Business strategy Exam 2
Gallo Wines is seeking international market entry. one if its top criteria for choosing a country to enter is a pro-business government policy. John would advise him to enter
Australia, which recently introduced a permanent employer- sponsored visa program for skilled manpower
Companies operating in an international marketplace have to respond to all of the following, EXCEPT: A. whether to customize their offerings in each different country market to match the tastes and preferences of local buyers. B. whether to pursue a strategy of offering a mostly standardized product worldwide. C. how much to customize their offerings in each different country market to match the tastes and preferences of local buyers. D. the tensions between market pressures to localize a company's product offerings country by country and the competitive pressures to lower costs through greater product customization. E. whether to buy a struggling competitor at a bargain price or pay a premium to gain entry to the local market.
B. whether to pursue a strategy of offering a mostly standardized product worldwide.
A competitive strategy to be the low-cost provider in an industry works well when
Industry newcomers use introductory low prices to attract buyers and build a customer base.
Hampton by Hilton's focuses on low- cost strategy in the lodging industry was diffrent from a low- cost leadership strategy in that the company
Serves buyers in a target market niche at a lower cost and lower price than rival competitors
While there are many routes to competitive advantage, the two biggest factors that distinguish one competitive strategy from another are
Whether a company's target market is broad or narrow and weather the company is pursing a low- cost or differentiation strategy
A boutique hotel chain provides upscale rooms and superior customer service at value prices. What strategy is the hotelier using to gain competitive advantage
a best-cost provider strategy
What are value drivers?
a set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect
the impact of fluctuating exchange rates on companies competing in foreign markets
always benefit domestic companies facing competitive pressure from lower-cost imports when their governments currency grows weaker
you are the general manager of a regional HR staffing company. What strategic consideration would be least likely to influence your decision to diversify your firm into new related or unrelated business services?
analyzing and setting on the appropriate value chain for each business the company has entered
economies of scale
are cost reductions that flows from operating in multiple related businesses
the advantages of manufacturing goods in a particular country and exporting them to foreign markets
are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.
The three tests for judging whether a particular diversification move can create value for shareholders are
attractiveness test, the cost of entry test, and the better off test
A company's competitive strategy should
be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies.
The advantages of using a licensing strategy to participate in foreign markets include
being able to leverage the company's technical know-how, appealing brand, or patents without committing their resources or capabilities to foreign markets
With a strategy of unrelated diversification, an acquisition is deemed to have potential if it
can pass the industry attractiveness test and the cost of entry test, and if it has good prospect for profit growth.
approaches to enhancing differentiation through changes in the value chain include
coordinating with channel allies to enhance customer value
It becomes particularly urgent for a company to consider diversification when there are
diminishing market opportunities and stagnating sales in its principal business.
Using domestic plants as a production base for exporting goods to selected foreign country markets
excellent initial strategy to test the international waters and learn if attractive markets positions can be established in foreign markets
Strategic fit between two or more businesses exists when one or more activities comprising their respective value chains present opportunities
for cross- business collaboration to build valuable new resources strengths and competitive capabilities
electronic Arts, like most companies that operate internationally, endeavors to employ as global a strategy as customer needs and makes conditions permit via a
globalization
the world economy is globalizing at an accelerated pace because
growth-minded companies are racing to build stronger competitive positions in the markets of more countries
For a diversified company to be a strong performer
its principal business must be in industries with a good outlook for growth and above-average profitability.
A major advantage of related diversification is that it
offers ways for a firm to realize 1 + 1= 3 benefits because the value chain of the different business present competitively valuable cross- business relationships
in order to be successful with low-cost leadership strategy, company mangers have to
perform value chain activities more cost-effective than rivals and be productive in revamping the firm's overall value chain to eliminate "nonessential' cost- producing activities.
Whatever strategic approach is adopted by a company to deliver value, it nearly always requires
performing value chain activities differently than rivals
The one factor that company executives need not worry about when their company is managing many diverse, unrelated firms is to
pick business unit leads having the required combination of managerial skills and know-how to motivate people
The difference between political risks and economic risks is that
political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system,and its economic and regulatory policies
the objective of a competitive strategy is to
provide buyers superior value relative to the offerings of rival sellers in order to attain a competitive advantage.
What is the best way to achieve the efficiency potential of a global strategy?
resources and best practices
A company that succeeds in differentiating its product offering from those of its rivals should
seek out sources of value that are time consuming or harden some for rivals to match
should a company pursue an unrelated diversification strategy, the types of companies that particularly attractive acquisition targets would be
struggling companies with good turnaround potential undervalued companies that can be acquired at a barging price, and companies that have bright growth prospects but are short on investment capital
Prada, Gucci, and Burberry are among the high-fashion design companies that are attempting to be successful with a broad diffraction strategy via
studying buyer needs and behavior to learn what buyers consider important what they think has value, and what they are willing to pay
Cross-business strategic fits in a diversified enterprise is not normally achievable when
the value chain activities of unrelated business possesses economies of scope and good financial fit.
the essential requirement for different businesses to be 'related' is that
their value chain exhibits competitively valuable cross- business commodities
why do companies decide to enter a foreign market
to capture economies of scale in product development, manufacturing, or marketing
A major disadvantage of strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms is
to create permanent arrangements between the domestic and foreign firms
the big issue an acquisition- minded firm must consider is whether
to pay a premium price for a successful local company or to buy a struggling firm at a discounted price
One of the biggest strategic challenges to competing in the international area includes
whether to offer a standardize product worldwide or a customized product offering in each different country market
