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If the U.S. dollar appreciates relative to foreign currency, what is likely to be the result for the U.S. company that has company branches abroad?
Profits will decrease, when measured in U.S. dollars.
Informational control systems are concerned with which of the following?
Is the organization doing the right things?
Which of the following is NOT one of the characteristics of a contemporary control system?
It circumvents the need for face-to-face meetings among superiors, subordinates, and peers.
The late Sam Walton, founder of Walmart, used to give pep rallies at local Walmart stores. What purpose did this serve?
It helped reinforce and sustain the Walmart culture.
A domestic corporation considering international expansion for the first time typically will follow which of these paths?
It will implement a low risk-low control strategy such as exporting.
In 2005, Plum Organics entered the market with organic baby food and snack foods for children. It now has over 20 products and is listed at number 63 on the Inc 500 list of fastest growing private companies. It used which new entry strategy in 2005?
adaptive
Which of the following is not a motivation for a company to pursue international expansion?
It wishes to increase foreign market penetration by developing products for the home market.
__________ entail the creation of a third-party legal entity, whereas __________ do not.
Joint ventures; strategic alliances
If a company is considering optimizing the physical location for every activity in the value chain, which of the following is not a possible strategic advantage for that decision?
Life-cycle enhancement
Which one of the following is one of the Theodore Levitt assumptions supporting a pure global strategy?
MNCs can successfully compete globally by aggressively pricing products at the sacrifice of product features.
Which of the following is not a risk normally associated with Bottom of the Pyramid strategies?
New products may be perceived as exploiting the privileged customer with substandard products
Based on statistics reported in the text, which of the following statements is not true?
Ninety percent of the companies financed with venture capital funds fail.
__________ occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house.
Outsourcing
PepsiCo leads Coca-Cola in the Indian market. Why?
PepsiCo formed a joint venture with two Indian companies to introduce its products under their label.
Tom Monahan, a business creativity coach, says that every new idea is merely a spin of an old idea. A company that enters the market by offering a product or service that is somewhat new and sufficiently different in order to create value for customers by capitalizing on current trends is using which new entry strategy?
adaptive
Which of the following is NOT one of the characteristics of an entrepreneurial opportunity?
affordable
Private individuals who provide seed capital to young ventures are known as _____________.
angels
All of the following are examples of strategic actions a firm might take EXCEPT _____________.
change product packaging
Which of the following is NOT one of the three characteristics of entrepreneurial leadership mentioned by the text?
clarifying job responsibilities
Amazon is an example of a company that used the differentiation strategy to enter the market. The differentiation features included _____________.
exceptional customer service
When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market. When high pressures exist to adapt locally, companies should choose a __________ or __________ in order to compete in the global marketplace.
transnational strategy; multidomestic strategy
The form of entry strategy into international operations that offers the lowest level of control for the domestic corporation would be _________.
exporting
Which of the following describes the most typical order of entry into foreign markets?
exporting, licensing, franchising, joint venture, and wholly owned subsidiary
Entrepreneurial firms that pursue a low-cost leadership strategy use all of the following to achieve lower costs except _____________.
extensive investment in order to achieve economies of scale
Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy?
firms in industries that have much value added in research and design or manufacturing
When an industry is mature, a ______________ strategy is considered to be one of the most effective approaches for a new entrant.
focus
Firms following a global strategy strive to offer __________ products and services as well as locate manufacturing, Research and Development, and marketing activities in a limited number of locations.
standardized
Rivalry is intense in nations with conditions of __________ consumer demand, __________ supplier bases, and __________ new entrant potential from related industries.
strong; strong; high
When any two firms have both a high degree of market commonality and highly similar resources, a ______________ threat is present.
stronger competitive
Which of the factors below has not made the software services industry in India extremely competitive on a global scale?
tax and antitrust legislation that protects the dominant players in the industry
Which one of the following is not a limitation of a global strategy?
the ability to locate activities in optimal locations
As in the case of Siebel Systems (now part of Oracle), elements of a global strategy may facilitate the competitive advantage of differentiation by _______.
the creation of a worldwide network to achieve consistent service regardless of location
Vision is an important element of entrepreneurial leadership because _____________.
