iBUS CH 13
Which three sales and marketing functions can help a firm create value? Consumer assessments Advertising Accounting audits Mission statements Brand positioning
Consumer assessments Brand positioning Advertising
Primary activities of the value chain can be categorized into four functions; identify these four functions. Customer service R&D Human resources Leadership Tax planning Production Marketing & sales
Customer service R&D Production Marketing & sales
What is the term for assigning different stages of the value chain throughout the world where perceived value is maximized? Logistics net World access Global system Global web
Global web
The personnel staff was praised for hiring the highly-skilled management team which led the company to great success. Which company function added value in this instance? Human resources Logistics Marketing Research and development
Human resources
Identify the components of a business that make up its operations. (Check all that apply.) Human resources Information systems Sales forecasts Marketing Audits
Human resources Information systems Marketing
McDonald's local franchises in France have begun to offer more elegant seating areas and an upscale menu. This was done in response to slow growth rates in the area. Impressed with the increased sales at these stores, McDonald's executives are considering making these changes elsewhere. In this instance, what aspect of creating value is demonstrated? Logistical functions Leveraging subsidiary skills Marketing analysis Research and development models
Leveraging subsidiary skills
______ refer to cost savings that are the result of learning by performing a task. Economies of scale Production efficiencies Experience curve Learning effects
Learning effects
Location economies can create value for a firm in which two ways? Lower the cost of value creation and achieve a low-cost position Increase the cost of creating value Enable a firm to differentiate its product Allow a firm to vary its accounting practices
Lower the cost of value creation and achieve a low-cost position Enable a firm to differentiate its product
True or false: Following a transnational strategy can pit two conflicting goals against each other - differentiating products versus cost reductions.
true
Consumers throughout the world have the same use for sugar -- it is used as a sweetener in every country. Sugar is an example of a(n) Blank______ need. universal traditional secondary liberal
universal
A firm measures Blank______ by the difference between its costs of production and the quality a customer associates with a product. depreciation strategy margins value
value
The marketing department survey showed that many customers preferred a smaller container for the company's line of iced coffee products. The R&D department immediately began work on a new container. These departments worked together to increase the Blank______ of the product. cost production value placement
value
True or False: A global standardization strategy should be used when there are pressures for providing customized products for local demands.
false
True or false: Based on the basic strategy paradigm, in order to maximize its profitability, a firm can invest in any of the positions found on the efficiency frontier.
false
When a firm adopts a low-cost strategy on a global scale that comes from economies of scale, learning effects, and location economies it is using a Blank______ strategy. global standardization localization home-country international
global standardization
Generally, if customers place a high value on a product, a business can place a ___________ (lower or higher?) price on that product.
higher
If a business wants to achieve economies of scale, it would be beneficial for it to Blank______ production volume. stop outsource increase decrease
increase
The focus of a differentiation strategy is to ______. maintain profits from a foreign investment lower production costs increase the attractiveness of a product establish initial sales
increase the attractiveness of a product
The different value creation activities found in a firm are called ______. operations production management service
operations
Universal needs exist with which two of these product groups? Choose all that apply. high fashion clothing personal computers and hand-held calculators bulk chemicals, petroleum and steel sports apparel for local teams
personal computers and hand-held calculators bulk chemicals, petroleum and steel
What are the two types of value creation activities found within a company's operations? (Check all that apply.) Primary Foreign Support Legal
primary support
If Trevor wants his company to create more value, he should look for ways to make a product that is higher in ______ (quality/price).
