Strategic Development
Which of the following is a benefit provided by direct ownership?
It provides the ability to better know the competitive environment
What is market development strategy?
It refers to a concentration strategy where a firm tries to sell its existing products within new markets.
What best describes regulated competition?
It refers to competition that occurs in oligopolistic industries where the direct effect of extensive government intervention creates a global competitive climate.
What core competency should be developed by an organization with a global innovation strategy?
It should develop the ability to leverage new ideas all around the world.
How should a company mobilize to reap the benefits of global innovation?
It should integrate knowledge from different sources into a virtual melting pot from which new products or technologies can emerge.
What does Yoffie's proposition five suggest?
It suggests that in industries where firms make long-term commitments, corporate adjustments and patterns of trade tend to be "sticky."
Which point best portrays economic logic of the strategy diamond?
It talks about how money is made by a firm.
Name the industry globalization drivers that define how customer behavior distribution patterns evolve.
Market drivers
Which of the following statements is true of a country's institutional contexts?
A country's political system affects its product, labor, and capital markets
Name the term that refers to a firm that uses the benefits from prior market development by a pioneering firm to achieve profitability more quickly
A fast follower
List the dimensions along which the Boston Consulting Group matrix categorizes businesses as high or low.
A firm's market share in each industry and the growth rate of each industry
What benefits do direct ownership of facilities in a target country provide?
A high degree of control in operations
Mira is the vice president of a consulting firm. Due to the shortage of employees at her disposal, she decided to outsource some of the work to Milton Inc. What should she provide to the managers of Milton so that they have complete clarity on the service required of them?
A request for proposal
What best describes stuck in the middle in the context of generic strategies?
A situation in which a business-level strategy does not offer features that are unique enough to convince customers to buy its offerings and its prices are too high to compete effectively based on price
What is global market segment?
A worldwide consumer market segment that has relatively homogenous needs and preferences.
Which of the following refers to the marketing and direct sale of domestically produced goods in another country?
Exporting
Select the government globalization driver.
Favorable trade policies
According to Porter, the likelihood of firms making profits in a given industry depends on how many factors?
Five
According to Porter, how many factors does the likelihood of firms making profits in a given industry depend on?
Five Explanation: Porter's model attempts to analyze the attractiveness of an industry by considering five forces within a market. The five factors are (1) barriers to entry and new entry threats, (2) buyer power, (3) supplier power, (4) threat from substitutes, and (5) rivalry.
Which statement characterizes bottom-up estimating?
It is the most accurate and time-consuming estimating method. EXPLANATION The most accurate and time-consuming estimating method is bottom-up estimating. It involves identifying the cost of each item in each activity of the schedule, including labor and materials.
What challenges an organization when its goal is global innovation?
It has to access a diverse set of sources of knowledge.
What best describes a request for proposal?
It helps to determine the costs of products or services provided by vendors.
How does extravagant engineering assist an entrepreneur?
It helps to focus on Midas versions of products.
How does arenas of the strategic diamond address the hallmarks of strategizing?
It informs where a firm will be active to its managers and employees.
Pick the statement that best describes product development strategy.
It involves creating new products to serve existing markets.
Identify the statement that is true of the first mantra of the entrepreneur.
It involves differentiating through innovation.
If an activity schedule is viewed as a hierarchy, what statement is true of bottom-up estimating?
It involves identifying the price of each item at the lowest level and then summing them to determine the cost of higher levels.
In the context of global innovation, what best describes assessing?
It involves incorporating new knowledge into and optimizing an existing innovation network.
What best represents the strategy diamond?
It is a tool that will help people understand how clearly and completely they have crafted a strategy.
Choose the statement that is true of pioneer advantage
It is one of the most widely established theories of business.
Pick the point that best represents the intended strategy.
It is the impetus for initial attempts at strategy implementation.
In the context of global innovation, how can an organization accomplish mobilizing?
It must bring the various pieces of knowledge that are scattered around the world together and provide a suitable organizational form for innovation efforts to flourish. EXPLANATION Mobilizing is integrating knowledge from different sources into a virtual melting pot from which new products or technologies can emerge.
How does a firm stuck in the middle function in a business environment?
It offers features that are not unique enough.
