MGT 300 CH 8 VOCAB & QUESTIONS

Principal corporate-level strategies include:

- Concentration on a single industry. - Vertical integration. - Diversification. - International expansion.

In large organizations, planning usually takes place at three levels of management. They are _____, ______, and ______.

- Corporate - Functional - Business

A corporate-level strategy is a plan of action that involves choosing in which industries and countries a company should invest its resources to achieve its:

- Goals - Mission

Successful business-level strategies are designed to result in:

- Increased profits. - Increased brand loyalty.

Planning is a(n) ______ process.

- Strategy-making - Goal-making

Fayol stated that effective plans should have four essential qualities, including ______.

- Unity - Continuity - Accuracy - Flexibility

Accuracy means that, in the planning process, managers need to make every attempt to:

- Use all available information. - Collect all available information.

Steps of the planning process

1. Determining an organization's mission and major goals 2. Choosing or formulating strategies to realize the mission and goals 3. Selecting the most effective ways to implement and put these strategies into action

What is the time frame for a long-term plan?

5+ years

What is it called when top management decides the industries and national markets in which their organization plans to compete?

A corporate-level strategy

Collect and use all available information

Accuracy

Henri Fayol believed that, if the situation changes, plans can be ______.

Altered and changed

Entering into a new industry that produces raw materials for the company's products.

Backward vertical integration

One reason that few risks are associated with exporting is that ______.

Companies do not have to build manufacturing companies abroad

- Managers use a ______ strategy to distinguish their products from those of their competitors by focusing on characteristics such as design, quality, and after-sale service. - Distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service is an example of a ______ strategy.

Differentiation

A time horizon is the intended ______ of a plan.

Duration

The corporate-level strategy of related diversification means companies enter an industry that creates a competitive advantage in one or more of an organization's ______.

Existing division or business

True or false: The international expansion strategy requiring the least foreign involvement, foreign investment, and risk comes from joint ventures.

False

With exporting, there are ______ risks involved compared to opening a manufacturing plant abroad.

Few

The model that helps managers focus on the most important competitive forces in the external environment is the ______.

Five forces model

Alter or change plans when necessary

Flexibility

Serves one or a few market segments and strives to differentiate their organization the most from the other competitors serving that segment

Focused differentiation strategy

Serves one or a few market segments and tries to offer the lowest prices serving that reduced segment

Focused low-cost strategy

Entering into a new industry that uses, distributes, and sells company products

Forward vertical integration

Michael Porter suggests that when managers choose a business-level strategy, their organization should ______ in a particular market.

Gain a competitive advantage in a particular market of industry

A company engaged in ______ sells products at home that are made abroad.

Importing

When companies utilize a global strategy for international expansion, they will undertake _______ of their products to suit the specific needs of customers in different countries.

Little, if any, customization

The business-level plan details both ______.

Long-term divisional goals and division-level strategy

When managers make the decision to price their products below that of their competitors, they are using a ______ strategy.

Low-cost

- A broad declaration of an organization's overriding purpose, what it is seeking to achieve from its activities; this statement also identifies what is unique or important about its products to its employees and customers; finally it distinguishes or differentiates the organization in some way from its competitors.

Mission statement

- When a company customizes its products and marketing to fit specific national conditions, it is following a ______ strategy. - A ( ) strategy allows a company to customize product offerings and marketing approaches to local conditions, whereby managers are able to gain market share or charge higher prices for their products.

Multidomestic

The process of ( ) is used to identify and select appropriate goals and courses of action for an organization.

Planning

______ argued that the five forces are the major threats that an organization will encounter.

Porter

If managers decide to pursue a global strategy for selling products in the national market, how does that impact how products are produced and marketed?

Products will be standardized and there will be one basic marketing approach.

One characteristic of a joint venture is that risk is ______

Reduced

When an organization enters into a strategic alliance with a foreign company, they share ______.

Risks and rewards

Strengths, weaknesses, opportunities, and threats are components of a ______.

SWOT analysis

Jeremy forecasts what might happen if his company were to launch their new product into the market according to different schedules, prices, and features. He's thinking of making decisions to customize based on what he knows of his competitors' schedules and features. Jeremy is engaging in ______ planning.

Scenario

- The generation of multiple forecasts of future conditions followed by an analysis of how to respond effectively to each of those conditions is ______.

Scenario planning

A company chooses a global strategy when it wants to sell ______ products while maintaining the same basic marketing approach in all competitive markets.

Standardized

When the same situation occurs repeatedly, ______ plans are used.

Standing

Henri Fayol emphasized that managers must not be bound to a ______ plan.

Static

- An agreement in which managers share their organization's resources knowledge, and skills with a foreign company is a(n) ______ - One way to overcome the loss of control problems associated with exporting, licensing, and franchising is to expand by means of ______.

Strategic alliance

The advantage to franchising is ______.

That the franchiser does not have to bear the development cost

The advantage of licensing associated with opening up in a foreign country is that ______.

The licenser does not have to bear the development costs

The SWOT analysis components that are used to anticipate potential problems or opportunities for business growth outside an organization are ______, and for internal problems or assets of an organization are ______.

Threats and opportunities; weaknesses and strengths

In large organizations, planning usually takes place at ______ level(s) of management.

Three

When managers plan, they must forecast what may happen in the future to ______.

To decide what to do in the present

From a managerial perspective, what is the purpose of formulating a set of corporate strategies?

To help them achieve the corporation's mission

Managers of any organization that needs to sell its products abroad should ask ______.

To what extent should the organization customize its products to different national conditions?

In general, corporate-level planning and strategy are the primary responsibility of ______.

Top managers

True or false: The low-cost strategy drives down an organization's costs below those of its competitors. This strategy is aimed at serving a broad market.

