Deck 11: Global Strategy

Question 1

In the context of value chain analysis,which of the following is an example of a "primary" activity?

A) materials management
B) research and development
C) manufacturing
D) human relations
E) information systems

Answer 1

B

Question 2

______________ is concerned with the creation of goods or service.

A) Profitability
B) Marketing
C) Sales
D) Production
E) R&D

Answer 2

D

Question 3

A firm's __________ can be defined as the actions that managers take to attain the goals of the firm.

A) systems
B) value chain
C) operations
D) strategy
E) plans

Answer 3

D

Question 4

A basic condition that determines a firm's profits is:

A) the firm's costs of distribution.
B) taxes.
C) the amount of value customers place on the firm's goods.
D) government regulations.
E) variable costs

Question 5

All of the following,except ____________,are included in infrastructure.

A) structure
B) employee relations
C) culture
D) control systems
E) All of these answers are correct

Question 6

In the context of value chain analysis,the support activities of a firm include:

A) human resources, management information systems, materials management, and accounting
B) accounting, infrastructure, R&D, and materials management
C) manufacturing, marketing and service, R&D, and management information systems
D) human resources, materials management, infrastructure, and information systems
E) infrastructure, R&D, human resources, and information systems

Question 7

A company creates _______ by converting inputs that cost C into a product on which consumers place a value of V.

A) value
B) wants
C) profits
D) demand
E) profitability

Question 8

Profit can be defined as:

A) costs minus profits
B) the difference between time and money
C) quantity times profit
D) sales plus costs
E) the difference between TR and TC

Question 9

Actions that managers take to attain the firm's goals are referred to as _____.

A) value chain activities
B) strategies
C) systems
D) operations
E) tactics

Question 10

A simple example of _______ is rate of return on sales.

A) strategy
B) economies of scale
C) profitability
D) primary activity
E) profit

Question 11

_______ is the difference between total revenues and total costs.

A) Strategy
B) Profit
C) Asset
D) Economies of scale
E) Gross margin

Question 12

Sally creates _______ when she develops a way to maximize long-term profitability.

A) a strategy
B) a mission
C) competitors
D) a design
E) competitive advantage

Question 13

Which function ensures that the company has the right mix of skilled people to perform its value creation activities effectively?

A) Accounting
B) Human resources
C) Materials management
D) Infrastructure
E) information services

Question 14

In the context of value chain analysis,____________ activities allow the primary activities of production and marketing to occur.

A) complementary
B) secondary
C) support
D) subsidiary
E) staff

Question 15

The __________ function controls the transmission of physical materials through the value chain.

A) human resources
B) infrastructure
C) R&D
D) materials management
E) distribution

Question 16

According to the textbook,it is useful to think of the firm as a(n)__________ composed of a series of distinct activities,including production,marketing,materials management,R&D,human resources,information systems,and the firm infrastructure.

A) functional stream
B) momentum machine
C) inertia chain
D) value chain
E) business chain

Question 17

In the opening case,up until the financial crisis of 2008-09,Ford used a strategy of ____________.

A) price
B) quantity
C) quality
D) regional customization
E) centralizing firm decisions in Detroit

Question 18

The ___________ activities of a firm have to do with creating the product,marketing and delivering the product to buyers,and providing support and after-sales service to the buyers of the product.

A) support
B) subordinate
C) ancillary
D) primary
E) distribution

Question 19

Value chain activities can be categorized as:

A) primary activities and secondary activities
B) input activities and throughput activities
C) profitable activities and unprofitable activities
D) primary activities and support activities
E) value creation and value delivery

Question 20

In the context of value chain analysis,the primary activities of a firm include:

A) manufacturing, materials management, marketing and sales, and service
B) infrastructure (structure and leadership), human resources, and R&D
C) R&D, sales, and materials management
D) manufacturing, human resources, and materials management
E) production, marketing & service, and sales

Question 21

Suppose General Motors decided to manufacture brakes in Ireland,because a detailed analysis of country specific advantages indicated that Ireland is the optimal place in the world to produce brakes.In this example,General Motors is capturing ____________ by manufacturing brakes in Ireland.

A) location synergies
B) site expediencies
C) site commerce
D) location economies
E) offshore profits

Question 22

Locating a value creation activity in the optimal location for that activity can have one or two effects.First,it can lower the costs of value creation and help the firm to achieve a low-cost position,and/or:

A) it can enable a firm to differentiate its product offering from that of competitors
B) it can lower the cost of marketing and service
C) it can expedite the research and development process
D) it can create political good well
E) all of these answers are correct

Question 23

Moving down the experience curve allows a firm to reduce its cost of:

A) raw materials
B) creating value
C) distribution
D) R&D
E) production

Question 24

In theory,a firm that realizes _______________ by dispersing each of its value creation activities to its optimal location should have a competitive advantage vis-à-vis a firm that bases all its value creation activities at a single location.