What is the advantage of being a first mover?
It provides a competitive advantage that is structural and sustainable
What is the advantage of being a first mover?
It provides a competitive advantage that is structural and sustainable.
How can being a first mover benefit a firm?
It provides a competitive advantage that is structural.
What is a benefit provided by being a first mover?
It provides a unique advantage that later competitors cannot overcome
Value Cosmetics Inc. increased the sales of its existing products among existing customers through extensive advertising and product discounts. Name the concentration strategy used by Value Cosmetics.
Market penetration
What can provide true indications of a markets potential size, growth rate, and key success factors?
Marketing intelligence gathered locally
Who noted that strategy is as much about executives deciding what a firm is not going to do as it is about deciding what the firm is going to do?
Michael Porter
Which of the following is one of the most well-known frameworks used to analyze the attractiveness of industries?
Michael Porter's five forces
Which of the following is most likely to threaten the market share of existing competitors, according to Michael Porter?
New entrants
What is one reason that new entrants pose a threat to the market share of existing competitors?
New entrants bring additional production capacity.
What are the five forces of competition identified by Michael Porter?
New entrants, buyers, suppliers, substitutes, and rivalry
What is the difference between organic and acquisitive growth?
Organic growth excludes any growth from takeovers, acquisitions, or mergers, whereas acquisitive growth refers precisely to any growth from takeovers, acquisitions, or mergers.
Name the global competitive climate that is created by extensive government intervention in oligopolistic industries.
Regulated competition
According to Yoffie's proposition one, which of the following is a key determinant of global success of fragmented industries?
Relative cost
Select a firm-based characteristic that shapes a company's international brand structure
The importance of corporate identity
Which of the following is true of analogous estimates?
The individuals who make these estimates do so based on their years of experience.
In the context of the five propositions suggested by Yoffie, identify the proposition that addresses the issue of corporate inertia.
The issue of corporate inertia
Select the statement that is true of product-market factors that influence brand architecture
The likelihood of establishing a distinctive global identity increases when companies target a homogenous global market segment
Pick the statement that is NOT true of the product-market factors that influence brand architecture.
The likelihood of establishing distinctive global identity decreases (it does not in increases) when companies target a homogenous global market segment.
What point accurately characterizes staging and pacing?
They enable one to think about timing and next steps.
What must companies do to accomplish mobilizing in relation to global innovation?
They have to add the more complex, contextual knowledge to integrate the different pieces into an overall innovation blueprint.
Choose the statement that best describes global agnostics
They judge a global product by the same criteria they use for local brands
What best characterizes firms stuck in the middle?
They offer features with prices too high to compete effectively based on price.
Why do firms that are stuck in the middle perform poorly?
They perform poorly because they lack a clear market.
Which of the following points portrays parameric estimates?
They use factors like size and location to compute a result with the help of an equation.
Which of the following is one of the forces of Porter's framework for analyzing industries?
Threat from substitutes
Identify the correct objective of the Ten-Ten planning process.
To accommodate speed with perfection EXPLANATION The Ten-Ten approach attempts to reconcile speed with comprehensiveness. This will of course be a very rough first-cut, but it will be the foundation for developing more refined plans. It aims to complete an Organizational and Industry Analysis template and the Business Plan Overview template that identifies the mantra, mission, money, goals, objectives, and tactics in a very brief format.
What is the purpose of product development strategy?
To create new products to serve existing markets
Which of the following is true of buyer power?
To reduce their costs, buyers bargain for higher-quality, greater levels of service, and lower prices.
Which of the following is a correct statement about government globalization drivers?
Today, multinationals do not exclusively rely on governments to negotiate the rules of global competition.
In the context of target market selection, what is the outcome of administrative differences?
increased cost of doing business
Identify the process of matching the schedule of transfers with the schedule of activity payments.
Reconciliation
What differences can slow expansion plans, reduce their ability to attract the right talent, and increase the cost of doing business
Administrative
Which of the following refers to an estimate that is based on other project estimates?
An analogous estimate
Which of the following best describes a parametric estimate?
An estimate that is calculated by multiplying measured factors by cost-per-unit values
James is an experienced manager in a web development company. He had to roughly calculate the costs of developing a website for a new client. Since James had developed a similar website for another client previously for $5,000, he estimated the cost of developing this website to be $5,000. Identify the estimates used by James.