True

When organizations move into a new industry that is not related to their current businesses, this is ______ diversification

Unrelated

The corporate-level strategy that is used when a company enters an industry that either supplies products to the company or purchases the company's products is ______.

Vertical integration

There are two important goals of a mission statement; they are to describe their products for employees by pointing out ______ and ______.

What is unique or important about its products; what differentiate its products from its competitors

- A manager of a medical durable equipment company decides to establish an operation in a foreign country independent of any local direct involvement. This manager is creating a ______. - Production operations established in a foreign country independent of any local direct involvement is a ______.

Wholly owned foreign subsidiary

Because they believe they can purchase a failing company and use their skills to turn it around so it performs better and adds value

Why might managers decide to pursue unrelated diversification?

The risks associated with licensing is that the company granting the license:

- Has to give access to its technological know-how. - Risks losing control of its secrets.

The term hypercompetition applies to industries that are characterized by ______ competition

- Ongoing - Intense - Permanent

Types of standing plans include:

- Rules. - Policies. - Standard operating procedures (SOPs).

The five forces model

- The level of rivalry among organizations in an industry - The potential for entry into an industry - The power of large suppliers - The power of large customers - The threat of substitute products.

- If a brewery decides to expand by buying the farms that produce the ingredients, this is an example of ______ integration. - Expanding a company's operations into an industry that produces inputs for its products is ______ vertical integration

Backward vertical

- Top managers at an expanding digital provider outlines a method for how adding popular programming with top stars to their streaming video programming will help them outperform their competitors. These managers are working on a(n) ( ) -level strategy. - A plan that indicates how a division intends to compete against its rivals in an industry is a ______-level strategy. - The divisional managers' decisions pertaining to the goals and strategy of their unit are contained in a ( ) -level plan. - A plan to gain a competitive advantage in a particular market or industry is a ______ strategy.

Business (level)

- When a company reinvests its profits to strengthen its competitive position in its current industry, it is utilizing a(n) ______ strategy - People would come from all over the greater city lines for Sami's Sushi until the owner of Sami's decided to expand to some of the well-populated suburbs. This decision was a corporate-level strategy referred to as ______.

Concentration on a single industry

- Build and refine previous plans on an ongoing basis - Managers build and refine their previous plans at the corporate, business and functional levels to put together a broad framework. This ongoing planning process is referred to as ______.

Continuity

The downside of using the franchise strategy is that franchisers risk losing ______ over the way the franchisee operates the franchise.

Control

- The type of plan that defines an organization's mission and goals, overall strategy, and structure is the ______. - A plan that indicates in which industries and national markets an organization intends to compete is a ______ strategy.

Corporate-level plan (strategy)

An advantage of a multidomestic strategy is ______

Customization of product offerings and marketing approaches

Companies that try to specialize in one segment of the market and undercut the prices of the other sellers in the market are using a ______ strategy.

Focused low-cost

- When a corporation sells the rights to use its name and expertise to a foreign company in exchange for a lump sum of money, it is called ( ). - Selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits is called ______.

Franchising

Selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits is called ______.

Franchising

Managers need to decide to what extent the organization should customize its products for different national conditions. The product can be standardized in all markets in which the organization competes; this is called a ______ strategy. If the company customizes its products and marketing tactics to different national conditions, it is called a ______ strategy.

Global; multidomestic

The five forces model identifies the factors as major threats because they affect ______.

How much profit competitors within the same industry can expect to earn

With the continuing threat of Internet hacking, cybersecurity has become an enormous industry, with companies vying to convince the large, global companies that they can provide the best strategies for protection. This industry is characterized by permanent ongoing intense rivalry that has resulted from advanced technology. These conditions indicate ( ) in this industry.

Hypercompetition

- When two or more companies form a strategic alliance to to jointly establish and share the ownership of a new business, it is a(n) ______. - A fine food chain based in the U.S. reached out to a world-renowned chef and a popular French winery, and suggested that they go into business together in the U.S., France, and Belgium. What kind of agreement was the food chain suggesting?

Joint venture

Allowing a foreign organization to take charge of manufacturing and distributing a product in its country or world region in return for a negotiated fee is ______.

Licensing

The overriding purpose of an organization is specified by its ______.

Mission

Henri Fayol defined the quality of continuity during planning to mean that the company should focus on ______.

Refining previous plans and continually modifying plans at all levels so they fit together

Henri Fayol defined the quality of continuity during planning to mean that the company should focus on ______.

Refining previous plans and continually modifying plans at all levels so they fit together.

When a company decides to enter a new industry to gain a competitive advantage within one or more of the company's existing divisions, this is called ______.

Related diversification

- When the CEO and other top managers communicate their vision for the company to the rest of the managerial staff, this is referred to as ______. - The CEO and top managers use ______ to communicate to their managers and other employees a compelling vision of what they want the organization to accomplish.

Strategic leadership

- A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals is a(n) ______. - To achieve organizational goals, managers use ______ to launch courses of action that will move them towards their goals.

Strategy

The development of a set of corporate, business, and functional strategies that allow an organization to accomplish its mission and achieve its goals is known as ______.

Strategy formulation

An advantage of a strategic alliance for a U.S.company over a license or franchise is ______.

The company has more control over what is being produced and sold

The advantage of a strategic alliance is that ______.

The level of the company's involvement abroad increases

True or false: Divisional managers create business-level plans to establish goals for their divisions.

True

In order to ensure that all information is accurate in the planning process, managers must recognize that ______.

Uncertainty exists

- Have only one guiding plan - The belief that, at any time, only one central, guiding plan is put into operation to achieve an organizational goal is ______. - At any one time only one central, guiding plan is put into operation to achieve an organizational goal. This is known as

Unity

At any one time only one central, guiding plan is put into operation to achieve an organizational goal. This is known as ( )

Unity