the entrepreneur has to envision realities that do not yet exist
Which of the following is not a factor that affects how a competitor will respond to a competitive attack?
the stock market reaction to the initial competitive attack
Which of the following is not one of the reasons a company might launch new competitive actions?
to find new sources of raw materials
High pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy
transnational strategy
Units coordinate their activities with headquarters and with one another. Units adapt to special circumstances only they face. The entire organization draws upon relevant corporate resources. These are all attributes of which type of strategy?
transnational strategy
Which of the following is a disadvantage of a transnational strategy?
unique managerial challenges in fostering knowledge transfer
Industries in which proportionally more value is added in __________ activities are more likely to benefit from a global strategy.
upstream
Software Tech, Inc., a company in the computer software industry, invests heavily in Research and Development, and product design. Thus, most of its value is added ________.
upstream
Southwest Airlines began its no frills, no meals strategy in the late 1960s as a direct assault on the major carriers of the day. What type of competitive action does this represent?
A tactical action because it is a refinement of an existing strategy.
The traditional approach to strategic control is sequential. Which of the following is not one of the steps in the sequence?
Action plans are submitted by lower level managers.
Continuous monitoring, in the contemporary approach, is beneficial because _____________.
it reduces time lags
Which of the following is not a limitation of a multidomestic strategy?
single locations may lead to higher tariffs and transportation costs
Which of the following is not an example of how organizational culture exerts behavioral control?
Culture sets explicit boundaries.
Which of the following is not a factor that makes it more difficult for new ventures to be successful as differentiators?
Customer service is often costly, but it does not affect a differentiation strategy.
Which one of the following explains why so few firms are global?
Geographic distance is multiplied by distance in culture, language, religion, and legal and political systems.
According to the text, which of the following might does not make it difficult for entrepreneurial firms to effectively pursue a strategy of differentiation?
Incumbent firms are constantly seeking opportunities to specialize in market niches.
Which of the following is NOT one of the characteristics of reward and incentive systems?
They represent a poor means of influencing the culture of an organization.
Which of the below best describes the competitive tendencies of small firms?
Small firms are more nimble and can respond quickly to competitive attacks.
______________ provide(s) a key avenue for growth for many young and small firms through partnering to obtain resources and/or expand into new markets.
Strategic alliances
In the Porter Diamond of National Advantage framework which of the following factors does not affect nation competitiveness?
The conditions in the nation governing the nature of foreign rivalry
Which of the following is not a risk associated with a global strategy?
The pressures for local adaptation may elevate the cost structure of the firm.
Which of the following is the primary drawback of traditional strategic control systems?
They lack the flexibility needed to adjust to changes in the environment.
For businesses facing complex and turbulent business environments, which of the following is true?
Traditional strategic controls are usually inappropriate.
Which of the following statements about venture capital is not true?
Venture capital is a form of public equity financing.
In considering the decision to offshore, which of the following generally is not one of the hidden costs?
Wage deflation
__________ are most appropriate when a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries.
Wholly owned subsidiaries
The difference between a franchise contract and a licensing contract is that ___________.
a franchise contract is more specific and usually longer in duration
One of the ways entrepreneurs achieve success is by using resources more efficiently. This is an example of how entrepreneurs use ______________ strategy.
a low-cost leader
Pandora entered the radio business in 2000 using the Music Genome Project system that analyzes music for its underlying traits as a means to distinguish itself. It was using ______________ entry strategy.
a pioneering
A firm is considering a large price cut on its leading product as a way to gain market share. One executive strongly disagrees with the price cut. He observes that they are in the same marketplace as their rivals and do not have any competitive advantages in their cost structure. If they cut prices, their competitors will likely do the same. The end result is that everyone will make less money. These arguments are an example of ________________.
a strategy of forbearance
According to the text, for an entrepreneurial start-up to be successful, three ingredients are critical. What are they?
a viable opportunity, available resources, and a qualified and motivated founding team
Which of the following terms is used to refer to opportunities that are practical and physically possible?
achievable
As firms simultaneously downsize and face the need for increased coordination across organizational boundaries, a control system based primarily on ______________ is dysfunctional.
