foreign market?

Question 47

Knowledge that an individual has that is easy to express clearly in words,pictures,or formulas is known as

A) explicit.
B) implicit.
C) tacit.
D) intangible.
E) valuable.

Question 48

Knowledge that an individual has but that is difficult to express clearly in words,pictures,or formulae,and therefore difficult to transmit to others is known as

A) explicit.
B) implicit.
C) tacit.
D) intangible.
E) valuable.

Question 49

The process by which an organization determines where it is going in the future,how it will get there,and how it will assess whether and to what extent it has achieved its goals is known as

A) value chain analysis.
B) scenario analysis.
C) strategic planning.
D) international strategy.
E) competitive advantage.

Question 50

According to a survey by Bain & Company,the management tool with the highest reported levels of satisfaction among global executives is

A) value chain analysis.
B) industry and competitor analysis.
C) strategic planning.
D) environmental analysis.
E) scenario analysis.

Question 51

Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because

A) resources are no longer scarce in a globalizing world.
B) there are few, if any, options for using the company's resources.
C) managers are forced to make choices regarding what to do and what not to do.
D) time is limited, even though financing and human resources are not.

Question 52

Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because

A) time, talent, and money are scarce.
B) resources are seldom scarce.
C) there are few or no alternative ways to use the company's scarce resources.
D) without planning, we cannot make decisions that make good sense.
E) the company's mission is constantly changing.

Question 53

According to the text,the strategic planning process provides a formal structure in which managers will do the following:

A) establish a corporate level team to prepare the strategic plan.
B) define the company's business and mission.
C) formulate scenarios.
D) implement strategy.

Question 54

According to the text,the strategic planning process provides a formal structure in which managers will

A) set corporate objectives.
B) implement strategies.
C) manage relationships with government and society.
D) formulate best- and worst-case scenarios.
E) evaluate the strategic plan that is prepared by staff at company headquarters.

Question 55

A broad statement that defines the organization's purpose and scope is known as a

A) strategic plan.
B) mission statement.
C) vision statement.
D) values statement.
E) value chain.

Question 56

An assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations,intended to determine where and to what extent value is added to the final product or service is known as

A) economic value added.
B) internal analysis.
C) value chain analysis.
D) SWOT analysis.
E) competitive advantage assessment.

Question 57

According to the text,which of the following is the goal of value chain analysis?

A) To enable managers to identify which set of activities it will do itself and which it will outsource.
B) To enable managers to identify whether to enter foreign markets.
C) To enable managers to identify the true value of the company's stock.
D) To enable managers to identify the underlying values and belief of the company and its culture.
E) To enable managers to identify who their competitors are.

Question 58

According to the text,the firm's ultimate manager of strategic planning is the firm's

A) vice president for planning.
B) chief operating officer.
C) chief executive officer.
D) director of the strategic planning department.
E) director of global activities.

Question 59

According to the text,when the international company's planning committee has completed the internal audit,it is ready to examine

A) external variables.
B) the company's knowledge base.
C) the company's mission and vision.
D) the company's international strategy.
E) scenarios for the future.

Question 60

According to the text,when the managers are analyzing the corporate controllable variables,the three key questions managers must address about their business include

A) who are the company's target customers?
B) what will be the costs that the company will incur in delivering value to its target customers?
C) how much will the company be able to charge for the value it creates for its target customers?
D) where should the company's production facilities be located?
E) which marketing channels should the company use?

Question 61

Historically,more aspects of _______ have been standardized and coordinated worldwide by companies than has been the case for other value chain activities such as _______.

A) research and development; manufacturing
B) marketing; manufacturing
C) manufacturing; marketing
D) marketing; research and development
E) human resources; marketing

Question 62

A clear,concise description of the fundamental beliefs and priorities expected of the organization's members,reflecting how they are to behave with each other and with the company's customers,suppliers,and other members of the global community is known as a

A) strategic plan.
B) mission statement.
C) vision statement.
D) values statement.
E) policy.

Question 63

When there is strong pressure for a company to adapt its products or services for local markets,it should tend to use a

A) global strategy.
B) multidomestic strategy.
C) transitional strategy.
D) differentiation strategy.
E) home replication strategy.

