Quiz 10: Strategy and International Business

An international strategy has to be adjusted to adapt, overcome, or exploit differences across countries and regions.

Strategy formulation is the process of performing all the activities necessary to do what has been planned.

Business strategy is concerned with the kind of business an organization should undertake.

Corporate strategy is concerned with the manner in which an organization should compete in the market.

In outsourcing, the company takes a function out of its home country and places the function in another country, generally at a lower cost.

Business-level strategies are intended to create differences between a firm's position and those of its rivals.

Only the primary activities make up a firm's value chain.

Purchasing, logistics, inventory, and customer service form the key value-chain activities of an organization.

Differentiation means that the firm seeks to make its products at the lowest cost possible relative to its competitors while maintaining a quality that is acceptable to consumers.

Economies of scope are similar in concept to economies of scale.

The disadvantage of a multidomestic strategy is that it cannot take advantage of economies of scale that could help decrease costs for the firm overall.

A multidomestic strategy is centralized and controlled by the home office and seeks to maximize global efficiency.

The multidomestic strategy has been more commonly used by European multinational firms because of the variety of cultures and markets found in Europe.

The disadvantage of a global strategy is that the firm faces more uncertainty because of the tailored strategies in different countries.

In northern England, KFC stresses gravy and potatoes, while in Thailand, it offers fresh rice with soy or sweet chili sauce. This is an example of a global strategy.

A global strategy emphasizes economies of scale and offers greater opportunities to utilize innovations developed at the corporate level or in one country in other markets.

Decisions about a firm's arenas may encompass its products, services, distribution channels, market segments, geographic areas, technologies, and even stages of the value-creation process.

Differentiators help one to determine which particular industry or geographic segments are a firm's prime competitive arenas.

Vehicles are the means for participating in targeted arenas.

Staging and pacing refer to how the firm will generate positive returns over and above its cost of capital.

During operational planning, an organization's top management analyzes their competitive opportunities and threats as well as the strengths and weaknesses.

The controlling function requires monitoring performance so that it meets the performance standards established by the organization.

Job design involves organizing jobs so that each position makes productive use of an individual's talents.

Leading involves setting performance standards based on the company's objectives, measuring and comparing actual performance against standards, and taking corrective action when necessary.

Performance standards can be measured through financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals.

Strategy implementation is the process of: A) deciding which strategies to follow in order to diversify. B) performing all the activities necessary to do what has been planned. C) deciding the businesses in which an organization would compete. D) addressing the issue of the kind of strategies an organization would follow. E) devising plans to add value to the existing line of business.

In _____, the company takes a function out of its home country and places the function in another country, generally at a lower cost. A) offshoring B) co-sourcing C) importing D) open-sourcing E) homesourcing

_____ refers to work that is contracted to a nondomestic third party. A) Homesourcing B) International outsourcing C) Open-sourcing D) Offshoring E) Importing

Outsourcing involves: A) diversifying into a new business. B) the sale of products or services in one country that are sourced in another country. C) the company delegating an entire process to the outsource vendor. D) guiding the choice of markets that a firm competes in. E) performing a service by staff from within an organization and also by an external service provider.

Which of the following refers to the shared principles, standards, and goals of an organization that are included in the mission statement or as a separate statement? A) Differentiation B) Cost leadership C) Vision statement D) Vertical scope E) Organizational values

_____ refers to an organization's statement of purpose that describes who the company is and what it does. A) Vision statement B) Value chain C) Mission statement D) Geographical scope E) Horizontal scope

_____ refers to the using of the organization's strengths in a way that cannot be easily duplicated by other firms or made less valuable by changes in the external environment. A) Offshoring B) Strategy formulation C) Strategic intent D) Synergy E) Sustainable competitive advantage

_____ refer(s) to the future-oriented declaration of the organization's purpose. A) Strategic intent B) Goals and objectives C) Organizational values D) Mission statement E) Vision statement

The acronym P-O-L-C is the framework that managers use to understand and communicate the relationship between: A) corporate strategy and business strategy. B) threats and opportunities. C) strategy formulation and strategy implementation. D) the vision statement and mission statement. E) offshoring and international outsourcing.

_____, which are a part of the SWOT analysis, assess the external attractive factors that represent the reason for a business to exist and prosper. A) Strengths B) Weaknesses C) Threats D) Opportunities E) Strategies

_____, which are a part of the SWOT analysis, include factors beyond one's control that could place the strategy or even the business itself at risk. A) Strengths B) Efficacies C) Threats D) Opportunities E) Weaknesses

_____ refers to the sequence of activities that include the various steps of the supply chain as well as additional activities, such as marketing, sales, and service. A) Value chain B) Differentiation C) Cost leadership D) Scope E) Homesourcing

_____ include(s) the geographic markets the company serves, as well as the product and customer segments in which it competes. A) Scale B) Scope C) Critical path D) Company efficiency E) Economies of scale