A) multidomestic strategies
B) site synergies
C) site commerce
D) geographical distinctiveness
E) location economies

Question 25

McDonald's core competencies are:

A) materials management
B) developing and marketing brand name products
C) information systems and logistics
D) developing and managing customer loyalty programs
E) managing fast-food operations

Question 26

The term _______________ refers to the reduction in unit cost achieved by producing a large volume of a product.

A) volume synergies
B) captured savings
C) economies of scale
D) rent effects
E) cost efficiencies

Question 27

The ____________ refers to the systematic reductions in production costs that have been observed to occur over the life of a product.

A) experience curve
B) forward advantage
C) positive-sum result
D) managed advantage
E) economies of scale

Question 28

Learning effects tend to be more significant when a ____________ task is repeated because there is more than can be learned about the task.

A) repetitive manufacturing
B) standardized manufacturing
C) technologically complex
D) standardized service
E) multi-level

Question 29

Economies that arise from performing a value creation activity in the optimal location for that activity are called _____________.

A) site expediencies
B) location economies
C) site commerce
D) location synergies
E) offshore savings

Question 30

If Honda noticed that the unit costs of Honda Accords went down as the number of Accord's produced went up,Honda would be realizing the benefits of _______________.

A) captured savings
B) volume synergies
C) economies of scale
D) rent effects
E) learning effects

Question 31

__________________ is a way of further exploiting the value creation potential of a company's skills and product offerings by applying these skills and products in a larger market.

A) Retrenchment
B) Marketing
C) Global expansion
D) Brand name
E) Diversification

Question 32

All of the following are distinct advantages Mexico has over many Asian countries as a location for value creation activities,except:

A) low-labour costs.
B) more hard workers are found in Mexico than in Asia.
C) NAFTA has removed many trade barriers between Mexico, the U.S., and Canada.
D) proximity to the large U.S. market.
E) all of these answers are correct

Question 33

____________ permitting,the firm will benefit by basing each value creation activity it performs at that location where economic,political,and cultural positions are most conducive to the performance of that activity.

A) Production regulations
B) Resources and revenues
C) Trade barriers and transportation costs
D) Distribution and resource availability
E) Exchange rates and transportation costs

Question 34

Which of the following is not something firms that operate internationally are able to do?

A) Earn a greater return from the firm's distinctive skills or core competencies by leveraging those skills and applying them to new geographic markets.
B) Earn a greater return by leveraging any valuable skills developed in foreign operations and transferring them to other entities within the firm's global network of operations.
C) Realize location economies by dispersing individual creation activities to those locations around the globe where they can be performed most efficiently.
D) Realize greater cost economies from experience effects by serving an expanded global market from a central location, and increasing the costs of value creation.
E) None of these answers is correct

Question 35

A number of studies have observed that a product's __________ decline by some characteristic each time accumulated output doubles.

A) financing costs
B) production costs
C) marketing costs
D) R&D costs
E) distribution costs

Question 36

According to our textbook,a firm creates a(n)_____________ by dispersing the stages of its value chain to those locations around the globe where the value added is maximized or where the costs of value creation are minimized.

A) integrate circle
B) disperse chain
C) global web
D) international mesh
E) global conglomerate

Question 37

_____________ refer to cost savings that come from learning by doing.

A) Learning effects
B) Exponential effects
C) Ancillary effects
D) Indirect effects
E) R&D effects

Question 38

If Goodyear Tire Corporation experienced systematic reductions in the production costs of a particular product over the life of the product,they would be realizing ____________ effects.

A) managed production
B) forward advantage
C) experience curve
D) value chain
E) economies of scale

Question 39

The ability to spread fixed costs over a large volume results in a cost-savings phenomenon referred to as:

A) volume synergies
B) economies of scale
C) captured savings
D) size effects
E) volume discounts

Question 40

Skills within the firm that competitors cannot easily match or imitate are referred to as

A) core competencies.
B) global competencies.
C) in-born skills.
D) competitive threats.
E) competitive competencies

Question 41

According to our textbook,a firm's ____________ allow it to reduce the costs of value creation and/or to create value in such a way that premium pricing is possible.

A) special attributes
B) discriminate attributes
C) indigenous properties
D) core competencies
E) economies of scale

Question 42

Differences in consumer tastes and preferences,differences in infrastructure and traditional practices,differences in distribution channels,and host government demands are factors pressuring firms to ______________ in their international strategies.

