Module 9
If a company needs to reduce costs and doesn't feel pressured to adapt its products to a local market, it should use a
global strategy to compete internationally.
policies
help companies economize on managerial time and promote consistency among their operating units. Multiple choice question.
Under the home replication strategy, new product development takes place in the
home market
A firm facing relatively weak pressures for local responsiveness and cost reduction should pursue a
home replication strategy
What are the five strategies a company can use to compete internationally?
home replication, multi domestic, regional, global, and tras national
Compared to the traditional process, in the new strategic planning process
interaction with important customers and suppliers is included
The purpose of contingency planning is to be ready for events that have a severe impact on the firm.
true
An assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations, intended to determine where and to what extent value is added to the final product or service, is known as
value chain analysis
What are managers' key concerns today as they make their strategic plans?
-strategies, issues, implementation
Value Chain
A set of interlinked activities that adds value to the final product or service is called the
Which type of planning begins at the highest level in the organization and continues downward?
top-down
Barry's boss asks him to prepare a description of where the company hopes to be in ten years if it is able to buy out its trading partner. His boss is requesting a
vision statement
Which of the following are associated with the home replication strategy?
Marketing strategy is controlled by the home-country office. Product development occurs in the home market.
Strategic planning is the exclusive province of CEOs
Strategic planning is no longer something only the company's most senior executives do. false
What is a characteristic of a traditional strategic planning approach?
The CEO and the head of planning get together to devise a corporate plan, which is then handed to the operating people for execution.
During the strategic planning discussion, committee members reviewed the current systems in place in the company's manufacturing plant to determine if it could handle the anticipated increased capacity should the company go through with the foreign investment. Which step in the strategic planning process does this reflect?
analyze the company's internal environment
Which type of planning begins at the lowest level in the organization and continues upward?
bottom-up
Actions plans to help organizations reach their objectives are called
competitive strategies
To be effective, a company's international strategy must be
consistent among all the functions and activities of the company.
Plans for the best- or worst-case scenarios or for critical events that could have a severe impact on the firm are known as
contigency plans
When a firm makes plans for the best- or worst-case scenarios or for critical events that could have a severe impact on the firm, the firm is doing
contingency planning
The best strategy for competing internationally depends on the relative amount of pressure the company faces to adapt to its local markets and to achieve
cost reductions
tactical plans are also known as
operational plans
a drawback of top-down
planning is that it restricts initiative at the lower levels of the organization.
an advantage of bottom-up
planning is that the people responsible for attaining goals are formulating them.
The broad guidelines issued by a company's upper management for the purpose of assisting lower-level managers handle recurring problems are called
policies
What are the three types of measures to assess performance as outlined in the text?
(1) measures of the company's success in obtaining and applying the required resources(2) measures of the effectiveness of the company's employees, within and across the firm's international network of operations, in performing their assigned jobs;(3) measures of the company's progress toward achieving its mission, vision, and objectives and doing so in a manner consistent w the company's stated value
What are the three areas of concern in the contemporary strategic management approach to planning
(1) who does the planning(2) how it is done(3) the contents of the plan
Which of the following statements accurately describe standardization and planning in strategy formulation for companies competing internationally
-Using scenarios in the planning process can help firms understand the implications of potential future changes on their strategies. -Most companies look for ways to benefit from standardization. -Many top executives believe that differences in foreign environments require marketing strategies to be determined locally.
Strategic planning answers all of the following questions EXCEPT
-where it is going in the future, how it will get there, and how it will assess whether and to what extent it has achieved its goals EXCEPT : why the firm has failed to achieve previous goals
Typically, the time frame for short-range plans is
1-3 years
What are the three key questions managers ask as part of value chain analysis?
1. Who are the company's target customers? 2. What value does the company want to deliver to these customers? 3. How will this customer value be created?
What steps are included in the global strategic planning process?
1. analyze the company's external environments 2. analyze the company's internal environment 3. define the company's business and mission 4. set corporate objectives 5. quantify goals 6. formulate strategies 7. make tactical plans
North America, the European Union, and Asia account for
80% of the worldwide revenue of large multinationals in the manufacturing and service sectors.
International Strategy
A plan that guides the way firms make choices about developing and deploying scarce resources to achieve their international objectives is called a(n)
Shondra reports to the management team that Italy has decided to increase the tax on all manufactured textiles. As a result, the company will pay more for the fabrics it orders. Which step in the global strategic planning process will help Shondra learn this information?
Analyze external environments
Which one of the following statements reflects how strategic planning is done today?
Effective strategic planning encourages ideas to surface anywhere in the organization and at any time.
Strategic Planning
The process by which an organization determines where it is going in the future, how it will get there, and how it will assess whether and to what extent it has achieved its goals is called
What is a disadvantage of bottom-up planning?
There is no guarantee that the sum total of all the affiliates' goals will coincide with those of headquarters.
How have the new directions in planning affected companies?
