Question 1

If WRSX decides to enter new markets, it will need to consider which entry mode to choose. Which TWO of the following statements about entry modes is correct?
A) A wholly owned subsidiary in a 'greenfield' start up operation would be the lowest risk option.
B) A joint venture with a local partner would enable the company to tap into the partner's cultural know-how, linkages and reputation.
C) A wholly owned subsidiary would be suitable in markets where the agency has broad competitive advantages that can easily be transferred to the new markets.
D) Franchising or licensing of the agency's brand name to a local firm is a high cost/high risk option which should only be used in exceptional circumstances.

Accepted Answer

A joint venture with a local partner would provide access to the partner's knowledge of the market, cultural understanding, and existing network, allowing for a smoother entry into the new market. A wholly owned subsidiary would be suitable for markets where the agency has broad competitive advantages that can be easily transferred to the new market, as the agency would have complete control over the operation. However, a 'greenfield' start-up operation would likely be a higher risk option compared to a joint venture with a local partner, as it would require significant upfront investment to establish operations from scratch. Franchising or licensing of the agency's brand name may be suitable in some circumstances, but it would not necessarily be a high cost/high risk option.

Question 2

Which TWO of the following could be considered as 'cost drivers' in Yip's 'Drivers of Internationalisation' model?
A) An international agency gains from economies of scale.
B) An agency has global customers.
C) Advertising regulations are being standardised across different regional markets.
D) An agency is able to exploit cheaper labour in one of its locations e.g. WRSX can employ new media expertise in Singapore at lower wage rates.

Accepted Answer

A,D

Question 3

WRSX has grown primarily through a series of mergers and acquisitions. Which TWO of the following might be advantages of this form of strategic development?
A) It expands the range of capabilities available to the organisation
B) It enables the organisation to spread the cost of new investment over a longer time period.
C) It avoids integration problems and cultural fit difficulties.
D) It expands the market coverage of an organisation by entering new geographical markets.

Accepted Answer

Mergers and acquisitions can expand the range of capabilities and market coverage of an organisation by entering new geographical markets. However, it may not necessarily spread the cost of new investment over a longer time period and may pose integration problems and cultural fit difficulties.

Question 4

Currently WRSX adopts a multi-domestic approach to managing its subsidiaries. Which TWO of the following points are advantages of such an approach?
A) It gives the subsidiary businesses a good deal of autonomy and this motivates local managers to perform better.
B) It enables all the subsidiary businesses to co-ordinate their activities and build synergistic linkages between them.
C) It allows the subsidiary to focus on local clients and specifically tailor its services to the needs of these clients.
D) By concentrating activities in one or two locations the business is able to reap economies of scale and cut costs.

Accepted Answer

A multi-domestic approach allows for subsidiary businesses to operate with a certain level of autonomy, giving local managers the ability to tailor services to the specific needs of their clients. This autonomy can motivate local managers and create a sense of ownership and accountability, which can lead to better performance. Additionally, this approach allows for a focus on local clients and can increase customer satisfaction. Therefore, options A and C are advantageous. Option B is more aligned with a global approach, where the emphasis is on co-ordination and synergy between subsidiaries. Option D may be an advantage of a centralized approach, but not necessarily a multi-domestic approach.

Question 5

If WRSX, or one of its competitors, decided to try to increase market share by offering higher quality services whilst simultaneously seeking ways of lowering costs in order to lower prices, this is an example of which kind of competitive strategy according to the 'Strategy Clock'?
A) Differentiation strategy.
B) Non competitive strategy.
C) Low price strategy.
D) Hybrid strategy.

Accepted Answer

The 'Strategy Clock' model, developed by Cliff Bowman and David Faulkner, outlines various competitive strategies based on different combinations of price and perceived value. A hybrid strategy, as described in the scenario, involves offering higher quality (increased perceived value) while also lowering costs to reduce prices. This approach aims to combine aspects of both differentiation (through higher quality) and cost leadership (through lower prices), making it a hybrid strategy.

Question 6

Which TWO of the following are sensible reasons for WRSX to avoid diversifying into new activities beyond its core marketing services?
A) There are no possibilities for economies of scope.
B) Research shows that unrelated diversification is negatively co-related with performance.
C) The potential for synergy is limited as the activities are not related.
D) Spreading risk across a wide range of activities reduces dependence on one market.

Accepted Answer

Research has shown that unrelated diversification is negatively co-related with performance, and the potential for synergy is limited when the activities are not related. While there may be opportunities for economies of scope and risk reduction through diversification, these reasons alone may not be enough to justify pursuing new activities outside of the core marketing services.

Question 7

Match between columns
                        Premises: Alien Business
Value Trap Business
Heartland Business
Ballast Business

Accepted Answer

The Answer of The parent has little understanding of the is...

Question 8

Match between columns
                        Premises: Tipping Point
Disruptive Innovation
Open Innovation
First Mover Advantage

Accepted Answer

The Answer of The deliberate import and export of knowledge is...

Question 9

Match between columns
                        Premises: Cash cow
Star
Dog
Question mark

Accepted Answer

The Answer of An agency has a large market share is...

Quiz 2: The Strategy Experience Phase 2

If WRSX decides to enter new markets, it will need to consider which entry mode to choose. Which TWO of the following statements about entry modes is correct?

Which TWO of the following could be considered as 'cost drivers' in Yip's 'Drivers of Internationalisation' model?

WRSX has grown primarily through a series of mergers and acquisitions. Which TWO of the following might be advantages of this form of strategic development?

Currently WRSX adopts a multi-domestic approach to managing its subsidiaries. Which TWO of the following points are advantages of such an approach?

If WRSX, or one of its competitors, decided to try to increase market share by offering higher quality services whilst simultaneously seeking ways of lowering costs in order to lower prices, this is an example of which kind of competitive strategy according to the 'Strategy Clock'?

Which TWO of the following are sensible reasons for WRSX to avoid diversifying into new activities beyond its core marketing services?

Using the Ashridge Parenting Matrix (Goold and Campbell), match the following terms to the most appropriate explanations of how subsidiary businesses might fit with the parent organisation.

Interactive and digital media are presenting many new innovation opportunities for advertising agencies. Match the following innovation concepts to the most appropriate explanations.

Match the following terms used in the BCG Growth- Share matrix to the most appropriate explanation.