_____ means that the firm seeks to make its products or provide its services at the lowest cost possible relative to its competitors while maintaining a quality that is acceptable to consumers. A) Geographical scope B) Differentiation C) Offshoring D) Cost-leadership strategy E) Homesourcing

_____ refers to all the activities, from the gathering of raw materials to the sale of the finished product that a business goes through to make a product. A) Outsourcing B) Offshoring C) Cost leadership D) Differentiation E) Vertical scope

Differentiation refers to: A) all the activities from the gathering of raw materials to the sale of the finished product that a business goes through to make a product. B) creating products or providing services at the lowest cost possible relative to its competitors while maintaining a quality that is acceptable to consumers. C) creating unique value for the customer through advanced technology, high-quality ingredients or components, product features, and superior delivery time. D) the number of similar businesses or business activities at the same level of the value chain. E) the cost advantages that a business obtains through expanding in size.

The firms following a(n) _____ invest in the activities that create the unique value but look for ways to reduce cost in nonvalue activities. A) integrated cost-leadership and differentiation strategy B) geographic scope C) differentiation strategy D) cost-leadership strategy E) diversification strategy

Diversification refers to: A) moving from an industry market segment into another, related segment. B) the number of similar businesses or business activities at the same level of the value chain. C) moving from one industry into another. D) cost advantages that a business obtains through expanding in size. E) the sale of products or services in one country that are sourced in another country.

_____ refer(s) to the cost advantage that a business obtains through expanding in size. A) Economies of scope B) Synergies C) Network externality D) Vertical scope E) Economies of scale

_____ refer(s) to efficiencies gained from demand-side changes, such as increasing the range of marketing and distribution. A) Scale B) Value chain C) Cost leadership D) Differentiation E) Economies of scope

_____ refers to the number of different topographical markets in which an organization participates. A) Geographic scope B) Value chain C) Differentiation D) Cost leadership E) Offshoring

The U.S. fast-food chain Sonic will only open new outlets in states that are adjacent to states where it already has stores. This is an example of: A) differentiation. B) increasing vertical scope. C) diversification. D) offshoring. E) increasing geographic scope.

_____ strategy maximizes local responsiveness by giving decentralizing decision-making authority to local business units in each country so that they can create products and services optimized to their local markets. A) Differentiation B) Multidomestic C) Global D) Cost-leadership E) Transnational

A(n)_____ strategy is centralized and controlled by the home office and seeks to maximize worldwide efficiency. A) global B) differentiation C) multidomestic D) transnational E) cost-leadership

If the world were flat: A) one could sell the same products and services in the same way in every country. B) one has to sell products and services according to the needs of the host country. C) one needs to decentralize decision-making authority to local business units in each country. D) a firm needs to pursue different strategies in different locations to take advantage of economies of scale. E) a firm would need to focus on maximizing local responsiveness.

In Holland, KFC makes a potato-and-onion croquette, while in France it sells pastries alongside chicken. KFC: A) has centralized its business processes to enable it to provide the services mentioned. B) assumes that consumer needs and desires vary by country. C) assumes that the world is flat. D) sells the same products in the same way in every country. E) is following the cost-leadership strategy.

_____ strategy is highly desirable and appropriate for many industries, given the differences across markets and the similarities being fostered by the flatteners. A) Differentiation B) Global C) Cost-leadership D) Multidomestic E) Transnational

Dell found that it had to suspend its direct model in India for a temporary period because it needed local intermediaries to help develop both a base of business and acceptable levels of customer awareness and sophistication. This is an example of: A) an organization increasing its horizontal scope. B) diversification. C) a cost-leadership strategy. D) international strategy accommodating local environments. E) an organization operating in a flat world.

_____ refers to the constellation of business, corporate, and international strategy elements, which managers must consider when making decisions. A) Five Forces Analysis B) Cluster model C) Strategy diamond D) Porter's four corners model E) Strategic grouping

Which of the following are what drive potential customers to choose one firm's offerings over those of competitors? A) Differentiators B) Arenas C) Economic logic D) Staging and pacing E) Mission statement

Differentiators are that facet of the strategy diamond which: A) relate to the means for participating in targeted arenas, such as alliances, organic growth, or acquisition. B) comprise features and attributes of a company's products or services that help it beat its competitors in the marketplace. C) refer to the timing and speed of strategic moves. D) refer to how a firm will generate positive returns over and above its cost of capital. E) identify the areas in which a firm will be active, such as industry segments, geographic markets, and channels segments.

_____ refer(s) to how a firm will earn a profit; that is, how a firm will generate positive returns over and above its cost of capital. A) Staging and pacing B) Vehicle C) Arenas D) Economic logic E) Differentiators

Staging and pacing is that facet of the strategy diamond which: A) refers to the timing and speed of strategic moves. B) relates to the means for participating in targeted arenas, such as alliances, organic growth, or acquisition. C) identifies the areas in which a firm will be active, such as industry segments, geographic markets, and channels segments. D) comprises features and attributes of a company's product or service that help it beat its competitors in the marketplace. E) refers to how a firm will generate positive returns over and above its cost of capital.

