Unit1

In accordance with Michael E. Porter's generic strategies model, a firm with a broad competitive scope that has high sales volume, low margins, and efficient supply and distribution channels will most likely choose a A.Cost leadership strategy. B.Differentiation strategy. C.Cost focus strategy. D.Focused differentiation strategy.

A

An entity's mission statement is usually decided on by the A.Board of directors.B.Executive-level management.C.Stockholders at the first general meeting.D.Applicable laws of the state of incorporation.

A, duh

Bulez Widgets, Inc., operates globally and has been praised for its ability to understand the needs and wants of the local market while retaining global control of certain elements of the marketing process and strategy. Bulez is A.Maintaining a good ratio of local to global control. B.None of the answers are correct. C.Maintaining a good ratio of standardization and customization. D.Establishing local guidelines so that local sales and profit goals are met.

Answer (A) is correct.Bulez is maintaining a good ratio of local to global control. Local managers may understand the wants and needs of their market, but the global firm must still retain control of certain elements of the marketing process and strategy.

A firm should state its primary competitive scopes when it A.Defines its strategic business units (SBUs). B.Formulates its mission. C.Establishes strategic control points. D.Makes investment and divestment decisions.

Answer (B) is correct. A mission statement should address reasonably limited objectives, define the firm's major policies and values, and state the firm's primary competitive scopes (e.g., industries, products and services, applications, core competencies, market segments, degree of vertical integration, and geographic markets).

Which of the following strategies combines elements of multinational, international, and multilocal strategies?A.Multidomestic strategy.B.Regional strategy.C.Transnational strategy.D.All-encompassing strategy.

Answer (B) is correct.A regional strategy combines elements of multinational, international, and multilocal strategies. The goal of this strategy is to create regional products and a regional value chain. Transnational = multinantional multi domestic = multilocal

According to Michael E. Porter's generic strategies model, a firm that successfully adopts a cost focus strategy is most likely to A.Have weak customer loyalty. B.Know its market well. C.Enjoy economies of scale. D.Have a strong R&D function.

Answer (B) is correct.Cost focus is the generic strategy of a firm that seeks competitive advantage through lower costs but with a narrow competitive scope (e.g., a regional market or a specialized product line). The reason for a cost focus strategy is that the narrower market can be better served because the firm knows it well.

Which of the following is an advantage of strategic management? A.It ensures industry dominance. B.It is most useful for entities that have already formulated their mission statements C.It is consistent with the trend away from authoritarian managerial styles. D.It prevents budget overruns.

Answer (C) is correct.Strategic thinking helps employees understand and implement managerial decisions. Moreover, it is consistent with the modern trend toward cooperation and teamwork and away from authoritarian managerial styles.

Which of the following is an example of an outcome of strategic planning? A.A document specifying a sequence of steps detailing the exact manner in which a certain activity must be accomplished. B.A formal statement of the organization's definition of the fundamental truths that guide its actions. C.A broad statement of concepts that emphasizes the implementation of organizational objectives over the long term. D.A set of general guides for action that channel thinking and allow a certain amount of discretion in execution.

Answer (C) is correct.The strategic plan states the means by which an entity expects to achieve its stated mission. Achieving the mission is predicated on implementing long-term objectives.

What is an advantage of direct investment over indirect investment? A.Exposure to currency fluctuations. B.Cheaper materials. C.The host country's control over the investment. D.A better image in the home country.

B

CosmoGraphics, Inc., has been operating in the United States but plans to brand its products globally. It recently hired Rajiv Gupta, an internationally oriented CEO, in order to make this transition. Rajiv believes that talent, not nationality, should determine staffing decisions throughout the firm. Rajiv's managerial attitude can best be described as A.Egocentric.B.Ethnocentric.C.Geocentric.D.Polycentric.

C A geocentric attitude is truly internationally oriented, absorbing the best that various cultures offer. Talent, not nationality, determines personnel decisions throughout the firm. A polycentric attitude assumes that cultural differences require local managers to make most decisions. Thus, talent is less of a factor than nationality.