Analogous estimates
Consumers in Eriba tend to avoid buying products offered by global brands because they distrust the quality of those products. In this case, which of the following groups of consumers do the people in Eriba exemplify?
Antiglobals
Compact Inc., a cell phone manufacturer, cultivated a new product by combining knowledge from technical and market knowledge from various countries. What activity was implemented by Compact to reap the benefits of global innovation?
Assessing
In the context of global innovation, what is the process of incorporating new knowledge into and optimizing an existing innovation network called?
Assessing
Pluto Inc., an American company, is developing a special part for effective emission of gases in automobiles. It incorporates relevant knowledge from experts in Germany, Russia, and China. What is Pluto participating in to gain the advantages of global innovation?
Assessing
Nano Inc. is developing a new memory card exclusively for cell phone use. It does research by interacting with technical experts from various nations. What is Nano Inc. engaging in to enjoy the benefits of global innovation?
Assessing To reap the benefits of global innovation, companies must prospect, assess, and mobilize. Assessing involves incorporating new knowledge into and optimizing an existing innovation network. Nano Inc. reaps the benefits of global innovation by assessing.
What is the best way for managers to make a strategy?
Balancing the needs for design with being flexible enough to capitalize on the benefits of emergence
Peter is a project manager at a software company. While initiating a project, he has to accurately determine the cost of each item in each activity of the schedule, including the number of human resources and softwares required. In this case, identify the estimating method that is most likely to benefit Peter.
Bottom-up estimating
Which of the following is one of Michael Porter's five forces of competition?
Buyer power
Identify the term that refers to firms that purchase directly from an industry.
Buyers
How do suppliers exert power over firms competing within an industry?
By reducing the quality of their products
What is a firm that is stuck in the middle deficient of?
Clear market
What should companies do to reap the benefits of global innovation?
Companies must prospect, assess, and mobilize.
In the context of Porter's five-forces model, which of the following statements best defines market microstructure?
Competing for the same customers and thus being influenced by how customers value location and firm capabilities in their decisions
Identify the statement that best describes market microstructure.
Competing for the same customers and thus being influenced by how customers value location and firm capabilities in their decisions EXPLANATION Competing for the same customers and thus being influenced by how customers value location and firm capabilities in their decisions is referred to as the market microstructure.
What is defined as the relative strength of local versus global competitors in a given product market
Competitive Market Structure
Which of the following industry globalization drivers include industry characteristics, such as the extent to which major players have globalized their operations?
Competitive drivers
Which of the following industry globalization drivers include industry characteristics such as the degree to which total industry sales are made up by export or import volume?
Competitive drivers EXPLANATION Competitive drivers include industry characteristics-such as the degree to which total industry sales are made up by export or import volume, the extent to which major players have globalized their operations and created an interdependence between their competitive strategies in different parts of the world-that affects the globalization potential of an industry.
What strategies do firms use to successfully compete only within a single industry?
Concentration strategies
Identify the term that refers to the public facing image that a firm adopts to identify itself favorably to customers and distributors
Corporate identity
Which of the following industry globalization drivers shape the economics of an industry?
Cost globalization drivers EXPLANATION Cost globalization drivers-the opportunity for global scale or scope economics, experience effects, sourcing efficiencies reflecting differentials in costs between countries or regions, and technology advantages-shape the economics of an industry.
Which of the following tend to lead companies to overestimate the appeal of their products or the strength of their brands?
Cultural Differences
Competitive Drivers
Define how competition within an industry affects global markets. Examples include the degree to which total industry sales are made up by export or import volume, the diversity of competitors in terms of their national origin, and the extent to which major players have globalized their operations and created an interdependence between their competitive strategies in different parts of the world.
Markey Drivers
Define how customer behavior distribution patterns evolve. Can be identified based on data from the convergence of global customer needs and procurement, development of global distribution channels, transferability of marketing platforms, and identification of lead countries in which most innovation occurs.
What facet is referred to as traditional in the strategy diamond?
Differentiators
Industry Globalization Drivers
Drivers that underlie industry conditions that determine market globalization potential global strategy potential.
