MGMT CH 5 AND 6
strategic plans
plans to achieve strategic goals
Which of the following characteristics relates to countertrade agreements?
. Exporting that involves bartering products for other products instead of for currency
EU
Economic, political union of 28 countries
The World Bank
If Peru wants to purchase machine parts from a German company but lacks German marks, it will probably go to which of the following institutions to borrow the marks?
b. Exchange controls.
What term describes restrictions on the amount of a particular currency that may be bought or sold?
_____ of a plan is where the organization goes from the "thinking" mode to the "doing" mode.
a. Implementation
tactical goals
intermediate goals of the firm are designed to stimulate actions necessary for achieving the strategic goals
tactical plans
plans designed to achieve tactical goals
infrastructure
the physical facilities that support its economic activities such as railroads, highways, ports, airfields, utilities, power plants, schools, hospitals, communication systems, and commercial distribution systems
stars
those businesses that have high market shares and operate in industries experiencing major growth
licensing
trade arrangement where licensor allows company to use its company name, products, patents, brands, trademarks, raw materials, production processes
distinctive competence
what a firm does well relative to its competitors
In SWOT analysis, an ability or attribute that a company possesses that may give it a distinctive competence is called
. an opportunity.
ASEAN
10 southeast asian countries with goal to promote economic growth and overall progress in the area via trade and security
UK Bribery act-
2010, all organizations with business operations in the UK can be held liable for bribery, even if bribery did not occur in UK -NO BRIBERY IN UK
Organization of Economic Cooperation and Development (OECD)
An international economic organization comprised of 30 countries that accept the basic principles of free-market economies and representative democracy; recommends and promotes policies to improve the well-being of consumers and societies across the world
International Monetary Fund
Basic mission is to oversee the international monetary system and help ensure stable currencies and exchange rates throughout the world.
d. outsourcing.
You are the executive vice president of Banana Computer, Inc. You have a competitive machine, but your major competitor has the benefit of large-scale production, making its products less expensive to manufacture. In order to remain price-competitive, you send your parts and subassemblies to Mexico for the final stage of assembly, thereby taking advantage of
trading company
acquires goods in one country and sells them to buyers in another country
The purpose of a strategy is to
a. take advantage of what the organization does well, or hopes to do well.
strategic management
all the processes an organization undertakes to develop and implement its strategic plan
Webb-Pomerene Export Trade Act-
allows selected American firms desriring international trade to form monopolies in order to compete with foreign cartels (!918) -FOREIGN CARTELS ARE OKAY
business-level strategy
area of responsibility usually assigned to divisional-level managers
Which of the following refers to a set of activities intended to achieve goals, whether for an entire organization, department, or an individual?
b. Plan
cash cows
businesses that generate excess cash over what is needed for continued growth
strategy
course of action for implementing strategic plans and achieving strategic goals -general statement of actions and organization intends to take or is taking that is based on the fit of the organization with its external environment
The first step in strategic planning is
determining the mission and strategic goals.
World Trade Organization
global association of member countries that promotes free trade
strategic goals
goals set by higher managers that deal with such general topics as the firm's growth, new markets, or new goods and services
cartel-
group of firms or nations that agree to act as a monopoly and not compete with each other
World Bank
international bank for reconstruction and development -established and supported by the industrialized nations in 1946 to loan money to underdeveloped and developing countries
International business
is a narrower concept defined as the buying, selling, and trading of goods and services across national boundaries -falling political barriers, advancing communications and transportation technology are enabling many companies to sell products overseas
Global business (globalization)
is a strategy in which organizations treat the entire world or major regions of it as the domain for conducting business. Whole world rather than focusing on trade between two countries.
gross domestic product
market value of a nations total output of goods and services for a given period
Quota
maximum number of units of a particular product that may be imported into a country -prohibits dumping
North American Free Trade Agreement
merged Canada, US, and Mexco into one market by eliminating most tariffs and trade restrictions on agricultural and manufactured products among the three countries
dogs
minimal profits or even losses due to their low market share in slow growing markets
operational goals
more specific and address activities that must be performed before tactical goals can be fulfilled -short-term goals that are addressed to first-line managers and usually apply to specific work operations that lead to the production of goods and services
contract manufacturing
occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification; the final product carries the domestic firm's name
dumping
occurs when a country or business firm sells products at less than what it costs to produce them
Foreign Corrupt Practices Act- 1978
outlaws direct payoffs to and bribes from foreign governments or business officials by American companies. -NO BRIBES
Southern Common Market
poltical and economic agreement among the countries of bolivia, aragentina, brazil, venezuela, uruguay
importing
purchase of goods and services from a foreign source
Exchange control
restrictions on the amount of a particular currency that may be bought or sold
Which of the following characteristics relates to a business-level strategy?
