Question 1

A worldwide strategy based on cost leadership, differentiation and segmentation is referred to as the:

Accepted Answer

The economic imperative strategy involves companies striving to achieve a low-cost structure while also differentiating their products or services and targeting specific segments of the market. This approach enables companies to compete on price while also offering unique features that meet the needs of specific customer groups. It is a balance of cost leadership, differentiation, and segmentation strategies. The political imperative is focused on political factors such as government regulations, while the quality imperative emphasizes delivering high-quality products or services. The administrative coordination strategy focuses on coordinating activities across international locations to increase efficiency.

Question 2

Typically, MNCs utilizing this approach to strategic planning use a country-centered or multi-domestic strategy.

Accepted Answer

The approach of utilizing a country-centered or multi-domestic strategy is based on the political imperative, which refers to the need to adapt to the political and legal differences of different countries. This approach involves tailoring products and services to each local market and may involve decentralizing decision-making to local subsidiaries or franchises.

Question 3

All of the following are characteristics of TQM except:

Accepted Answer

The quality strategy is not formulated by the front-line employees alone in TQM. Instead, it is a collaborative effort that involves employees at all levels of the organization. TQM emphasizes teamwork, continuous improvement, and leadership involvement in formulating and implementing quality strategies.

Question 4

The products sold by MNCs pursuing this approach often have a large portion of their value added in the downstream activities of the value chain.

Accepted Answer

The products sold by MNCs often have a large portion of their value added in the downstream activities of the value chain. Industries such as insurance and consumer packaged goods are examples-the success of the product or service generally depends heavily on marketing, sales, and service.

Question 5

MNCs using the _____ approach to strategic planning are country-responsive; their approach is designed to protect local market niches.

Accepted Answer

MNCs using the Political Imperative approach to strategic planning are country-responsive and prioritize protecting local market niches. This approach emphasizes working with the host government and adapting to local customs and preferences. The Administrative Coordination Strategy focuses on centralizing decision-making and standardizing operations across borders. The Economic Imperative emphasizes maximizing efficiency and cost savings, and the Quality Imperative emphasizes delivering consistent and high-quality products and services globally.

Question 6

This strategy is appropriate when the need for national responsiveness is low and the need for globalization integration is high.

Accepted Answer

The global strategy is appropriate when the need for national responsiveness is low and the need for globalization integration is high. This strategy focuses on creating a standardized product or service that can be marketed and distributed in the same way across different countries. This allows companies to take advantage of economies of scale and reduce costs, while also allowing for consistent branding and messaging across markets.

Question 7

Which foreign marketing strategy is characterized by niche companies that adapt their products to satisfy the high demands of differentiation and ignore economies of scale because integration is not very important?

Accepted Answer

The multi-domestic strategy is characterized by niche companies that adapt their products to satisfy the high demands of differentiation. In this strategy, companies ignore economies of scale because integration is not very important. The focus is on meeting the varied demands of different local markets, and customization is the key to success. This strategy is often used in industries such as luxury goods, where customers demand unique and differentiated products.

Question 8

The approach to strategic formulation and implementation utilizing strategies of TQM to meet or exceed customers' expectations and continuously improve products and/or services is referred to as the:

Accepted Answer

The approach mentioned in the question is directly related to the concepts of Total Quality Management (TQM), which emphasizes meeting or exceeding customer expectations and continuous improvement of products and services. This is in line with the Quality imperative of TQM. The other options - Value-added imperative, Political imperative, and Economic imperative - do not directly relate to the given approach.

Question 9

_____ is the production and distribution of products and services of a homogeneous type and quality on a worldwide basis.

Accepted Answer

Global integration refers to the production and distribution of products and services of a homogeneous type and quality on a worldwide basis. It involves the standardization of processes, products, and services across different countries and markets. This allows companies to achieve economies of scale, reduce costs, and increase efficiency. Global integration is a key strategy for multinational corporations that operate in different countries and regions.

Question 10

This approach to formulation and implementation is one in which the MNC makes strategic decisions based on the merits of the individual situation rather than using a predetermined economic or political strategy.