quality
The efficiency frontier would be used by a company to determine Blank______. strategic positioning labor relations production sites financial status
strategic positioning
A company's Blank______ is defined as the actions that managers take to attain the goals of the company. Multiple choice question. market growth procedure strategy
strategy
Mia's goal for the company this year is to sell its product line internationally. She feels this will increase profits within the next three years by as much as 30%. Mia is developing a ______ for the company. Multiple choice question. mission statement sales forecast strategy budget
strategy
What two factors would lead a company to use a global standardization strategy? strong pressure to reduce costs minimal pressure to reduce costs low demand for local responsiveness high demand for local responsiveness
strong pressure to reduce costs low demand for local responsiveness
Garrett knows that without the efficiency of the tracking software system, none of his products could get to the customer on time. This software system is an example of a Blank______ activity. primary support
support
What are three sources a company can use to achieve economies of scale? Bargain purchasing costs Establish a tax base Serve global markets Spread fixed costs over a large volume
Serve global markets Spread fixed costs over a large volume Bargain purchasing costs
What are three ways a company can increase its profitability and rate of profit growth by expanding internationally? Sell products to the international market Source activities where they are performed most efficiently Realize greater cost economies Decrease political risk by exporting Decrease foreign exchange risk
Source activities where they are performed most efficiently Sell products to the international market Realize greater cost economies
A global standardization strategy aims to increase profits by implementing Blank______. research and development more advertising cost reductions customized products
cost reductions
When the logistics function is carried out efficiently, it can create more value because it lowers Blank______. profits sales development costs
costs
Meghan's job involves responding to emails from clients who have product questions and complaints. Which primary activity function is Meghan involved in? R&D production customer service marketing and sales
customer service
True or false: A company would typically experience a decrease in profit growth if it should decide to disperse value creation activities to different locations as a way to perform those activities more efficiently.
false
True or false: Location economies refer to the distribution point of a company's products.
false
When competing globally firms have Blank______ major strategic stances that they can adopt. nine four two six
four
What are the four main strategic postures that firms can use when competing globally? domestic concentrated strategy global standardization strategy localization strategy transamerica strategy international strategy transnational strategy
global standardization strategy localization strategy international strategy transnational strategy
Jeannie's company resourced a new production facility and was able to bring down the cost of goods it produced. As a result, it could lower the price to consumers. Within six months, her company saw a steady increase in profits or a profit ______. strategy growth frontier response
growth
Some believe that local customization is declining in importance. What two reasons are cited as the reason for this decline? higher value placed on price than product improved transportation methods the advent of communication technology increasing interest in world travel
improved transportation methods the advent of communication technology
Sasha receives a bi-weekly inventory report that shows her how many catalogs are in the warehouse. The report is generated automatically by the system that tracks all warehouse items. Sasha's report is a by-product of a(n) Blank______ system. human resource information logistics
information
The strategy where a company takes a product produced for the domestic market and then makes very minor changes to customize the product for global markets is the Blank______ strategy. transnational global standardization international localization
international
Lenovo's ThinkPad laptop computer illustrates the concept of the global web because ______. it meets the needs of any consumer regardless of where they live it is the first product to be developed by one company and then sold by another company it is designed in the US, components are made in a variety of countries, the unit is manufactured in China sales of the product are only done via the Internet
it is designed in the US, components are made in a variety of countries, the unit is manufactured in China
When Xerox first introduced the photocopier, it was able to implement an international strategy because Blank______. it offered the product at the lowest price it did not have any competition it made a desktop model photocopiers were needed by every company
it offered the product at the lowest price
Charlotte told the new employees on the clothing assembly line that their ability to produce a final product would increase as they learned the most efficient way to sew the dresses. Charlotte is describing a Blank______ effect. parity learning logistics resource
learning
What are three areas of a company's strategy that can be impacted by pressures for local responsiveness? Choose all that apply. currency exchange learning effects location economies economies of scale capital markets
learning effects location economies economies of scale
Marta's company wants to sell coffee products in Mexico but in order to do so they need to adjust their products to reflect the desires of customers in Mexico. In other words, her company feels the pressure of core competencies economies of scale local responsiveness tragedy of the commons
local responsiveness
Firms face competitive pressures when they venture into the global marketplace. Companies face pressure for cost reductions and to be Blank______. free from subsidiaries locally responsive a greenfield venture politically connected
locally responsive
Kenneth knows that the only way to trim the costs of production as management has requested is to have components built in China and have the final product assembled in Mexico. Kenneth is contemplating Blank______ economies. location distribution parity site