They have brought operating managers into the planning process
internal consistency
To be effective, a company's international strategy must be consistent among all departments of the company. In other words, the international strategy must have
Why do international companies facing high levels of change and uncertainty use scenario planning?
allows managers to anticipate and prepare for opportunities and threats that cannot be fully predicted or controlled.
Objectives are typically more quantifiable as they progress
down through the organization
The balanced score card approach can help a firm monitor progress in achieving strategic objectives across all of the following dimensions EXCEPT
external internal, financial, customer
Companies use a contingency plan as a guideline for marketing media placement.
false
In any type of business, long-range planning constitutes any plan over 5 years.
false. For some businesses, long-range planning may be for a 5-year period. For others, such as aircraft manufacturers, a 5-year period reflects a medium-term plan.
Who is the ultimate manager of strategic planning and strategy making?
firm's chief executive officer
If there are four organizational levels in a company, there will be
four strategic plans
The practices that organizations and their managers use for identifying, creating, acquiring, developing, dispersing, and exploiting competitively valuable knowledge are called
knowledge management
The practices that organizations and their managers use for identifying, creating, acquiring, developing, dispersing, and exploiting competitively valuable knowledge is known as
knowledge management
Many companies have moved toward a strategic planning approach with a
less structured format
if a company is facing strong pressure to adapt its product to the local market, the
multidomestic
Multiple, plausible stories about how decisions might affect a company's future are known as
scenarios
Some researchers say that may be merely a stage in the evolution of international companies, and that increased globalization of sales and other value chain activities will occur over time as companies accumulate international experience.
semi-globalization
Michell's company delivered the following statement at the shareholder meeting. "The company plans to (1) grow our leadership in the manufacturing sector, (2) grow profits both nationally and internationally, and (3) become a leader in the service sector." This statement reflects the firm's course of action. What aspect of the strategic planning process does this statement reflect?
set corporate objectives
A company would create procedures in order to
specify how certain activities will be carried out
Firms that pursue a global strategy typically offer
standarized products and services.
Suppose a company has a goal of increasing sales by 20 percent. To achieve this goal, the company hires three new specialized sales reps and goes to four trade shows. The goal of increasing sales can best be described as a(n)
strategic plan and the plans to hire new sales reps and attend trade shows are tactical plan
Today, strategy consultants are urging companies to assign strategic planning to
teams of line and staff managers
Don's boss asked him to prepare a report that shows the activities in the warehouse from the moment raw steel enters the plant until the end product is shipped out to the customer. His boss wants to understand the activities that go into the product. In other words, Don's boss is seeking to understand
the value chain
Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because
time, talent, and money are scarce.
What is the goal of value chain analysis?
to enable managers to identify which set of activities it will do itself and which it will outsource
A firm facing strong pressure for local adaptation and strong pressure for cost reduction should pursue a
transnational strategy
A broad statement that defines the purpose for a company's existence is the mission statement.
true
Corporate objectives help firms stay on course with their mission and vision.
true
Most managers prefer objectives that are qualified but not quantified.
true
When managers are analyzing the corporate controllable variables, the three key questions they must address about their business include
who are the company's target customers?
A plan that guides the way firms make choices about developing and deploying scarce resources to achieve their international objectives is called a
international strategy
Local adaptation of products usually
increases a company's cost structure
When pressure to reduce costs is low and pressure for local adaptation is high, firms should pursue which strategy to compete internationally?
multidomestic
Corporate objectives are typically easier to quantify at which level of a corporation?
operational
A prediction of future sales performance is called a
sales forecast
The statement that provides a description of a company's desired future position, of what it hopes to accomplish if it can acquire the necessary competencies and successfully implement its strategy, is called the
vision statement
A strategic plan is used by a company to
present sales forecasts and budgets.
A broad statement that defines the purpose of a company's existence, including its business, objectives, and approach for reaching those objectives is called the
mission statement
Google's statement that it wants "to organize the world's information and make it universally accessible and useful" is the company's
mission statement
Scenarios allow a business to
project possible outcomes of business decisions
Judson's company decided to move its operations internationally after learning that manufacturing facilities in Indonesia will give tax breaks to international firms starting next year. This example demonstrates how Judson's company used
knowledge management to gain competitive advantage
Under the contemporary strategic management approach to strategic planning, who is responsible for strategic thinking, planning, and implementation?
line management
The contents of a strategic plan today are more likely to reflect a
long term perspective on resource allocation.
Compared to strategic plans, tactical plans are
more detailed and specific
Strategic planning is
more specific as it moves down the organizational levels.
Historically, companies have tended to standardize their R&D and manufacturing strategies
more than their marketing strategies
Relatively few companies act on key international trends they observe
often they lack the skills and resources to decide whether, how, and when to act in order to deal effectively with these environmental forces
To develop a strategy for reaching corporate objectives, management must first try to
quantify them
The two conflicting strategic alternatives facing international firms are
reducing costs; adapting to local markets