A) be locally responsive
B) be globally standardized
C) be cost sensitive
D) integrate more "commodity" like features
E) be politically neutral

Question 43

Firms that compete in the global marketplace typically face two types of competitive pressures.They face pressures for cost reductions and:

A) pressures for volume increases
B) pressures to be locally responsive
C) pressures to be politically savvy
D) pressures for price reductions
E) pressures to reduce costs

Question 44

A(n)________________ strategy makes sense if a firm has a valuable core competence that indigenous competitors in foreign markets lack.

A) global
B) international
C) multidomestic
D) transnational
E) multinational

Question 45

Threats of protectionism,economic nationalism,and local content rules:

A) try to keep foreign companies out
B) dictate that international businesses manufacture locally
C) put harsh regulations on distribution
D) strictly regulate the raw materials that foreign companies use
E) make foreign markets unattractive

Question 46

Harvard Business School Professor Theodore Levitt has argued that consumer demands for local customization are ______________ worldwide.

A) declining
B) levelling out
C) increasing
D) a myth
E) diversifying

Question 47

When cost pressures are low and pressures for local responsiveness are low,a(n)_____________ strategy is the most appropriate.

A) multidomestic
B) transnational
C) global
D) international
E) multinational

Question 48

_________________ the skills created within subsidiaries and applying them to other operations within the firm's global network creates value.

A) Eliminating
B) Leveraging
C) Reducing
D) Cross-licensing
E) Expanding

Question 49

Pressures for cost reductions can be particularly intense in industries producing commodity products where meaningful differentiation on non-price factors is difficult and ____________ is the main competitive weapon.

A) quality
B) distribution efficiency
C) sales and service
D) price
E) product attributes

Question 50

The distinguishing feature of _______________ firms is that they extensively customize both their product offerings and their marketing strategy to match national conditions.

A) multidomestic
B) global
C) transnational
D) international
E) multinational

Question 51

The term ________________ refers to skills within a firm that competitors cannot easily match.

A) core competencies
B) indigenous properties
C) value chain
D) discriminate attributes
E) competitive advantages

Question 52

Among global firms,which of the following is not a factor that is driving pressures for local responsiveness?

A) Differences in distribution channels
B) Differences in infrastructure
C) Similarities in consumer tastes and preferences
D) Host government demands
E) Differences in traditional practices

Question 53

The appropriateness of the strategy that a firm uses in an international market varies with the extent of pressures for _____________ and ________________.

A) cost reductions; availability of financing
B) price concessions; quality improvements
C) availability of financing; product standardization
D) cost reductions; local responsiveness
E) market size; market characteristics

Question 54

Pressures for _____________ emerge when there are differences in infrastructure and/or traditional practices between companies.

A) government support
B) consumer support
C) local responsiveness
D) global cutbacks
E) Internal Responsiveness

Question 55

Firms use four basic strategies to compete in the international environment.These are:

A) a cultural literacy, an ethnocentric strategy, a nationalistic strategy, a global strategy
B) a cross-cultural strategy, a trade block strategy, a regional strategy, and a world strategy
C) a domestic-based strategy, an international-focused strategy, a local/regional-based strategy, and a cultural-based strategy
D) an international strategy, a regional strategy, a global strategy, and a world strategy
E) an international strategy, a multidomestic strategy, a global strategy, and a transnational strategy

Question 56

Firms pursuing a(n)_________________ strategy orient themselves toward achieving maximum local responsiveness.

A) international
B) domestic
C) multidomestic
D) global
E) multinational

Question 57

A(n)_______________ strategy makes sense if a firm has valuable core competencies that indigenous competitors in foreign markets lack,and if the firm faces relatively weak pressures for local responsiveness and cost reductions.

A) international
B) global
C) multidomestic
D) transnational
E) multinational

Question 58

Which of the following is not a factor that is driving pressures for local responsiveness among global firms?

A) Similarities in distribution channels
B) Host government demands
C) Differences in infrastructure
D) Differences in consumer tastes and preferences
E) Differences traditional practices

Question 59

Pressures for _______________ imply that it may not be possible for a firm to realize the full benefits from experience curve and location economies.

A) government approval
B) consumer guidance
C) national recognition
D) local responsiveness
E) local development

Question 60

Firms that pursue a(n)_____________ strategy try to create value by transferring valuable skills and products to foreign markets where indigenous competitors lack those skills and products.

