management ch 7

Having successfully led a global diversification strategy for your organization, you have been asked to be the keynote speaker at a conference on globalization. Which of the following are advantages of diversifying internationally that you might cite in your address?

- Companies may be able to locate their facilities closer to customers or to raw materials. -After gaining entry to a country's market, companies may be able to leverage their presence in the country to expand their product offerings there. -Companies may be able to use one facility to serve a larger number of customers.

Analysts forecast extreme disruption to the economic, political/legal, and technological environments over the next decade. The board would like to reassure investors that profits will remain relatively stable. Based on this information, which corporate-level strategy would you lean toward?

unrelated diversification strategy -The choice that involves the greatest degree of diversification is unrelated diversification. This may be a desirable strategy for this corporation because the more diversified a corporation is, the less any particular disruption to the environment will affect a large proportion of its businesses

Theo Chocolate has decided to purchase a fleet of climate controlled trucks which will allow them to distribute and deliver their products to grocery stores across the U.S. This is an example of:

vertical integration

Which of the following is an example of a way in which Theo Chocolate uses a distinctive competence to achieve competitive advantage?

Being the only organic, fair trade, and vertically integrated chocolate brand -A distinctive competence is something a company does better than its competitors

When conducting a SWOT analysis, information about turnover, profit margins, and staff quality can be used to identify:

company strengths and weaknesses

Theo Chocolate is ready to take their products abroad. Debra, Theo's Chief Marketing Officer, is certain that Japanese consumers will love their current ginger or orange chocolate bar flavors and customers in India would like the curry and coconut. She also feels confident that their current simple packaging will not need to be altered in either country as customers will be able to understand the product flavor by the picture on the package. Which type of global corporate strategy is Debra considering?

global strategy -Debra is considering a global strategy. This type of strategy treats the world as a single global market and products and advertising are standardized.

Theo Chocolate is ready to take their products abroad. Debra, Theo's Chief Marketing Officer, has decided that the company needs to add Matcha green tea, wasabi, and red bean flavors to their chocolate bars in order to customize their products to Japanese tastes. For India, Debra thinks saffron and cardamom flavors would be best. She knows there is a lot of industry competition in other countries, so Theo will have to spend some time considering how to market the products abroad. Which type of global corporate strategy is Debra considering?

multi domestic strategy -This would be an example of a multidomestic strategy because Theo would adapt their product to meet local tastes and needs with flavors such as Matcha green tea and wasabi for Japan and saffron for India. A multidomestic strategy handles markets independently for each country and tailors advertising in this way.

vertical integration

occurs when a company expands into businesses that either produce the supplies needed to make products and services or that distribute and sell those products and services to customers

When referring to a SWOT analysis, the letter O stands for________ , and it refers to factors that are_______ to the organization.

opportunities, external -A SWOT analysis is a critical review of the organization and its environment that takes place during the strategy formulation process. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are internal to the organization, while opportunities and threats are external to the organization.

Although Max Trefethan's company has creative employees with many ideas, it has no design team to build product prototypes. This probably is an

organizational weakness

Since its founding in 2002, Crocs has made shoes. It makes shoes for women, men, and children and for casual and work settings, but it doesn't make anything except footwear. Crocs is using a ______ strategy.

single product

After a company has analyzed the environments in which it operates and develops a specific plan of action, it becomes time for

strategy implementation

Cisco managers sat down recently to review the portfolio of their company. They looked at all of the businesses the company had acquired in the last year and determined how much money each acquisition was making for Cisco. They then decided which companies to keep and which to spin off.

Corporate-Level Strategy -This is a corporate-level strategy, because Cisco managers are reviewing all of the businesses that make up the company at once. They are trying to determine what industries Cisco should be in and to determine how they should spread the company's assets across different kinds of businesses.

If the company has decided to use Miles and Snow's analyzer strategy, which of the following actions would best support this strategy?

Develop decision-making processes that optimize goal setting. -With the analyzer strategy, the company maintains some businesses at the same time as seeking to enter new markets. Balancing the allocation of resources appropriately across these competing needs can be quite challenging, so it will be important for top managers in particular to exercise robust strategic control

Which of the following factors should be classified as a threat for the team?

During the off-season, another team in the league signed players whose skills matched or exceeded those of the current champions. -A SWOT analysis would identify the other team's starting rotation as a threat, because it poses a danger to the championship team and is occurring outside the organization.

Gilberto was asked to analyze businesses by classifying them as winners, losers, question marks, average businesses, and profit producers. He was most likely using the

Ge Business Screen -The GE Business Screen is a method of evaluating businesses along two dimensions: 1) industry attractiveness; and 2) competitive position. It is often described as a more in-depth version of the BCG matrix, and classifies businesses as winners, losers, question marks, average businesses, and profit producers.

