Principles of Management CH. 5&6 Cate Loes
What term describes a business-level strategy aimed at achieving the overall lowest cost structure in an industry?
Cost leadership
What name is given to the sale of goods and services to foreign markets?
Exporting
strategic management
all the processes an organization undertakes to develop and implement its strategic plan
In SWOT analysis, an environmental circumstance that is potentially beneficial for the firm is called
an opportunity.
By requiring products to be sold for not less than what it costs to produce them, the United States is attempting to prohibit
dumping.
The ratio at which one nation's currency can be exchanged for another nation's currency or gold is the
exchange rate.
When a company produces a high-tech, expensive bicycle aimed at serious and affluent bike enthusiasts, it is using the business-level strategy called
focus.
You sell Gourmet Mushrooms (GMs) at $100 an ounce. You have a secret source of supply, jealously guarded. Your GMs are better than your competitors' mushrooms, and only the very wealthiest Americans buy them. You are using the business strategy called
focus.
You are an apple farmer and spokesperson for the American Apple Association. You are faced with severe dumping from apple growers in Transoceania, where apples grow wild and the people pay to pick apples as a form of recreation. To counter this threat, you are going to lobby Congress and the president to
impose a protective import tariff.
What term is used to describe a formal written declaration of the organization's mission that often includes the firm's philosophy, its primary products and markets, the intended geographic scope, and the nature of the relationships between the firm, its stakeholders, and society?
Mission statement
MidAmerican Energy Holdings Company has doubled its wind energy capacity by installing windmills and high-tech batteries to make it a "cleaner" utility company. In high-tech renewable energy, this company has a
distinctive competence.
Your saltwater taffy, which you produce right next to the Pacific Ocean in Orchard Park, Oregon, has a national reputation. You sell all you can make, and people drive hundreds of miles to your shop to buy it. You have a
distinctive competence.
Which of the following refers to an economic and political union of 28 member nations that are located primarily in Europe?
European Union (EU)
What are strategic goals?
Goals set by higher managers that deal with such general topics as the firm's growth, new markets, or new goods and services
Which of the following refers to the market value of a nation's total output of goods
Gross domestic product (GDP)
What term is used to describe the product life cycle stage characterized by dramatic increases in the product's market share?
Growth
Which of the following characteristics relates to dumping?
Occurs when a country or business firm sells products at less than what it costs to produce them
Which of the following characteristics relates to a business-level strategy?
The area of responsibility usually assigned to the divisional-level managers
What term describes the purchase of overseas production and marketing facilities, in which a company may control the facilities outright, or it may be the majority stockholder in the company that controls the facilities?
Direct investment
What term describes what a firm does well relative to its competitors?
Distinctive competence
Which of the following refers to a definition of an organization's fundamental purpose and its basic philosophy?
Mission
What term describes an international economic organization comprised of 30 countries that accept the basic principles of free-market economies and representative democracy, and that recommend and promote policies to improve the well-being of consumers and societies across the world?
Organization of Economic Cooperation and Development (OECD)
What name is given the transfer of manufacturing or other functions (such as data processing) to countries where labor and supplies are less expensive?
Outsourcing
What name is given to the maximum number of units of a particular product that may be imported into a country?
Quota
What name is given to the evaluation of the organization's internal strengths and weaknesses and the opportunities and threats associated with the business's external environment?
SWOT analysis
Which of the following refers to a partnership formed to create competitive advantage on a worldwide basis?
Strategic alliance
Which of the following refers to a general statement of actions an organization intends to take or is taking that is based on the fit of the organization with its external environment?
Strategy
Which of the following characteristics relates to the product life cycle?
The cycle of birth, growth, maturity, and decline of a product
The ______ loans money to countries throughout the world for reconstruction and development, and also makes loans to poorer countries for infrastructure and social services purposes.
World Bank
Which of the following characteristics relates to the North American Free Trade Agreement (NAFTA)?
Effectively merged Canada, the United States, and Mexico into one market of about 400 million consumers by eliminating most tariffs and trade restrictions on agricultural and manufactured products among the three countries
Which of the following characteristics relates to the World Bank?
Established and supported by the industrialized nations in 1946 to loan money to underdeveloped and developing countries
Which of the following characteristics relates to countertrade agreements?
Exporting that involves bartering products for other products instead of for currency
If Peru wants to purchase machine parts from a German company but lacks German marks, it will probably go to which of the following institutions to borrow the marks?
International Monetary Fund
Which of the following refers to the buying, selling, and trading of goods and services across national boundaries?
International business
What name is given to the product life cycle stage when the product's market share either slows or has no growth?
Maturity
When a product has been on the market for many years, such as the automobile, and its growth is slow at best, what stage of the product life cycle is it said to be in?
Maturity
What term describes the agreement between ten Southeast Asian countries with the goal to promote economic growth and overall progress in the area via trade and security?
Association of Southeast Asian Nations
Which of the following refers to the initial stage of the product life cycle when the product is introduced?
Birth
What name is given to a business strategy in which the strategic business unit offers a unique good or service to a customer at a premium price?
