Ch 9

A broad statement that defines the organization's scope is the mission statement. T/F

True

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. T/F

True

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. T/F

True

Tactical/operational plans are more detailed than strategic plans. T/F

True

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?

How will this customer value be created?

Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because: A. all of B, C, and D. B. resources are always scarce. C. there are many alternative ways to use the company's scarce resources. D. managers are forced to make choices regarding what to do and what not to do. E. two of B, C, and D.

all of B, C, and D.

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.

all of the above

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.

all of the above.

An itemized projection of revenues and expenses for a future time period is a: A. sales forecast. B. budget. C. marketing plan. D. strategic plan. E. none of the above.

budget

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.

competitive strategies.

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

define the firm's mission.

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.

firm's chief executive officer

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

global strategy

Scenarios: A. all of B, C, and D. 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. extrapolate from past data to make predictions. E. two of B, C, and D.

have an objective of envisioning possible futures that might lie outside their traditional frame of

The new directions in planning: A. two of B, C, D, and E. B. have made strategic planners dominant in the planning process. C. have brought operating managers into the planning process. D. have relieved the firm's chief executive officer of the responsibility for strategic planning. E. have made the use of computers and professional planners essential for the planning process.

have brought operating managers into the planning process.

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.

home replication strategy

In the new strategic planning process: A. top management is assigning strategic planning to teams of line and staff managers from the same business. B. interaction with important customers and suppliers should be included. C. governments and other stakeholders should be direct participants. D. all of the above. E. two of A, B, and C.

interaction with important customers and suppliers should be included.

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

manufacturing; marketing

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.

mission statement

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.

mission statement

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.

none of the above

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.

prefer verifiable objectives

According to the text, the strategic planning process provides a formal structure in which managers will: A. two of B, C, and D. B. set corporate objectives. C. implement strategies. D. manage relationships with government and society. E. all of B, C, and D.

set corporate objectives

Tactical plans: A. are fairly broad compared to strategic plans. B. spell out in detail how objectives will be reached. C. are broad guidelines to assist in handling recurring problems. D. are less specific than strategic plans. E. two of the above.

spell out in detail how objectives will be reached

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.

strategic planning

In planning, there has recently been a decided move among many firms: A. to use advanced statistical techniques to help produce voluminous and detailed strategic plans. B. toward a less structured format and a shorter plan. C. to concentrate on factors that can be easily quantified. D. to make detailed forecasts and project them out at least five years. E. two of the above.

toward a less structured format and a shorter plan

A strategic plan: A. will be prepared when the tactical plan is finalized. B. describes how the firm's goals will be met. C. contains sales forecasts and budgets. D. all of the above. E. two of A, B, and C.

two of A, B, and C

Tactical plans: A. are operational plans. B. are broad, operational plans on which strategic plans are based. C. are specific and short-term compared to strategic plans. D. all of the above. E. two of A, B, and C.

two of A, B, and C

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

vision statement

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.

vision statement

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. T/F

False

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

False

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. T/F

False

After setting corporate objectives, the company management must define the company's vision and mission. T/F

False

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. T/F

False

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. T/F

False

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. T/F

False

Objectives must be quantified in order to be useful. T/F

False

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

False

Strategic planning processes are something that only the company's most senior executives are involved with. T/F

False

The first step in the process of strategic planning is to define the company's business and mission. T/F

False

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. T/F

False

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 T/F

False

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

False

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. T/F

False

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

False

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

False

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

False

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

Multidomestic strategy

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

None of A, B, or C is incorrect

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

True

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 firm wide. T/F

True

Objectives direct the firm's course of action, maintain it within the boundaries of the stated mission, and ensure its continuing existence. T/F

True

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. T/F

True

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. T/F

True

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. T/F

True

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. T/F

True

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. T/F

True

Plans for the best-or worst-case scenarios or for critical events that could have a severe impact on the firm are known as: A. scenario plans. B. strategic plans. C. contingency plans. D. emergency plans. E. none of the above.

contingency plan

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.

create value for customers and for which customers are willing to pay.

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. D. all of the above. E. two of A, B, and C.

create value for customers and for which they are willing to pay.

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.

two of A, B, and C

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.

two of A, B, and C

International firms have found it necessary to institute formal global planning: A. all of B, C, and D. B. to eliminate the practice of informal planning. C. to provide top management with a means to identify threats and opportunities worldwide. D. to provide consistency of action among the firm's managers. E. two of B, C, and D.

two of B, C, and D

Frederick Gluck, management consultant, says that for firms to develop the flexibility to compete, managements must make the following change(s) in their planning methods: A. top management must dedicate more time to deciding how things ought to be done. B. the nature of planning must change from being an exercise in forecasting to being an exercise in creativity. C. planning processes and tools that assume a future much like the past must be replaced. D. strategic planning must be restored to strategic planning departments. E. two of the above.

two of the above

In the traditional strategic planning approach: A. the CEO and the head of planning got together to devise a corporate plan, which would then be handed to the operating people for execution. B. interaction with important customers and suppliers was included. C. governments and other stakeholders were direct participants. D. tended to fall victim to collective mind-sets about the competitive environment. E. two of the above

two of the above

In the traditional strategic planning approach: A. the CEO and the head of planning got together to devise a corporate plan, which would then be handed to the operating people for execution. B. interaction with important customers and suppliers was included. C. governments and other stakeholders were direct participants. D. tended to fall victim to collective mind-sets about the competitive environment. E. two of the above.

two of the above. Both A and D are correct, so E is the appropriate response

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.

value chain analysis