Deck 9: International Competitive Strategy

Question 1

Global strategic plans help to ensure that decision makers have a common understanding of the business and think through the impact of their decisions and actions firmwide.

Answer 1

True

Question 2

Value chain linkages must be examined not merely across activities within the company but also in terms of managing relationships with external entities such as suppliers, alliance partners, distributors, or customers within and across nations.

Answer 2

True

Question 3

International strategy involves decisions that deal with a single area, such as marketing or production.

Answer 3

False

Question 4

An analysis of the forces controlled by the firm will include a situational analysis and control analysis.

Question 5

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

Question 6

Value chain analysis focuses primarily on the question, "What value does the company want to deliver to these customers?"

Question 7

After setting corporate objectives, the company management must define the company's vision and mission.

Question 8

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

Question 9

Scenario planning helps to emphasize that the business environment is predictable and helps to emphasize the application of traditional perspectives when solving problems.

Question 10

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

Question 11

The goal of international strategy is to achieve and maintain a unique and valuable competitive position both within a nation and globally, a position that has been termed comparative advantage.

Question 12

The basic concept behind strategic planning is to help ensure that managers have a sound understanding of the business, the strategy, the assumptions behind the strategy, the external business environment pressures, and the company's strengths and weaknesses.

Question 13

Competencies are skills or abilities required in order to adequately complete a task.

Question 14

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 explicit knowledge.

Question 15

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

Question 16

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

Question 17

According to a study by McKinsey & Company, most executives worldwide agree that environmental, social, and business trends are less critical to company strategy than was the case five years ago.

Question 18

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

Question 19

Although strategic planning is not a widely used management tool among global executives, according to a Bain & Company survey there is a high level of satisfaction among those executives who do utilize strategic planning.

Question 20

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 21

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 22

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

Question 23

Sales forecasts are both a control and a planning technique.

Question 24

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

Question 25

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 26

Scenario analysis can help managers to break away from their existing view of the world and envision alternatives that might lie outside their traditional frame of reference.

Question 27

A benefit of global strategies is their ability to adjust quickly and effectively to changes in customer needs across national or regional markets.

Question 28

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

Question 29

Objectives must be quantified in order to be useful.

Question 30

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

Question 31

A multidomestic strategy tends to be used when a company simultaneously confronts pressures for cost effectiveness and local adaptation.

Question 32

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 33

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

Question 34

Scenarios are multiple, plausible stories for probable futures.

Question 35

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

Question 36

Because of the rapidity of changes in uncontrollable variables, many managers have turned to contingency plans, which are multiple, plausible stories for probable futures.

Question 37

A broad statement that defines the organization's scope is the mission statement.

Question 38

With a multidomestic strategy, the cost and complexity of coordinating a range of different strategies and product offerings across national and regional markets can be substantial.

Question 39

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 40

Tactical/operational plans are more detailed than strategic plans.

Question 41

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

Question 42

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

A) all of B, C, and
B) resources are always scarce.
C) there are many alternative ways to use the company's scarce resources.
D) As stated directly in the text.
E) two of B, C, and D.

Question 43

Due to developments such as a rapid rise in the level of uncertainty in many areas of international business, many firms have moved toward more structured strategic planning formats and longer planning documents.

Question 44

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

Question 45

Companies need to consider two types of measures when assessing strategic performance: (1) measures of the company's success in obtaining and applying required resources, such as financial, technological, and human resources, and (2) measures of the effectiveness of the company's personnel, within and across the firm's international network of operations, in performing their assigned jobs.

Question 46

International strategy:

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

Question 47

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

Question 48

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) All of the above are incorrect.
E) None of A, B, or C is incorrect.

Question 49

According to Frederick W. Gluck, formal strategic planning teams must assume a more explicit strategic decision-making role in strategic planning, including dedicating a large amount of time to deciding how things ought to be instead of listening to analyses of how they are.