What are the cost globalization drivers?
Economies of scale and scope and experience effects EXPLANATION Cost globalization drivers-the opportunity for global scale or scope economics, experience effects, sourcing efficiencies reflecting differentials in costs between countries or regions, and technology advantages-shape the economics of the industry.
Which of the following is true of the making of strategy?
For most organizations, strategy making combines design and emergence.
Which of the following is used to accomplish the second mantra of the entrepreneur by focusing on Hermes versions of products?
Frugal engineering
Which statement accurately reflects the market dynamics that shape a firms brand structure
Global and regional media provide economical and effective vehicles for advertising international brands
Which of the following groups of consumers rely on the global success of a company as a signal of quality and innovation
Global citizens
Government Drivers
Government drivers, such as the presence or absence of favorable trade policies, technical standards, policies and regulations, and govt operated or subsidized competitors or customers affect all other elements of a global strategy and are therefore important in shaping the global competitive environment in an industry.
Yoffie's proposition four regarding globalization and industry structure suggests that extensive government intervention in global oligopolistic industries can alter the relative balance between firms of different countries. What is true of this proposition?
Government intervention can alter the direction of trade and affect major corporate trade decisions in fragmented industries.
Which of the following does Yoffie's proposition four suggest?
Government intervention can have a pronounced influence in industries with significant economies of scale effects or other market imperfections.
Which of the following refers to pursuing a concentration strategy by acquiring or merging with a rival?
Horizontal integration
Which of the following statements is true of Michael Porter's five forces?
In general, product substitutes present a strong threat to a firm when customers face few, if any, switching costs.
What are competitive drivers?
Industry globalization drivers that include the extent to which major players have globalized their operations
What are cost globalization drivers?
Industry globalization drivers that shape the economics of an industry
What kind of property of a licensor is used by a licensee for a fee in licensing?
Intangible Property
Licensing permits a licensee to use what type of property of a licensor for a fee?
Intangible property
What strategy is the result of a process of negotiation, bargaining, and compromise, involving many individuals and groups within the organization?
Intended strategy
Which of the following distinguishes intended strategy and realized strategy?
Intended strategy is the impetus for initial attempts at strategy implementation, whereas realized strategy is the actual strategy that is implemented.
Distinguish between intended strategy and realized strategy.
Intended strategy is the result of a process of negotiation, bargaining, and compromise, whereas realized strategy is a result of deliberate and emerging factors.
Differentiate intended strategy from realized strategy.
Intended strategy is the strategy conceived of by managers, whereas realized strategy is only partly related to that which was intended. EXPLANATION Intended strategy is the strategy conceived of by managers and the impetus for initial attempts at strategy implementation, whereas realized strategy is the actual strategy that is implemented. It is only partly related to that which was intended.
Choose the statement that best describes international expansion strategy
It affects how a firm's brand structure evolves over time
What is true of a firms' international expansion strategy
It affects how a firm's brand structure evolves over time.
Select the right statement about the Ten-Ten planning process.
It aims to be quick and to the point. EXPLANATION The Ten-Ten approach attempts to reconcile speed with comprehensiveness. This will of course be a very rough first-cut, but it will be the foundation for developing more refined plans. The process is meant to be quick and to the point.
What is the result of estimating the cost of each activity?
It allows to determine how much money is needed for each group of tasks and for the whole project.
What is the drawback of portfolio planning?
It can create motivational problems among employees.
Which of the following is true of a company's administrative heritage?
It defines the template for a company's brand structure
Identify the statement that is true of Michael Porter's model of competition.
It expands the arena for competitive analysis.
Which of the following is NOT a limitation of portfolio planning?
It fails to focus on a firm's existing businesses.
Identify the statement that is true of the second mantra of the entrepreneur.
It focuses on striving to reduce costs
How does economic logic function in the strategy diamond?
It tells how profits will be generated above the firm's cost of capital. EXPLANATION The third facet of the strategy diamond in the traditional view is economic logic, which explains how the firm makes money. It tells how profits will be generated above the firm's cost of capital.
What is the function of arenas in the strategy diamond?
It tells managers where a firm will be active. EXPLANATION Answers to strategy questions about arenas tell managers and employees where the firm will be active.