location
Trina's company has moved all sewing and piece-work capabilities to a plant in Thailand in order to reduce costs. Her company is taking advantage of a(n) Blank______ economy. location technical service political
location
Jeremy's boss told him that if production costs were brought down by 15% by the end of the year, they would be able to bring costs down for consumers. Which type of strategy is Jeremy's boss suggesting? differentiation niche focused low-cost
low-cost
The production activity of a firm can create value by working to design a better product lower costs leverage buy-outs diminish quality
lower costs
Which component of a business must increase in order for a company to experience a profit growth? gross income costs of goods sold overhead expenses net profits
net profits
Jason is a member of the company's product development team. He is involved with a(n) ______ activity. independent secondary support primary
primary
What are two types of primary activities found in many businesses? human resources production logistics customer service
production customer service also - marketing and sales and research and development
The rate of return that a business makes on its invested capital is known as its ______, Multiple choice question. net sales viability GDP profitability
profitability
After many months of analysis and study, the insurance company introduced a new disability product that would allow consumers of all income brackets an affordable insurance choice. Which primary activity did this company rely on to create this product? research and development customer service production activity marketing
research and development
After many months of analysis and study, the insurance company introduced a new disability product that would allow consumers of all income brackets an affordable insurance choice. Which primary activity did this company rely on to create this product? research and development marketing production activity customer service
research and development
The design of products and production processes is included in the primary activity known as Blank______. marketing and sales logistics customer service research and development
research and development
A business should follow the Blank______ strategy when it experiences pressures for cost reduction AND local responsiveness. localization global standardization transnational
transnational
While it might be less expensive for a US company to assemble automobile parts in New Zealand, these cost savings would be offset by Blank______ costs and make it impractical to move operations there. service quality transportation infrastructure
transportation
Which country would be most likely to form a regional convergence with the United States? France China Great Britain Canada
Canada
The most obvious example of a region where there are institutional forces that are pushing toward convergence is the Blank______. EU UN NATO IMF
EU
Daniel's company adopted an international strategy when it introduced the single-cup coffeemaker. However, just nine months later, his company regretted the decision because four other companies came up with a similar product and began selling it at a lower cost and with additional features. What is the main reason Daniel's company's international strategy failed? competitors pricing regulations product design
competitors
Increasing the volume produced by a single plant can help a company move Blank______ on the experience curve. horizontally upward downward
downward
Choose three factors that pressure a firm to respond locally when they enter the global marketplace. Accepted business practices Common global business practices Differences in consumer tastes Homogeneous consumer preferences Host-government demands
Accepted business practices Differences in consumer tastes Host-government demands
Companies typically face two types of competitive pressures when entering global markets. What are these two pressures? Use foreign currency Be locally responsive Reduce costs Use local employees
Be locally responsive Reduce costs
Which three of these employees are involved with a primary activity at their company? Carol is a customer service representative. Norris makes sure there are funds available to purchase components John is responsible for all marketing activities. Ginny works in human resources and is responsible for all insurance questions Michael assembles automobiles at the plant.
Carol is a customer service representative. John is responsible for all marketing activities. Michael assembles automobiles at the plant.
What is the ultimate reason international strategies eventually fail? Marketing Government Price Competition
Competition
A global standardization strategy aims to increase profits by implementing Blank______. research and development customized products cost reductions more advertising
cost reductions
A transnational strategy assists a business in what three ways? (check all that apply) differentiating products lowering costs protecting local technology & skills transferring skills between different subsidiaries standardizing products
differentiating products lowering costs transferring skills between different subsidiaries
If a firm realizes reductions in per unit cost achieved through large production runs, it is experiencing Blank______. a greenfield venture economies of scale purchasing power parity tragedy of the commons
economies of scale
Maria thought the company could bring down the cost per item of the shoes if they increased the production run to 5,000 units. Maria is basing her thought on Blank______. economies of scale elasticity of demand logistics purchasing power parity
economies of scale
The two components of the experience curve are Blank______. Choose those that apple. economies of scale distributive effects economies of scope learning effects
economies of scale learning effects
All of the different positions a firm can adopt in order to add value and low cost to a product are incorporated within a(n) Blank______. purchasing power parity return on investment benchmark test efficiency frontier
efficiency frontier
A product's production costs tend to decline over time. This is referred to as the Blank______ curve. experience demand productivity experience curve output
experience curve