Question 64

In response to China's requirement to censor Internet searches

A) Google chose not to enter that country.
B) Google refused to engage in censorship, including a disclosure on its site that no censorship had occurred.
C) Google agreed to engage in censorship, disclosing to customers that censorship had occurred.
D) Google provided users of its Chinese site with a hot link to its uncensored U.S. site, which prevented the Chinese government from restricting Chinese users access to uncensored content.
E) Google supported cyberattacks against Chinese government servers.

Question 65

Scenarios are designed to assist managers

A) in controlling the critical elements of the external forces.
B) in brainstorming various plausible stories about the future.
C) in preparing budgets.
D) in establishing vision statements.
E) in understanding historical events.

Question 66

A Booz Allen Hamilton/Aspen Institute survey of corporations in 30 countries revealed that 89 percent of these organizations had explicit,written statements of corporate values and that greater success in linking a corporation's values to its operations was related to

A) increased employee satisfaction.
B) superior financial results.
C) improved knowledge management.
D) improved communication with supply chains.
E) greater creativity.

Question 67

Multiple,plausible stories for probable futures are known as

A) vision statements.
B) contingency plans.
C) strategic forecasts.
D) scenarios.
E) strategies.

Question 68

When a company faces relatively weak pressures for local responsiveness and cost reductions,it should tend to use a

A) global strategy.
B) multidomestic strategy.
C) transnational strategy.
D) differentiation strategy.
E) home replication strategy.

Question 69

Companies pursuing a global strategy

A) usually have low operating costs and high efficiency.
B) often have decentralized decision making and quick response to changes in local competition.
C) have loose headquarters control over product strategy.
D) have low levels of transportation and tariff costs.
E) have high levels of local market customization.

Question 70

Action plans to enable organizations to reach their objectives are known as

A) strategic plans.
B) competitive strategies.
C) policies.
D) procedures.
E) strategic scenarios.

Question 71

When developing and assessing strategic alternatives,companies competing in international markets confront which two opposing goals?

A) Reduce investment and increase profits.
B) Reduce complexity and improve effectiveness.
C) Standardize policies and reduce complexity.
D) Reduce costs and adapt to local markets.
E) Be innovative and efficient.

Question 72

Most top managers

A) prefer nonquantifiable, directional goals.
B) prefer nonquantifiable, but verifiable goals.
C) prefer verifiable objectives.
D) have no preference as to quantifiable and nonquantifiable goals.
E) have more quantifiable goals than do managers at lower levels.

Question 73

When a company faces strong pressures for reducing costs and limited pressure to adapt products for local markets,it should tend to use a

A) global strategy.
B) multidomestic strategy.
C) transnational strategy.
D) differentiation strategy.
E) home replication strategy.

Question 74

To develop a strategy for reaching corporate objectives,management must first try to

A) select a viable market segment.
B) quantify them.
C) define the firm's mission.
D) research the market.
E) develop scenarios.

Question 75

Investigations of large multinationals in manufacturing and service sectors reveal that

A) a majority of them use a global strategy.
B) a majority of these firms generate an average of about half of their worldwide revenues within their home region.
C) most of these firms have achieved broad and deep penetration of international markets as a whole.
D) the 500 largest multinationals are responsible for about half of the global stock of foreign direct investment.
E) for most companies, the world's marketplace is triad-based rather than global.

Question 76

To set corporate objectives,management must first

A) select a viable market segment.
B) quantify them.
C) define the firm's mission.
D) research the market.
E) None of the above.

Question 77

Companies pursuing a transnational strategy

A) usually have less decentralized manufacturing operations.
B) usually have highly decentralized marketing activities.
C) usually have simple organizational structures and processes within and across regions.
D) usually locate most of their activities in developing countries.
E) usually have international subsidiaries develop and share knowledge with company operations worldwide.

Question 78

When a company faces strong pressures for both reducing costs and adapting products for local markets,it should tend to use a

A) global strategy.
B) multidomestic strategy.
C) transnational strategy.
D) differentiation strategy.
E) home replication strategy.

Question 79

Companies pursuing a home replication strategy

A) usually have low operating costs and high efficiency.
B) often have duplication of manufacturing facilities.
C) have loose headquarters control over product strategy.
D) have local subsidiaries that develop unique country-level capabilities.
E) have high levels of local market customization.

Question 80

Companies pursuing a multidomestic strategy

A) usually have low operating costs and high efficiency.
B) often have centralized decision making and quick response to changes in local competition.
C) have tight headquarters control over product strategy.
D) have local subsidiaries that leverage home-country capabilities.
E) have high levels of local market customization.