TEST 3

To create a competitive advantage that is sustainable over time, the international company should try to develop competencies that:

A. create value for customers and for which they are willing to pay.

When a company faces strong pressures for reducing costs and limited pressure to adapt products for local markets, it should tend to use a

A. global strategy

Scenarios

A. has an objective of envisioning possible futures that might lie outside their traditional frame of reference

According to the text, changes in the way corporate planning is done:

A. include greater attention being paid to sociopolitical developments.

According to the text, the strategic planning process provides a formal structure in which managers will:

A. set corporate objectives.

In analyzing the corporate controllable variables, management must address the question:

A. who are the company's target customers?

Policies

B. are broad guidelines used to assist lower level managers to handle recurring problems.

An itemized projection of revenues and expenses for a future time period is a

B. budget.

Action plans to enable organizations to reach their objectives are known as:

B. competitive strategies.

Performance measures are done to:

B. determine if the strategy and its implementation are proceeding successfully.

The new directions in planning

B. have brought operating managers into the planning process.

In the new strategic planning process:

B. interaction with important customers and suppliers should be included.

A broad statement that defines the organization's purpose and scope is known as a:

B. mission statement.

When there is strong pressure for a company to adapt its products or services for local markets, it should tend to use a:

B. multidomestic strategy.

Tactical plans

B. spell out in detail how objectives will be reached.

In planning, there has recently been a decided move among many firms:

B. toward a less-structured format and a shorter plan.

According to the text, value chain analysis focuses primarily on what question(s)?

C. How will this customer value be created?

Plans for the best- or worst-case scenarios or for critical events that could have a severe impact on the firm are known as:

C. contingency plans.

According to the text, competencies:

C. create value for customers and for which customers are willing to pay.

To set corporate objectives, management must first:

C. define the firm's mission.

According to the text, the firm's ultimate manager of strategic planning is the:

C. firm's chief executive officer.

Historically, more aspects of _______ have been standardized and coordinated worldwide by companies than has been the case for other value chain activities such as _______.

C. manufacturing, marketing

Most top managers:

C. prefer verifiable objectives.

Managers of international companies that are attempting to develop a competitive advantage face a formidable challenge because:

C. resources are always scarce, there are not many equally alternative ways to use the company's scarce resources and are forced to make choices.

According to a survey by Bain & Company, the most commonly used management tool among global executives is:

C. strategic planning.

Knowledge that an individual has but that is difficult to express clearly in words, pictures, or formulae, and therefore difficult to transmit to others is known as:

C. tacit

When a company faces strong pressures for both reducing costs and adapting products for local markets, it should tend to use a:

C. transnational strategy

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

C. value chain analysis.

A description of the company's desired future position if it can acquire the necessary competencies and successfully implement its strategy is known as a:

C. vision statement.

To fully understand why, how, and where they intend to do business, now and over time, managers must have:

D. a clear understanding of the company's mission, a vision on how to achieve the mission and how the company plans to compete.

The planning method that is becoming more popular is

D. a combination of top down and bottom up.

International firms have found it necessary to institute formal global planning:

D. to provide top management with a means to identify threats and opportunities worldwide and to provide consistency of action among the firm's managers.

According to the text, the strategic planning process provides a formal structure in which managers will:

E. analyze the company's external and internal environments and define the company's business and mission.

Tactical plans

E. are operational plans and are specific and short-term compared to strategic plans.

A strategic plan

E. describes how the firm's goals will be met and contains sales forecasts and budgets.

International strategy:

E. has to achieve and maintain competitive advantage. It also needs to be consistent among various functions, products, regional units of the company, and with the demands of international competitive environment.

When a company faces relatively weak pressures for local responsiveness and cost reductions, it should tend to use a:

E. home replication strategy.

Scenarios assist managers

E. in becoming aware of the critical elements of the external forces and in brainstorming various "what-if" situations.

Procedures:

E. prescribe how certain activities will be carried out and assure that all budgets will be prepared using the same format.

In the traditional strategic planning approach:

E. the CEO and head of planning together devise a corporate plan, which would then be handed to the operating people for execution and this tended to fall victim to collective mind-sets about competitive environment.

Frederick Gluck, management consultant, says for firms to develop the flexibility to compete, managements must make the following changes in their planning methods:

E. top management must dedicate more time to deciding how things ought to be done and nature of planning must change from being an exercise in forecasting to an exercise in creativity.