Chapter 8 - Strategy Formulation and Implementation

The internationalization of the marketplace and the increasing number of entrepreneurial firms in the global economy have limited the prospects of internationalization available to small and new-venture businesses. True False

False

Select all that apply Identify the components of the financial goals of multinational corporations (MNCs) that are emphasized in strategy formulation. (Check all that apply.) Multiple select question. Total sales volume Foreign exchange management Compensation and benefits Taxation

Foreign exchange management Taxation

Select all that apply Identify the true statements about the total quality management (TQM) approach to formulating and implementing strategies. (Check all that apply.) Multiple select question. TQM involves operationalizing quality by meeting or surpassing the expectations of customers. In multinational corporations that follow TQM, the top management emphasizes the elimination of variability in the production process. In multinational corporations that follow TQM, the top management develops the quality strategy and diffuses it throughout the organization. TQM focuses exclusively on traditional inspection and statistical quality control.

TQM involves operationalizing quality by meeting or surpassing the expectations of customers. In multinational corporations that follow TQM, the top management develops the quality strategy and diffuses it throughout the organization.

The _____________________ ___________________ refers to a worldwide strategy based on cost leadership, differentiation, and segmentation.

economic imperative

In the context of strategic management, ___________ _____________refers to the production and distribution of products and services of a homogeneous type and quality on a worldwide basis.

global integration

According to a study, the extent to which a firm carries out strategic planning is an important variable in determining performance. In the context of the international strategy of multinational corporations (MNCs), this extent is known as _____. strategic sourcing strategic recruitment planning intensity planogramming

planning intensity

The process of determining an organization's basic mission and long-term objectives and then implementing a plan of action for pursuing this mission and attaining these objectives is known as ____________ ____________.

strategic management

Match the basic strategies adopted by multinational corporations (MNCs) (in the left column) with their features (in the right column). A global strategy A transnational strategy -It is best suited for MNCs that face high cost pressures and low demand for localized product offerings. -It is best suited for MNCs that face high cost pressures and high demands for local responsiveness.

A global strategy -It is best suited for MNCs that face high cost pressures and low demand for localized product offerings. A transnational strategy -It is best suited for MNCs that face high cost pressures and high demands for local responsiveness.

Identify a strategy often adopted by multinational corporations to meet the demand for global integration. A strategy that emphasizes varying degrees of quality standards A strategy that responds to different consumer tastes in segmented markets A strategy that is highly sensitive to differentiation and local adaptation A strategy that focuses on globalization and mass customization

A strategy that focuses on globalization and mass customization

__________________ _________________is defined as a combination of innovative, proactive, and risk-seeking behavior that crosses national boundaries and is intended to create value for organizations.

Blank 1: International Blank 2: entrepreneurship

A(n) ______________ _____________________ is an integrated business strategy that emphasizes the demands for both global integration and local responsiveness.

Blank 1: transnational Blank 2: strategy

Select all that apply What are the typical forms of total quality management? Process reengineering that helps find and get rid of redundant and wasteful tasks and efforts Cross-training employees to fulfill the jobs of all members in their work group Efforts that ensure stable and predictable process results by eliminating process variations Emphasis on advertising and marketing to ensure the success of a product or service Rewards systems that reinforce quality performance by employees

Cross-training employees to fulfill the jobs of all members in their work group Process reengineering that helps find and get rid of redundant and wasteful tasks and efforts Rewards systems that reinforce quality performance by employees

Select all that apply In the context of setting up operations in a host country, which of the following are factors that attract a multinational corporation (MNC) to a specific locale? Easy access to markets Strong presence of organized labor Strict taxation laws Access to transportation facilities and electric power

Easy access to markets Access to transportation facilities and electric power

In the present day, most companies consider middle management responsible for devising and implementing strategies. True False

False

Multinational corporations that have an exclusive focus on economies of scale and standardize their products and services across the globe use transnational strategies for production and marketing. True False

False

In the context of the conflicting demands for global integration and national responsiveness, which of the following is true of a multinational corporation's (MNC's) global strategy? It is an integrated strategy mainly based on price competition. It is a mixed strategy that combines low demand for integration and responsiveness. It is a differentiated strategy that emphasizes local adaptation. It is an integrated strategy that emphasizes both global integration and local responsiveness.

It is an integrated strategy mainly based on price competition.

Identify a true statement about a multinational corporation's international strategy in relation to the conflicting demands for global integration and national responsiveness. It is characterized by standardization of products and services across countries. It involves the challenge of localizing the corporation's global focus. It arises as a result of high pressures to obtain economies of scale and the benefits of customization. It is characterized by adaptations to meet customer demands in specific markets.

It is characterized by standardization of products and services across countries.