Given that UNIQLO is in the growth stage, with demand high and little competition, which of the following would be appropriate activities to include in the company's short-term plan?

Research whether supplies will be sufficient to provide necessary inputs to the manufacturing plants

Given all of the factors listed in the preceding question, what strategy would make the most sense for the championship team as it prepares for the upcoming season?

Sign a free-agent outfielder to bolster the current roster and sign the young pitchers to long-term contracts. -The most effective strategy for this team would be to sign a free-agent outfielder to bolster the current roster and sign the young pitchers to long-term contracts. Doing so would take advantage of the team's strengths and opportunities and minimize the team's weaknesses.

BCG Matrix

The Boston Consulting Group (BCG) matrix assists in the portfolio decision-making process. Think about the BCG matrix this way: The relative market growth rate shows how many customers an industry is likely to have in the future. The higher the relative market growth rate, the less risky an investment is because there are more customers for a company to capture. Market share indicates how many customers a business has now. The higher the market share, the better the position of the company within its industry. The best investment opportunities are stars—companies that have high relative market share and high market growth rates. Next are question marks. These companies have low relative market share, but high market growth rates. Question marks are worth a gamble if you think the company will gain market share over time. A cash cow is a company that has a high relative market share, but a low market growth rate. Because these companies have no future, it is best to "milk" them: Take the profits they give you and invest them somewhere else. Last are the dogs—companies with a low relative market share and low market growth rate. There is no point in investing in a dog. It is better to sell it and focus your attention and resources on a star or a question mark.

If the company uses Porter's cost leadership strategy, what should marketing and sales emphasize

The good value of the company's products -An overall cost leadership strategy seeks a competitive advantage through low costs and low prices. For marketing and sales, this means emphasizing to customers not just the low price of a product but also its good value.

Seattle, home to Theo Chocolate, experiences around 155 days of rain per year. CEO of Theo, Joe Whinney, recently purchased a umbrella company which will produce umbrellas in various colors and sizes. This is an example of:

Unrelated diversification -If Theo Chocolate were to purchase an umbrella company, it would be unrelated diversification because it is not similar to any business that Theo is currently in. There is no direct connection to Theo's existing business. Unrelated diversification may allow companies efficiencies in cost or production

Simply having a strategy does not ensure success.________ results when the strategy is actually implemented in a way that leads to the desired results.

an effective strategy

During the first 10 months of 2014, spending-per-customer declined at UNIQLO's stores in Japan. As a result, beginning in October 2014, top management changed the focus of the company's marketing. Instead of emphasizing low prices, the company began highlighting its use of high-quality materials to restimulate interest in its current clothing lines, and it continued to look at aggressively expanding the number stores in various countries. Which type of strategy was UNIQLO using

analyzer

Seattle-based Theo Chocolate makes organic and Fair Trade chocolate bars. Its management team includes CEO Etienne Patout. Suppose Patout were deciding on a pricing strategy for the company's chocolate bars but no other company products. This is a ______ strategic decision. To make this decision, Patout would have to take which of the following actions? Check all that apply

business - level -Evaluate the intensity of competition and competitors' pricing of candies. -Choose one of three approaches for selling chocolate bars: low-cost, differentiation, or focus. -Evaluate what resources the company has to devote to manufacturing and selling chocolate bars.

At Apple, managers ask, "Should our next iPad product be innovative and new, so we can charge a higher price for it, or should we consider going down one more size, so people with less money can purchase an iPad?"

business level strategy -This is a business-level strategy question, because managers are concerned only with Apple's iPad product. If more enterprises were compared with each other, it would be a corporate strategy.

Last week, senior managers in the Post-it® Note division at 3M met to determine the best way to handle their product. Regardless of how 3M positions its other products, Post-it Notes will continue to be widely sold at a premium price. The company will continue to develop new Post-it products to attract new buyers.

business level strategy -This is a business-level strategy, because managers are concentrating on Post-it Notes, not any of the other products that 3M sells.

Never previously known as a computer hardware company, Microsoft decides to enter the tablet manufacturing business, producing the Microsoft Surface.

corporate level strategy -This is a corporate-level strategy, because Microsoft is actually changing the kind of business in which it engages. Although Microsoft has made some hardware in the past, the Surface will be its first complete computer. That changes the nature of Microsoft's industries.

ZombieSmith manufactures gaming miniatures. Its highly specialized products and targeted customer base indicate that ZombieSmith is using a(n)_______ to gain a competitive advantage

focus strategy -A focus strategy is one in which an organization concentrates on a specific regional market, product line, or group of buyers

A maker of motorized scooters finds that its product line offers the same value proposition to people all over the world. This company probably uses a________ strategy.

global