Pick the statement that represents the Ten-Ten planning process
It works toward reconciling speed with comprehensiveness.
Sally was hired to design the interiors of a company's new outlet. She asked her client to send her information regarding the size and location of the new outlet. She used this data to speculate the cost for designing the interiors of the space. What estimate was used by Sally?
Parametric estimate
Which of the following groups of consumers represent global dreamers?
People in Cadmia are enthusiastic about global brands and readily buy those products
Who among the following best exemplify antiglobals?
People in Cadmia generally avoid global products, as they distrust the quality of those products
Name the term that refers to the unique advantage enjoyed by the first entrant in a new market that later competitors cannot overcome
Pioneer advantage
Name the process that helps executives assess their firms' prospects for success within each of its industries and provides ideas for how to allocate resources across industries.
Portfolio planning
What is a process by which executives make decisions involving their firms' various industries?
Portfolio planning
What is a firm that may become a viable competitor in the future known as?
Potential entrant
Which of the following terms refers to firms that are not currently considered viable competitors in the industry but that may become viable competitors in the future?
Potential entrants
Which of the following is a potential problem of joint ventures?
Presence of cultural clashes
What is one of the potential problems of joint ventures?
Presence of performance ambiguity
GeTrendy is a company that sells modern apparel. Recently, the company introduced a line of clothing accessories to promote sales among its existing customers. In this case, name the concentration strategy used by the company.
Product development
Time Traveler Inc., a gadgets manufacturer, launched a line of gadget accessories and promoted the product among its existing customers in order to increase sales. In this case, name the concentration strategy used by the company.
Product development
Identify the term that refers to finding valuable new pockets of knowledge to spur innovation.
Prospecting
Which of the following strategies refers to the actual strategy that is implemented?
Realized strategy
Identify the statement that is true of Mintzberg's strategies.
Realized strategy is a consequence of deliberate and emerging factors.
What is involved in market development strategy?
Selling existing products within new markets
Which of the following are cost globalization drivers?
Sourcing efficiencies and technology advantages
Which of the following refers to goods or services from outside a given industry that perform similar or the same functions as a product that the industry produces?
Substitute products
According to Porter's model, how do suppliers impact the profits for firms within a sector?
Suppliers determine the terms and conditions on which business is conducted.
Name the best-known approach to portfolio planning.
The Boston Consulting Group matrix
Which of the following is a best-known approach to portfolio planning?
The Boston Consulting Group matrix EXPLANATION The Boston Consulting Group (BCG) matrix is the best-known approach to portfolio planning. Using the matrix requires a firm's businesses to be categorized as high or low along two dimensions: its share of the market and the growth rate of its industry.
Which of the following is true of the request for proposal (RFP)?
The RFP describes the work, service, or product to be provided by a vendor
Which of the following identifies the mantra, mission, money, goals, objectives, and tactics in a very brief format with the help of an Organizational and Industry Analysis template and a Business Plan Overview template?
The Ten-Ten planning process
Who are buyers?
The customers of an industry or firm
What is defined by market drivers?
The degree to which customers procure on a global basis
Identify the statement that is true of Michael Porter's five forces.
The likelihood of new entry is a function of the extent to which barriers to entry exist. EXPLANATION The likelihood of new entry is a function of the extent to which barriers to entry exist. Evidence suggests that companies often find it difficult to identify new competitors.
What is cost aggregation?
The process of subtotaling costs by category or activity
Which point best describes the intended strategy?
The strategy as conceived by the top management team
Identify the tool that will help managers understand how clearly and completely they have crafted a strategy.
The strategy diamond
In the context of global innovation, select the right description of assessing.
The technique of incorporating new knowledge into and optimizing an existing innovation network
Which of the following is true of mergers and acquisitions?
Their financial results often are very disappointing.
Which of the following statements is true of government globalization drivers?
There is a subtle change in the balance of power between national governments and multinational corporations. EXPLANATION As the politics and economics of global competition become more closely intertwined, multinational companies are beginning to pay greater attention to the so-called nonmarket dimensions of their global strategies aimed at shaping the global competitive environment to their advantage. This broadening of the scope of global strategy reflects a subtle but real change in the balance of power between national governments and multinational corporations.