In the context of the conflicting demands for global integration and national responsiveness, identify the strategy adopted by multinational corporations when the requirement for differentiation is high and the need for awareness is low. Transnational strategy International strategy Multi-domestic strategy Global strategy

Multi-domestic strategy

Select all that apply What are the "four Ps" of marketing? (Check all that apply.) Multiple select question. Place People Price Profit Promotion Product

Place Price Promotion Product

Select all that apply In the context of the marketing strategy of a multinational corporation, which of the following components of marketing are controlled by local conditions? (Check all that apply.) Multiple select question. Product Price Promotion Place

Promotion Place

Select all that apply Which of the following are involved in the environmental scanning stage of strategic planning? (Check all that apply.) Identifying the key success factors for a firm Studying the role of all potential competitors and the relationships surrounding those competitors Awareness of demographic shifts including age, education, and income, teamed with extensive knowledge of consumer attitudes Studying the strengths and weaknesses of managerial, technical, material, and financial resources of a firm Monitoring technological changes Knowledge of laws and regulatory guidelines within an area Knowledge of different political systems and the current state of affairs in specific areas

Studying the role of all potential competitors and the relationships surrounding those competitors Awareness of demographic shifts including age, education, and income, teamed with extensive knowledge of consumer attitudes Monitoring technological changes Knowledge of laws and regulatory guidelines within an area Knowledge of different political systems and the current state of affairs in specific areas

In the context of the conflict between the demands for global integration and national responsiveness, which of the following statements is true about the situation that requires multinational corporations (MNCs) to adopt global strategies? There is a low need for integration and little awareness of differentiation. There is less requirement for integration for and a strong need for differentiation. There is a strong need for integration and a low awareness of differentiation. There is a strong requirement for integration and a high awareness of differentiation.

There is a strong need for integration and a low awareness of differentiation.

Select all that apply Identify the opportunities available to multinational corporations (MNCs) that employ first-mover strategies in emerging economies that are going through rapid changes (Check all that apply.) Multiple select question. They are able to establish beachhead positions. They are able to anticipate and prepare for competition. They are able to determine pricing advantages. They are able to enjoy free-rider effects.

They are able to establish beachhead positions. They are able to anticipate and prepare for competition.

What is the primary objective of a firm's internal resource analysis? To identify consumer attitudes To recognize the changes in technology To identify barriers to the firm's entry to a new market To match external opportunities with internal capabilities

To match external opportunities with internal capabilities

A(n) _________________ _____________________ approach to management involves strategic formulation and implementation using strategies of total quality management to meet or exceed the expectations of customers and continuously improve products or services.

quality imperative

Matching Question Match the basic strategies adopted by multinational corporations (MNCs) (in the left column) with their descriptions (in the right column). An international strategy A multi-domestic strategy A global strategy A transnational strategy -MNCs use this strategy when they face strong demands for differentiation and integration. -MNCs possess valuable core competencies that host-country competitors do not have and face minimal pressures for local responsiveness and cost cutting. -MNCs face high pressure for local responsiveness and low pressures for reductions in cost. -MNCs use this strategy in order to benefit from scale economies in production, distribution, and marketing.

An international strategy -MNCs possess valuable core competencies that host-country competitors do not have and face minimal pressures for local responsiveness and cost cutting. A multi-domestic strategy -MNCs face high pressure for local responsiveness and low pressures for reductions in cost. A global strategy -MNCs use this strategy in order to benefit from scale economies in production, distribution, and marketing. A transnational strategy -MNCs use this strategy when they face strong demands for differentiation and integration.

Select all that apply In the context of first-mover strategies, which of the following are the significant economies that are associated with being the first to enter a market in a particular industry and economic environment? (Check all that apply.) Multiple select question. Being able to attain scale economies that arise from opportunities for obtaining a greater market share Being able to form alliances with the most attractive local partners Being able to capture learning effects that are key to increasing market share Being able to capitalize on opportunities to set standards in the industry Being able to determine the speed of the evolution of market and technology

Being able to attain scale economies that arise from opportunities for obtaining a greater market share Being able to form alliances with the most attractive local partners Being able to capture learning effects that are key to increasing market share

The process of providing management with accurate forecasts of trends related to external changes in geographic areas where the firm currently is doing business or is considering setting up operations is known as ________________ _________________.

Blank 1: environmental Blank 2: scanning

In the context of the conflicting needs for global integration and local responsiveness, a(n) ____________ _________________ refers to a mixed strategy that combines low demand for integration and responsiveness.

Blank 1: international Blank 2: strategy

An internal resource analysis helps identify ____________ ________________ ________________(KSFs) that are necessary for a firm to compete effectively in a market niche.

Blank 1: key Blank 2: success Blank 3: factors

The process of providing goods and services in accord with a plan of action is known as ____________ _________________.

Blank 1: strategy Blank 2: implementation

In the context of combining country-specific and firm-specific factors in international strategy, match the types of advantages for multinational corporations (in the left column) with their descriptions (in the right column). Country-specific advantages (CSAs) Firm-specific advantages (FSAs) -These may include unique abilities proprietary to a firm that may be based on product or process technology, marketing or distributional skills, or managerial know-how. -These can be based on natural resource endowments, the labor force, education and skills, institutional protections of intellectual property, entrepreneurial dynamism, and so on.