The area of responsibility usually assigned to the divisional-level managers
divestment
strategy of selling off businesses that the company no longer wishes to maintain, either because they are failing or because the company has change strategy
direct invesment
The fact that the American company 3M owns a film-manufacturing facility in Italy is an example of
contingency plasn
alternate courses of action to be undertaken if certain organizational or environmental conditions change
Which of the following refers to a general statement of actions an organization intends to take or is taking that is based on the fit of the organization with its external environment?
b. Strategy
question marks
businesses that are viewed positively in the sense that they are located in attractive, fast growing markets, but for which there is a questions as to their ability to compete, given their low market share
Which of the following characteristics relates to contingency plans?
c. Alternate courses of action to be undertaken if certain organizational or environmental conditions change
What is meant by focus?
d. A business strategy in which the business concentrates on one part or segment of the market and tries to meet the demands of that segment
You sell Gourmet Mushrooms (GMs) at $100 an ounce. You have a secret source of supply, jealously guarded. Your GMs are better than your competitors' mushrooms, and only the very wealthiest Americans buy them. You are using the business strategy called
c. focus.
According to Hofstede's cultural dimensions theory, _____ tend to be self-reliant and place a high level of importance on freedom and ambition, while _____ place more value on the team than the individual.
c. individualists; collectivists
At even the largest and most affluent corporation, the strategic management process begins with
c. limited resources.
multinational corporation
corporation such as IBM, ExxonMobil, and Nestle that operates on a worldwide scale without significant ties to any one nation or region
MidAmerican Energy Holdings Company has doubled its wind energy capacity by installing windmills and high-tech batteries to make it a "cleaner" utility company. In high-tech renewable energy, this company has a
distinctive competence
The United States' prohibition of the importing of Cuban cigars is an example of
embargo
SWOT Analysis
evaluation of organizations internal strength and weaknesses and the opportunities and threats associated with the business's external environment
countertrade agreements
exporting that involves bartering products for other products instead of for currency
related diversification
firm's acquisition of a business hat has some connection with the company's existing businesses
conglomoerates
firms that pursue unrelated diversification strategies
When a company produces a high-tech, expensive bicycle aimed at serious and affluent bike enthusiasts, it is using the business-level strategy called
focus
franchising
form of licensing in which a company franchiser agrees to provide a franchisee with name, logo, products, advertising
mission statement
formal written declaration of the organization's mission; often includes the firm's philosophy, its primary products and markets, the intended geographic scope, and the nature of the relationship between the firm, its stakeholders, and scoiety
mission
fundamental purpose and philosophy
strategic alliance
partnership formed to create competitive advantage on a worldwide basis
operational plans
plans to achieve operational goals
direct investment
purchase of overseas production and marketing facilities; a company may control the facilities outright, or it may be the majority stockholder in the company that controls the facilities
exchange rate
ratio at which one nations currency can be exchanged for another nations currency or for gold
goal
result a firm wishes to achieve
exporting
sale of goods and services to foreign markets
corporate strategy
scope and resources deployment components of strategy for enterprise as a whole
strategic business unit
separate division within a company that has its own mission, goals, strategy, and competitors
plan
set of activities intended to achieve goals, whether for an entire organization, department, or an individual
-fixed tariff
specific amount of money levied on each unit of a product brought into the country -use can inhibit trade and competition
diversification
strategy of acquiring or developing other businesses which must ultimately be justified by its ability to build stockholder wealth
embargo
suspension of trade in a particular product by the government
-Import tariff
tax levied by a nation on goods bought outside its borders and imported into the country
portfolio analysis
technique allowing for managers to visualize their businesses as a set or portfolio using certain common criteria such as growth potential
unrelated diversification
the action of diversifying into any business that is potentially profitable for the organization
Strategic planning differs from general planning in that it focuses on
the external environment and long-term goals.
outsourcing
transfering manufacturing or others functions to countries where labor and supplies are less expensive
self-reference criterion
unconscious referencing to the way things are done in one's own cultures and experiences in making global business deciscions
joint venture
when a company wants to do business in another country finds a local partner to share the costs and operation of the business