Vehicles refer to: A) how a firm will generate positive returns over and above its cost of capital. B) the features and attributes of a company's product or service that help it beat its competitors in the marketplace. C) the areas in which a firm will be active, such as industry segments, geographic markets, and channels segments. D) the means for participating in targeted arenas. E) the timing and speed of strategic moves.

Acquisitions, alliances, and organic investment and growth are examples of: A) outsourcing to save costs. B) differentiators that help firms beat competitors in the marketplace. C) staging choices which reflect available resources. D) vehicles for entering a new arena. E) threats posed to an organization.

_____ refers to the most long-range planning, typically looking three years or more into the future and setting a plan for how best to position the organization to compete effectively in the environment. A) Organizational design B) Organizing C) Operational planning D) Tactical planning E) Strategic planning

Operational planning refers to: A) planning with a time horizon of one to three years and specifies fairly concrete ways to implement the strategic plan. B) planning with a time horizon of less than one year and specifies concrete action steps to achieve organization-wide strategic and tactical plans. C) planning with a time horizon of three years or more and setting a plan to best position the organization to compete effectively in the environment. D) the decision about the nature of the jobs in an organization. E) a management function that develops an organizational structure and coordinates human resources within that structure to achieve organizational objectives.

_____ refers to a plan with a time horizon of one to three years and specifies concrete ways to implement the strategic plan. A) Controlling B) Organizational design C) Organizing D) Operational planning E) Tactical planning

_____ is a management function that develops an organizational structure and coordinates human resources within that structure to achieve organizational objectives. A) Decentralizing B) Organizing C) Controlling D) Leading E) Planning

_____ is the function of management that involves setting objectives and determining a course of action for achieving these objectives. A) Implementing B) Organizing C) Controlling D) Job design E) Planning

The first step in the planning process is: A) establishing organizational objectives. B) formulating and ensuring the effective implementation of plans. C) the SWOT analysis. D) identifying multiple ways of achieving organizational objectives. E) monitoring the progress and evaluating the success of the plans.

Decisions made about the nature of jobs within the organization are generally called _____ decisions. A) job design B) organizational design C) controlling D) strategic planning E) leading

In the past, _____ meant narrowing a job's tasks so that the individual could be more proficient at those tasks. A) job design B) organizational design C) job analysis D) job description E) tactical planning

The _____ function requires monitoring performance so that it meets the performance standards established by the organization. A) controlling B) leading C) planning D) organizing E) job design

Controlling refers to: A) monitoring performance so that it meets the performance standards established by the organization. B) decisions made about the structure of an organization. C) the function of management that involves setting objectives and determining a course of action for achieving these objectives. D) a management function that develops an organizational structure and coordinates human resources within that structure to achieve organizational objectives. E) an organization's analyses of its competitive opportunities and threats as well as the strengths and weaknesses.

What are the key issues addressed by an organization's corporate strategy?

What does the "international strategy" of an organization refer to?

Explain vertical scope.

Why is increased horizontal scope attractive to organizations?

Explain multidomestic strategy.

What are the two critical factors that organizations have to keep in mind when selecting differentiators?

What is staging and pacing?

What are the steps an organization needs to take while setting objectives and determining a course of action for achieving these objectives?

What are the three primary types of plans and planning?

What are the three generic business-level strategies firms choose from to establish and defend their desired strategic position against rivals?

_____ refers to work that is contracted to a nondomestic third party.

A(n) _____ is the organization's statement of purpose and describes who the company is and what it does.

A(n) _____ is a future-oriented declaration of the organization's purpose.

_____ includes the geographic markets the company serves as well as the product and customer segments in which it competes.

_____ strategy means that the firm seeks to make its products or provide its services at the lowest cost possible relative to its competitors while maintaining a quality that is acceptable to consumers.

_____ stems from creating unique value to the customer through advanced technology, high-quality ingredients or components and product features.

A(n) _____ strategy maximizes local responsiveness and ensures that local business units in each country create products and services optimized to their local markets.

In case of an organization following a(n) _____, the strategic business units operating in each country are assumed to be interdependent, and the home office attempts to achieve integration across these businesses.

_____ is highly desirable and appropriate for some industries, given the great differences as well as similarities that exist across markets.

The group of five elements, which managers must consider when making decisions, make up the _____.

_____ refer to areas in which a firm will be active.

_____ are features and attributes of a company's product or service that helps it beat its competitors in the marketplace.

Decisions made about the structure of an organization are generally referred to as _____ decisions.

_____ involves organizing jobs so that each position makes productive use of an individual's talents.

The _____ function requires monitoring performance so that it meets the performance standards established by the organization.