Country-specific advantages (CSAs) -These can be based on natural resource endowments, the labor force, education and skills, institutional protections of intellectual property, entrepreneurial dynamism, and so on. Firm-specific advantages (FSAs) -These may include unique abilities proprietary to a firm that may be based on product or process technology, marketing or distributional skills, or managerial know-how.

Which of the following is true of a multi-domestic strategy in relation to the conflicting needs for global integration and national responsiveness? It primarily focuses on international standardization. It emphasizes local adaptation. It primarily focuses on price competition. It emphasizes economies of scale.

It emphasizes local adaptation.

Select all that apply Identify the true statements about the use of the economic imperative approach by firms in the formulation and implementation of strategy. (Check all that apply.) Multiple select question. It is used by firms that make strategic decisions based on the merits of the individual situation rather than political factors. It is used by firms that sell products for which a considerable part of value is created in the upstream activities of the industry's value chain. It is often employed by firms as part of the implementation of practices that are designed to make quality improvement an ongoing process. It is often used when a firm's product is viewed as a generic good and hence does not have to be sold based on name brand or support service.

It is often used when a firm's product is viewed as a generic good and hence does not have to be sold based on name brand or support service. It is used by firms that sell products for which a considerable part of value is created in the upstream activities of the industry's value chain.

Select all that apply What are the factors that benefit a multinational corporation (MNC) when choosing a country for setting up its operations? (Check all that apply.) Multiple select question. Absence of import regulations Emphasis on independent unionism in the host country Lack of restrictions on foreign investment Tax exemptions and other financial benefits offered by the host country High level of industrialization

Lack of restrictions on foreign investment Tax exemptions and other financial benefits offered by the host country High level of industrialization

Identify a true statement about the common considerations multinational corporations (MNCs) have when selecting a specific locale to set up operations. MNCs choose areas where the cost of running a small enterprise is much lower than that of running a large one. MNCs always prefer to start operations in urban or metropolitan areas, which are less expensive. MNCs tend to avoid clustering and opt for locations that are away from their competitors' operations. MNCs often set up operations near heavily unionized areas.

MNCs choose areas where the cost of running a small enterprise is much lower than that of running a large one.

Match the common areas of goal formulation for multinational corporations (MNCs) (in the left column) with their components (in the right column). Profitability Marketing Operations Finance Human resources -Optimum capital structure -Growth in sales volume -Compensation and benefits -Yearly earnings per share growth -Quality and cost control

Profitability -Yearly earnings per share growth Marketing -Growth in sales volume Operations -Quality and cost control Finance -Optimum capital structure Human resources -Compensation and benefits

Select all that apply What are the typical forms of total quality management? (Check all that apply.) Multiple select question. Rewards systems that reinforce quality performance by employees Process reengineering that helps find and get rid of redundant and wasteful tasks and efforts Efforts that ensure stable and predictable process results by eliminating process variations Emphasis on advertising and marketing to ensure the success of a product or service Cross-training employees to fulfill the jobs of all members in their work group

Rewards systems that reinforce quality performance by employees Process reengineering that helps find and get rid of redundant and wasteful tasks and efforts Cross-training employees to fulfill the jobs of all members in their work group

Select all that apply Why do multinational corporations (MNCs) often opt for advanced industrialized countries to make investments? They tend to have high-skilled and cheap labor. They offer the largest markets for goods and services. They require majority control of business operations to be in the hands of local partners. They tend to have legal restrictions related to imports that encourage a local presence.

They offer the largest markets for goods and services. They tend to have legal restrictions related to imports that encourage a local presence.

Which of the following is true of multinational corporations that use the political imperative approach to strategic management? They make decisions based on the merits of the individual situation rather than global economic trends. They view quality improvement as an ongoing process. They often use an international or global strategy. They sell products that have a large part of their value added in the downstream activities of the value chain.

They sell products that have a large part of their value added in the downstream activities of the value chain.

Select all that apply Why do multinational corporations require strategic management? (Check all that apply.) Multiple select question. To support unprofitable ventures using the revenue generated by profitable ventures To offer the right combination of price and financing to a carefully identified market segment To monitor their increasingly diversified operations in a constantly changing environment To ensure a steady flow of profit from new geographic markets through premium pricing

To monitor their increasingly diversified operations in a constantly changing environment To offer the right combination of price and financing to a carefully identified market segment

Multinational corporations require strategic management to discard unprofitable ventures to create capital for expansion into higher-growth product and/or geographic markets. True False

True

The three general areas that international management considers in strategy implementation are location of the operations, entry and ownership, and functions. True False

True

The __________ _______________ approach to strategic planning involves strategic formulation and implementation utilizing strategies that are country-responsive and designed to protect local market niches. Listen to the complete question

political imperative