boundaries and constraints
Behavioral controls are aspects of strategic change that involve finding the appropriate ______________ and ______________ among the culture, rewards, and boundaries of the firm.
balance; alignment
Intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace is known as _____________.
competitive dynamics
Recent trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following EXCEPT ______.
customer needs, interests, and tastes becoming increasingly homogenized
The U.S. Small Business Administration supports small business through all of the following EXCEPT
investing venture capital
Elements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by __________.
decreased shipping and transportation costs inherent in local production
Generally speaking, the opportunity recognition process consists of two phases of activity. They are ______________ and _____________.
discovery; evaluation
Individual rationality ______________ organizational rationality.
does not always guarantee
Contemporary approaches to strategic control rely primarily on _____________.
double-loop learning
When an opportunity is attractive long enough for it to be successfully developed and deployed, it is said to be _____________.
durable
The sale of Boeing commercial aircraft and Microsoft operating systems in many countries enables these companies to benefit from ____________.
economies of scale
Which of the following is not a common source of new business opportunities?
future work
When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market. When high pressures exist to lower costs, companies should choose a __________ or __________ in order to compete in the global marketplace.
global strategy; transnational strategy
Square provides a means for small businesses to process credit and debit card sales without signing up for a traditional credit card arrangement of monthly fees and minimum charges. It used which new entry strategy to enter the market initially?
imitative
Seeking products or services that have been successful in one market and introducing the same basic product or service in another segment of the market is referred to as _____________.
imitative new entry
Which of the following is a reason for the rise in regional expansion?
increase in the number of trading blocs and free trade zones
The Wall Street Journal and the New York Times have seen the intensity of their rivalry increase. One factor driving this is that the Wall Street Journal has moved from financial news reporting to general national and global news reporting and finally, to adding local New York news. The rivalry of these two news providers has increased due to _____________.
increased market commonality
When subcultures emerge that have shared values opposite from the dominant culture of an organization _____________.
individuals begin working at cross purposes
Top managers at ABC Company meet every Friday to review daily operational reports and year to date data. This is an example of _____________.
informational control
Which would be the appropriate strategy for companies to use to compete in the global marketplace if the marketplace pressure is for lower costs with little pressure for local adaptation?
international strategy
Fees that a multinational receives from a foreign licensee in return for its use of intellectual property (trademark, patent, trade secret, technology) are usually called _____________.
intra-corporate inflows
According to a study by the Kaufmann Foundation, which of the following is the largest source of funding for businesses that have been operating at least five years?
loans
Multinational firms are constantly faced with the dilemma of choosing between _______ and __________.
local adaptation; global integration
According to the text, new ventures launched by entrepreneurial teams are more likely to be successful than ventures launched by _____________.
lone wolf entrepreneurs
BCG authors Stalk and Lachenauer published a book in which they listed competitive strategy for winning against incumbent rivals. Which of the following is not one of their suggested strategies?
lower competitor costs
Aircraft makers Boeing and Airbus have a high degree of ______________ because they make very similar products and have many buyers in common.
market commonality
Which of the following refers to a situation where a company has a high concentration of its business in a particular industry market?
market dependence
Which of the following is the most important resource for a start-up activity?
money
According to Michael Porter, firms that have experienced intense domestic competition are _________________________________.
more likely to design strategies and structures that allow them to successfully compete abroad
High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy?
multidomestic strategy
The best example of a tactical action that a company might use in response to a competitive attack is to _____________.
offer price discounts and rebates
The process of identifying, selecting, and developing new venture opportunities is known as _____________.
opportunity recognition
The majority of entrepreneurial start-ups are financed through monies from _____________.
personal savings and the contributions of family and friends
Which of the following is NOT a common new entry strategy according to the text?
proactive new entry
Which of the following is not a primary source of financing for entrepreneurial start-ups?
public equity
In order to realize the strongest competitive advantage, firms engaged in worldwide competition must
pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal results
The new entry strategy that a firm choses is dependent upon the ______________ and the ______________ of the new business concept.
riskiness; innovativeness
A __________ is a business in which a multinational company owns 100 percent of the stock.
wholly owned subsidiary