Accepted Answer

An administrative coordination approach to formulation and implementation is one in which the MNC makes strategic decisions based on the merits of the individual situation rather than using a predetermined economic or political strategy. A good example is provided by Walmart, which has expanded rapidly into Latin America in recent years. While many of the ideas that worked well in the North American market served as the basis for operations in the Southern Hemisphere, the company soon realized that it was doing business in a market where local tastes were different and competition was strong.

Question 11

The process of determining an organization's basic mission and long-term objectives and then implementing a plan of action for attaining these goals is:

Accepted Answer

Strategic management involves determining an organization's mission and long-term objectives and developing a plan of action to achieve them. Tactical management involves implementing the specific tactics needed to carry out the strategic plan. Contingency management involves preparing for and dealing with unexpected events or situations. Functional management involves managing specific departments or functions within an organization.

Question 12

These individuals are the key to stimulating profit growth within a company.

Accepted Answer

Middle managers are the key to stimulating profit growth within a company, so expanding those efforts on an international level is a necessary tool to learn for today's new managers.

Question 13

According to the text, strategic planning helps MNCs to do all of the following except:

Accepted Answer

The text states that strategic planning helps MNCs to coordinate and monitor its far-flung operations, deal with political risks, and determine performance. However, it does not directly state that strategic planning helps MNCs to achieve higher profitability. Although higher profitability may be a desired outcome, it is not specifically stated as a benefit of strategic planning in the text.

Question 14

When the need for national responsiveness is low and the need for global integration is also low, which of the following strategies would be appropriate?

Accepted Answer

Quadrant 2 incorporates those cases in which both the need for integration and awareness of differentiation are low. Both the potential to obtain economies of scale and the benefits of being sensitive to differentiation are of little value. Typical strategies in quadrant 2 are characterized by increased international standardization of products and services. This mixed approach is often referred to as international strategy.

Question 15

Ford Motor's strategic plan in Thailand is based on:

Accepted Answer

Ford's strategic plan in Thailand focuses on offering the right combination of price and financing to a carefully identified market segment, indicating a targeted approach rather than a broad one-size-fits-all strategy.

Question 16

Honda and General Motors have both built plants in Thailand to take advantage of

Accepted Answer

Both Honda and General Motors have built plants in Thailand to take advantage of tax incentives and demand.

Question 17

When the need for national responsiveness is high and the need for global integration is low, a(n) _____ strategy is appropriate.

Accepted Answer

A multi-domestic strategy focuses on adapting products and services to meet the specific needs of each local market, rather than offering a standardized product globally. This is appropriate when national responsiveness is high, meaning that customers in each market have unique needs and preferences, and the need for global integration is low, meaning that there are few economies of scale to be gained by standardizing products across markets.

Question 18

Companies that pursue this strategy typically sell products for which a large portion of value is added in the upstream activities of the industry's value chain.

Accepted Answer

MNCs that focus on the economic imperative employ a worldwide strategy based on cost leadership, differentiation, and segmentation. Many of these companies typically sell products for which a large portion of value is added in the upstream activities of the industry's value chain.

Question 19

When the need for national responsiveness is high and the need for global integration is also high, this strategy is appropriate.

Accepted Answer

A transnational strategy allows for both national responsiveness and global integration by creating a flexible and decentralized organizational structure that can adapt to local market needs while also leveraging global resources and capabilities. This approach emphasizes knowledge sharing and collaboration across borders to achieve a balance between local differentiation and global standardization. The other options, such as globalization and international strategies, do not necessarily prioritize national responsiveness or localization. The multi-domestic strategy prioritizes national responsiveness but may not effectively leverage global resources.

Question 20

The need to understand the different consumer tastes in segmented regional markets and respond to different national standards and regulations imposed by autonomous governments and agencies is:

Accepted Answer

The need to understand different consumer tastes in segmented regional markets and respond to different national standards and regulations imposed by autonomous governments and agencies is an example of national responsiveness. National responsiveness refers to a company's ability to tailor its products and services to meet the specific demands of different national markets. It involves adapting to local consumer preferences, cultural norms, and regulations, which can vary greatly from one country to another. This is especially important for companies operating in multinational markets where standardization may not be possible or desirable.

Quiz 8: Strategy Formulation and Implementation