Differentiation
Which of the following characteristics relates to contingency plans?
Alternate courses of action to be undertaken if certain organizational or environmental conditions change
What is meant by focus?
A business strategy in which the business concentrates on one part or segment of the market and tries to meet the demands of that segment
Which of the following characteristics relates to global business (globalization)?
A strategy in which organizations treat the entire world or major regions of it as the domain for conducting business
What name is given to a form of licensing in which a company agrees to provide a name, logo, methods of operation, advertising, products, and other elements associated with the company's business, in return for a financial commitment and the agreement to conduct business in accordance with the company's standard of operations?
Franchising
What name is given to the final result that a firm wishes to achieve?
Goal
_____ of a plan is where the organization goes from the "thinking" mode to the "doing" mode.
Implementation
Which of the following refers to a tax levied by a nation on goods bought outside its borders and imported into the country?
Import tariff
What term describes the physical facilities that support a country's economic activities, such as railroads, highways, ports, airfields, utilities and power plants, schools, hospitals, communication systems, and commercial distribution systems?
Infrastructure
What is meant by decline?
The product life cycle stage marked by decreases in the product's market share
What is meant by importing?
The purchase of goods and services from a foreign source
What is meant by corporate strategy?
The scope and resource deployment components of strategy for the enterprise as a whole
Which of the following characteristics relates to a joint venture?
When a company that wants to do business in another country finds a local partner (occasionally, the host nation itself) to share the costs and operation of the business
When a nation pays for imports with its own goods, it is using
a countertrade agreement.
The fact that the American company 3M owns a film-manufacturing facility in Italy is an example of
a direct investment.
You are the president of Henry Motor Corp., and you see the great potential markets in Eastern Europe for personal transportation. Your plan is to purchase an old Soviet tank plant and convert it into an auto factory. The Russian government welcomes your plan, which is an example of
a direct investment.
"Improving people's lives by providing gas and electric services in a sustainable way -- affordable, reliable and clean" is an example of
a mission statement.
If it wants to reduce the dollars flowing out of the country, the United States can limit the number of garments being imported from China and Vietnam by imposing
a quota.
diversification
a strategy of acquiring or developing other businesses, which must ultimately be justified by its ability to build stockholder wealth
In SWOT analysis, an ability or attribute that a company possesses that may give it a distinctive competence is called
a strength
According to the text, a blueprint of acceptable behavior that is passed from one generation to the next is called
culture.
When Reebok has some of its athletic shoes produced by a Korean company, but the Reebok name still appears on the shoes, this illustrates
contract manufacturing.
The first step in strategic planning is
determining the mission and strategic goals.
When a firm offers a unique good or service to a customer at a premium price, it is following the business-level strategy of
differentiation.
According to Hofstede's cultural dimensions theory, _____ tend to be self-reliant and place a high level of importance on freedom and ambition, while _____ place more value on the team than the individual.
individualists; collectivists
When Weseeyu, Inc., of Rochester, New York, sells contact lenses to people in Moscow, Russia, the company
is exporting the lenses.
You are the producer of Western Denim brand blue jeans. The pants are in high demand in Pangia; however, shipping costs, tariffs, and trade restrictions are insurmountable. As a last resort, you have entered into an agreement to let a local Pangian manufacturer use your name, materials, and trademark to produce the jeans in exchange for a royalty. This is a
licensing agreement.
Miller Beer allows a Canadian firm to use its name, formula, and brands in return for a royalty. This arrangement is known as
licensing.
At even the largest and most affluent corporation, the strategic management process begins with
limited resources.
What name is given to the product life cycle stage when the product's market share either slows or has no growth?
maturity
If companies do research to learn about cultural differences before engaging in trade in a particular country, then problems arising from these cultural differences can be
minimized
Which of the following refers to a definition of an organization's fundamental purpose and its basic philosophy?
mission
What term is used to describe a formal written declaration of the organization's mission that often includes the firm's philosophy, its primary products and markets, the intended geographic scope, and the nature of the relationships between the firm, its stakeholders, and society?
mission statement
A corporation that operates in several countries without significant ties to any of them is a
multinational.
Which of the following refers to a set of activities intended to achieve goals, whether for an entire organization, department, or an individual?
plan
tactical plans
plans that are designed to achieve tactical goals
operational plans
plans that are intended to achieve operational goals
strategic plans
plans that are intended to achieve strategic goals
operational goals
short-term goals that are addressed to first-line managers and usually apply to specific work operations that lead to the production of goods or services
The translation of product names can be a crucial factor in the success or failure of a foreign marketing effort because of
sociocultural differences.
The purpose of a strategy is to
take advantage of what the organization does well, or hopes to do well.
SWOT Analysis
the evaluation of the organization's internal strengths and weaknesses and the opportunities and threats associated with the business's external environment
Strategic planning differs from general planning in that it focuses on
the external environment and long-term goals.
tactical goals
the intermediate goals of the firm, which are designed to stimulate actions necessary for achieving the strategic goals