A) multidomestic
B) transnational
C) global
D) international
E) multinational

Question 61

Firms that pursue a(n)_______________ strategy focus on increasing profitability by reaping the cost reductions that come from experience curve effects and location economies.

A) multidomestic
B) multinational
C) international
D) global
E) transnational

Question 62

A lack of local responsiveness,an inability to realize location economies,and a failure to exploit experience curve effects are disadvantages of a(n)_______ strategy.

A) international
B) global
C) transnational
D) multidomestic
E) multinational

Question 63

According to Bartlett and Ghoshal,the _______ strategy is the only viable international strategy.

A) multidomestic
B) international
C) transnational
D) global
E) multinational

Question 64

Firms pursuing a(n)________________ strategy orient themselves towards achieving maximum local responsiveness.

A) international
B) global
C) transnational
D) multidomestic
E) multinational

Question 65

The production,marketing,and R&D activities of firms pursuing a(n)_____________ strategy are concentrated in a few favourable locations.

A) international
B) transnational
C) global
D) multidomestic
E) multinational

Question 66

The work of Christopher Bartlett and Sumantra Ghoshal is associated with:

A) global strategy
B) strategy
C) transnational strategy
D) international strategy
E) multinational strategy

Question 67

Which of the following is not a typical characteristic of multidomestic firms?

A) Extensively customize both their product offerings
B) Try to establish a complete set of value creation activities in each major national market in which they do business
C) Have a low cost structure
D) Do a poor job of leveraging core competencies within the firm
E) Extensively customize their marketing strategy to match different national conditions

Question 68

Which of the following two international strategies are disadvantaged by a lack of local responsiveness?

A) global and international
B) multidomestic and transnational
C) transnational and global
D) multidomestic and international
E) multidomestic and multinational

Question 69

Which of the following two strategies suffer from a failure to exploit experience curve effects?

A) international and transnational
B) multidomestic and international
C) transnational and global
D) global and international
E) multidomestic and multinational

Question 70

According to Christopher Bartlett and Sumantra Ghoshal,the flow of skills and product offerings should not be all one way,from home firm to foreign subsidiary.Rather,they argue that the flow should also be from foreign subsidiary to home country,and from foreign subsidiary to foreign subsidiary-a process they call:

A) adaptive learning effect.
B) international education.
C) international lore.
D) worldwide effect.
E) global learning.

Question 71

_________________ run the range from formal joint ventures to short-term contractual agreements.

A) Cooperative synergies
B) Strategic alliances
C) Franchise organizations
D) Tactical partnerships
E) Partnerships

Question 72

A(n)_____________ strategy makes sense when there are strong pressures for cost reductions and where demands for local responsiveness are minimal.

A) global
B) multidomestic
C) transnational
D) international
E) multinational

Question 73

Which of the following is not an advantage of a strategic alliance?

A) Alliances help facilitate entry into foreign markets
B) Allows a firm to share the fixed costs of developing new products or services with another firm
C) Provides a forum for firms to bring together complementary skills and assets that neither company could easily develop on its own
D) Helps a firm guard its proprietary technology
E) Helps establish technical standards in an industry

Question 74

According to the textbook,which of the following strategies is difficult to implement due to organizational problems?

A) Multinational
B) International
C) Global
D) Multidomestic
E) Transnational

Question 75

Pursuing a(n)_______________ strategy involves a simultaneous focus on reducing costs,transferring skills and products,and being locally responsive.

A) global
B) multidomestic
C) transnational
D) international
E) multinational

Question 76

When cost pressures are low and the pressures for local responsiveness are high a(n)_____________ strategy is the most appropriate.

A) multidomestic
B) global
C) transnational
D) international
E) multinational

Question 77

There are three major advantages that strategic alliances enjoy.These are (1)may facilitate trade into a foreign market,(2)allows firms to share the fixed costs and developing new products or processes,and (3):

A) an alliance is a way to bring together the complementary skills and assets of the participants
B) gives competitors a low cost route to new technology
C) a firm never gives away more than it gains by participating in a strategic alliance
D) give competitors a low cost route to new markets
E) protects the proprietary technology of the partners

Question 78

The term _______________ refers to cooperative agreements between potential or actual competitors.

A) tactical union
B) strategic alliance
C) political affiliation
D) economic association
E) global partnership

Question 79

A weakness of the ________________ strategy is that many of the firms that pursue this strategy have developed into decentralized federations in which each national subsidiary functions in a largely autonomous manner.

A) multinational
B) global
C) international
D) transnational
E) multidomestic

Question 80

Cooperative agreements between potential or actual competitors are called:

A) economic associations
B) tactical unions
C) trade unions
D) strategic alliances
E) partnerships