Which two strategies become less viable as competition increases for a company? localization global standardization international transnational
localization international
A company can measure its profitability by determining the rate of return on invested capital. To do this, the firm would divide ______ by total invested capital. net profits GNP sales forecasts GDP
net profits
Companies which produce wireless headsets must take into consideration that standards in Europe are based on GSM (Global System for Mobile Communications) while in the US standards are based on CDMA (Code Division Multiple Access). These standards demonstrate how Blank______ can be a source for local responsiveness. technology distribution channels customer preference logistics
technology
Bryan's company wanted to gain a greater market share on its bicycle products so it built in greater functionality to the bikes and created an after-service customer call center. Which aspect of value creation is Bryan's company concerned with? units costs value revenue
value
What name is given to the electronic systems that manage inventory, price products, track sales, and handle customer inquiries? Marketing Tracking Information Analytical
Information
Lillian's company makes chocolate candy bars. They make one type of candy for the US market and make another type of candy that isn't quite as sweet for the European market because consumers there prefer that. What type of strategy does Lillian's company use to sell its products? Global standardization Localization Transnational International
Localization
Lillian's company makes chocolate candy bars. They make one type of candy for the US market and make another type of candy that isn't quite as sweet for the European market because consumers there prefer that. What type of strategy does Lillian's company use to sell its products? Localization Global standardization International Transnationalb
Localization
How can logistics help create more value for a firm? Logistics can be used to estimate subsidiary costs and allows a firm to minimize container costs. Logistics allows the transmission of physical materials to be done more efficiently and therefore lowers costs. Logistics creates a stronger brand image of the company.
Logistics allows the transmission of physical materials to be done more efficiently and therefore lowers costs.
What are the two ways a firm can create more value for its products? Decrease the firms infrastructure Lower production costs Make product more attractive to consumer Increase production levels
Lower production costs Make product more attractive to consumer
What are four aspects of a company's infrastructure? (check all that apply) Investments Organization structure Control systems Culture Top management Customers
Organization structure Culture Control systems Top management
According to the central tenet of the basic strategy paradigm, in order to maximize its profitability a firm must do what three things? Foster international relationships over domestic relationships Provide executive power to create immediate position decisions Pick a position on the efficiency frontier where there is enough demand to support the choice Make sure the firm has the right organization structure in place to execute its strategy Configure internal operations so they support the position selected on the efficiency frontier
Pick a position on the efficiency frontier where there is enough demand to support the choice Configure internal operations so they support the position selected on the efficiency frontier Make sure the firm has the right organization structure in place to execute its strategy
McDonald's is increasingly finding that its foreign franchisees are a source of valuable new ideas. Which aspect of creating value is McDonald's taking advantage of in this instance? Research and development Marketing Logistics Subsidiary skills
Subsidiary skills
Which two situations make a localization strategy the best choice? (check all that apply) When there is potential for economies of scale When cost pressures are not too intense When it is most profitable to offer a standardized product When there are differences across nations in tastes and preferences
When cost pressures are not too intense When there are differences across nations in tastes and preferences
Local content rules dictate that Blank______. a product should be manufactured in the location where it creates the least environmental damage a certain percentage of a product should be manufactured locally a product should be manufactured in the location providing the greatest cost savings the entirety of a product should be manufactured locally
a certain percentage of a product should be manufactured locally
As Toyota has demonstrated, it is possible to create a perceived value in a product in such a way that Blank______. global expansion becomes impossible a premium price can be charged other car manufacturers can imitate it
a premium price can be charged
As a way to increase sales, Jenni's company decided to restyle their line of winter boots to make them more attractive to consumers and make them more interested in buying the boots. This is an example of a(n) ______ strategy. differentiation PPP arbitration low-cost
differentiation
The distinguishing feature of a firm following an international strategy is that they Blank______. do not serve a universal need do not have significant competition feel pressured to customize their products feel pressured to reduce their cost structure
do not have significant competition
A business should follow an international strategy when it finds itself in which two situations? when it cannot achieve economies of scale does not face cost pressures does not face pressures to customize a product based on local preference when it cannot participate in foreign capital markets
does not face cost pressures does not face pressures to customize a product based on local preference
Core competencies are typically expressed in ______ that other firms are unable to duplicate. infrastructures partnerships financial structuring skills within a firm
skills within a firm
Production and marketing responsibilities are typically delegated to Blank______ when customer preferences create a strong pressure for local responsiveness. the firm's foreign subsidiary an outside party the firm's home office
the firm's foreign subsidiary