Question 50

Top management of companies generally accepts the fact that, to be effective, strategic planning processes should permit ideas to surface from anywhere in the organization and at any time.

Question 51

To fully understand why, how, and where they intend to do business, now and over time, managers must have:

A) a clear understanding of the company's mission.
B) a vision for how they intend to achieve the company's mission.
C) an understanding of how the company plans to compete with other companies.
D) all of the above.
E) two of A, B, and C.

Question 52

Strategic planning processes are something that only the company's most senior executives are involved with.

Question 53

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

A) value chain analysis.
B) industry and competitor analysis.
C) strategic planning.
D) environmental analysis.
E) none of the above.

Question 54

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.
C) are expensive to develop and maintain.
E) two of A, B, and C.

Question 55

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 56

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

A) vice president for planning.
B) chief operating officer.
C) firm's chief executive officer.
D) director of the strategic planning department.
E) none of the above.

Question 57

International firms have found it necessary to institute formal global planning:

A) all of B, C, and
B) to eliminate the practice of informal planning.
C) to provide top management with a means to identify threats and opportunities worldwide.
D) Both C and D are correct, so E is the appropriate answer.
E) two of B, C, and D.

Question 58

The planning process that begins at the highest level in the organization and continues downward is top-down planning.

Question 59

According to the text, competencies:

A) are skills or abilities required in order to achieve competitive advantage.
B) refer to the ability of a company to have higher rates of profits than its competitors.
C) create value for customers and for which customers are willing to pay.
D) two of the above.
E) none of A, B, and C.

Question 60

Which of the following is correct about scenario analyses?

A) The objective of the process is to forecast the future.
B) The process extrapolates from past data to build scenarios for guiding decision making.
C) Managers develop best-case, worst-case, and most likely scenarios to guide decision making.
D) All of the above are correct.
E) None of A, B, or C is correct.

Question 61

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 62

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) none of the above.

Question 63

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) none of the above.

Question 64

Scenarios are designed to assist managers:

A) in becoming aware of the critical elements of the external forces.
B) in brainstorming various "what-if" situations.
C) in preparing budgets.
D) all of the above.
E) two of A, B, and C.

Question 65

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) regional strategy.
D) differentiation strategy.
E) home replication strategy.

Question 66

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 67

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

A) analyze the company's external and internal environments.
B) define the company's business and mission.
C) formulate scenarios.
D) all of the above.
E) two of A, B, and C.

Question 68

In analyzing the corporate controllable variables, management must address the question:

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) All of the above.
E) Two of A, B, and C.

Question 69

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 70

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 71

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) none of the above

Question 72

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 65 percent 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) none of the above.
E) two of A, B, and C.

Question 73

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) none of the above.

Question 74

In response to China's requirement to censor Internet searches:

A) two of B, C, andD.
B) Google chose not to enter that country.
C) Google refused to engage in censorship, including a disclosure on its site that no censorship had occurred.
D) Google provided users of its Chinese site with a hot link to its uncensored U.S. site, to circumvent censorship.
E) none of the above.

Question 75

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

A) two of B, C, and
B) set corporate objectives.
C) implement strategies.
D) As stated directly in the text.
E) all of B, C, and D.

Question 76

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

A) strategic plans.
B) competitive strategies.
C) policies.
D) procedures.
E) none of the above.

Question 77

According to the text, value chain analysis focuses primarily on which question?

A) What values are important to our company?
B) What is our strategy?
C) Who are the company's target customers?
D) What does the customer value and how much is the customer willing to pay for this value?
E) How will this customer value be created?

Question 78

An assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations and 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) none of the above.

Question 79

Scenarios:

A) all of B, C, andD.
B) have an objective of envisioning possible futures that might lie outside their traditional frame of reference.
C) are based on stories about possible futures that are presented to line managers by the strategic planners.
D) As stated directly in the text.
E) two of B, C, and D.

Question 80

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) none of A, C, D, orE
C) tacit.
D) intangible.
E) valuable.