Select the statement that is NOT true of government globalization drivers.
There is no change in the balance of power between national governments and multinational corporations.
What is the drawback of mergers and acquisitions?
They are often very disappointing in terms of financial results.
Hobbes Corp., a cell phone manufacturer, created a cell phone for consumers in Letutium, an emerging market. Subsequently, the firm repackaged the same product to Argonia, a country with more affluent customers. What strategy was applied by Hobbes?
Trickle-up innovation
Core Chemicals, a chemicals-manufacturing company, initially developed a cleansing product for low-income consumers in Rhodia. Later, the company repackaged the product for more affluent markets in Erbia. Which of the following concepts does this scenario exemplify?
Trickle-up innovation EXPLANATION The term "trickle up" refers to a strategy of creating products for consumers in emerging markets and then repackaging them for developed-world customers. Thus, the scenario exemplifies the concept of trickle-up innovation.
Which of the following factors that shape a firm's international brand structure includes ongoing political and economic integration?
Underlying market dynamics
What is the factor that differentiates "must" markets and "nice-to-be-in" markets
Unlike "must" markets, competing within "nice to be in" markets is not critical to global success.
Name a global band attribute that influences consumers' purchase decisions, as stated by John Quelch
What a global brand signals about quality
Daniel wants to become a lawyer. He wants to achieve his goal by applying the strategy diamond to his personal growth and development strategy. In this case, what question will be answered by Daniel's personal vehicles facet?
What do I need to become a lawyer with the help of my friends and professors?
What is true of target market selection?
What is a good strategy for one company might have little chance of succeeding for another
When do firms use product-level brand strategies to gain competitive advantage?
When customer interests are similar worldwide
Which of the following statements is true of substitutes as one of Porter's five forces?
When customers face few, if any, switching costs, product substitutes present a strong threat to an existing firm
When is a firm said to be stuck in the middle?
When it does not offer features that are unique enough to convince customers
When does an acquisition take place?
When one company purchases another company
In which of the following situations are strategic alliances most likely to be favorable?
When partners' strategic goals converge while their competitive goals diverge
When do managers come about with best strategies?
When they balance the needs for design with being flexible enough to capitalize on the benefits of emergence
Phil, an employee, wants to start his own business. He applies the strategy diamond to his personal growth and development objectives. In this case, which of the following questions will be answered by Phil's arenas?
Where should I start my business?
What point best portrays Yoffie's propositions?
Yoffie's propositions define the degree of global concentration and the extent to which governments intervene.
Which of the following firms can benefit from the market development funded by the pioneer and leapfrog into earlier profitability?
a fast follower
Which of the following is one of the four key factors in selecting global markets?
a markets size and growth rate
What refers to the capability of consumers to move across national boundaries and engage in international travel?
consumer mobility
Cost Globalization drivers
define the fundamental costs associated with the global scale and standardization of an industry.
In the context of target market selection, what is the outcome of cultural differences?
overestimated product appeal
Select the strategies used by firms to gain competitive advantage when customer interests and desired product attributes are similar worldwide, and brand image is an important cue for the consumer
product - level brand strategies
What strategies do firms use to gain competitive advantage when customer interests and desired product attributes are similar worldwide, and brand image is an important cue for the consumer?
product level brand strategies
Of the factors that shape a firm's international brand structure, name those that include a product's cultural associations
product-market factors
Specify the factors that include the competitive market structure in shaping a firms international branch structure
product-market factors
Which of the following is a method by which firms share the resources and risks required to enter international markets?
strategic alliances
Which of the following firm-based characteristics shapes a company's international brand structure?
the administrative heritage of a company
what is described by a firm's globalization history
the details of how the firm has organized its international operations
Of the factors that shape a firm's brand structure, what are included under market dynamics?
the emergence of a global market infrastructure and consumer mobility
Name a product-market factor that shapes a company's international brand structure
the extent to which a firm's product is associated with a particular culture.
What is a firm-based characteristic that shapes a company's international brand structure?
the international expansion strategy of a firm
What is true of the product market factors that influence brand architecture?
the likelihood of establishing a distinctive global identity increases when companies target a homogenous global market segment.
