Chapter 12
International Competitive Strategy
True / False Questions
1. International strategy helps firms to make choices
about how to deploy scarce resources in order to achieve their international
objectives.
True False
2. The basic concept behind strategic planning is to
help ensure that managers have a sound understanding of the business, the
strategy, the assumptions behind the strategy, the external business
environment pressures, and the company’s strengths and weaknesses.
True False
3. International strategy involves decisions that deal
with a single area, such as marketing or production.
True False
4. The goal of international strategy is to achieve
and maintain a unique and valuable competitive position both within a nation
and globally, a position that has been termed comparative advantage.
True False
5. Global strategic plans help to ensure that decision
makers have a common understanding of the business and to think through the
impact of their decisions and actions firm-wide.
True False
6. The process of strategic planning is best
determined locally.
True False
7. The first step in the process of strategic planning
is to define the company’s business and mission.
True False
8. Before analyzing corporate controllable variables,
the planning committee must answer questions such as, “What are our
strengths and weaknesses?”
True False
9. An analysis of the forces controlled by the firm
will include a situational analysis and control analysis.
True False
10. Value chain analysis focuses primarily on the
question, “What value does the company want to deliver to these
customers?”
True False
11. Companies have the potential to achieve
competitive advantages through leveraging their organizational knowledge across
national boundaries.
True False
12. After setting corporate objectives, the company
management must define the company’s vision and mission.
True False
13. Objectives must be quantified in order to be
useful.
True False
14. When developing and assessing strategic
alternatives, it is important to remember that companies competing in
international markets confront two opposing forces: reduction of costs and
adaptation to local markets.
True False
15. With a multidomestic strategy, the cost and
complexity of coordinating a range of different strategies and product
offerings across national and regional markets can be substantial.
True False
16. A multidomestic strategy tends to be used when a
company simultaneously confronts pressures for cost effectiveness and local
adaptation.
True False
17. A global strategy tends to be used when a company
faces strong pressures for reducing costs and limited pressure to adapt
products for local markets.
True False
18. A benefit of global strategies is their ability to
adjust quickly and effectively to changes in customer needs across national or
regional markets.
True False
19. When choosing among strategies, management must
consider corporate culture.
True False
20. Scenario analysis can help managers to break away
from their existing view of the world and envision alternatives that might lie
outside their traditional frame of reference.
True False
21. Scenarios are a particularly useful approach for
international companies that face high levels of change and uncertainty,
because it allows management anticipate and prepare for opportunities and
threats by predicting and controlling for these developments.
True False
22. Contingency plans are developed in some firms for
the best and worst case scenarios and for critical events.
True False
23. Because of the rapidity of changes in the
uncontrollable variables, many managers have turned to contingency plans, which
are multiple, plausible stories for probable futures.
True False
24. Tactical/operational plans are more detailed than
strategic plans.
True False
25. Two prominent features of the strategic plan are
sales forecasts and the mission statement.
True False
26. Sales forecasts are both a control and planning
technique.
True False
27. Policies are broad guidelines issued by upper
management for the purpose of assisting lower-level managers in handling
recurring problems.
True False
28. Procedures are broad guidelines issued by upper
management for the purpose of assisting lower-level managers in handling
non-recurring problems.
True False
29. At the corporate level, strategies, like
objectives, may be rather general.
True False
30. An advantage of bottom-up planning is that the
people responsible for attaining the goals are formulating them.
True False
31. Strategic planning processes are something that
only the company’s most senior executives are involved with.
True False
32. There is a growing tendency for firms to use
strategic planners to make the corporate plan which is then handed to
operations people to implement.
True False
33. Computers enable company planners to provide
management with much needed precise plans having greater detail over an
increased time span.
True False
34. According to the text, the biggest single problem
in international planning is the lack of efficient and good competitive
information.
True False
35. Present-day competitor analysis reflects top
management’s recognition that a more focused knowledge of competitors’
activities is required.
True False
36. Contemporary strategic planning approaches should
attempt to extrapolate historical conditions in order to prepare effective
scenarios.
True False
37. According to the text, businesspeople have a
responsibility to use any and all possible means to gather information about
their competitors.
True False
38. The methods most widely used for acquiring
sensitive information on a competitor’s technologies may include interviewing
and hiring former employees.
True False
39. Benchmarking is a technique for measuring a firm’s
performance against the performance of others in the same industry.
True False
40. The three basic types of benchmarking include
internal, external, and generic.
True False
Multiple
Choice Questions
41. To fully understand why, how, and where they
intend to do business, now and over time, managers must have:
A. a clear understanding of the company’s mission.
B. a vision for how they intend to achieve the company’s mission.
C. an understanding of how the company plans to compete with other
companies.
D. all of the above.
42. International strategy:
A. needs to be consistent among the various functions, products, and
regional units of the company.
B. needs to be consistent with the demands of the international
competitive environment.
C. is concerned with the way firms make fundamental choices about
developing and deploying scarce resources internationally.
D. has a goal of achieving and maintaining competitive advantage.
E. all of the above.
43. 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.
B. are difficult to imitate or substitute for.
C. are expensive to develop and maintain.
D. All of the above.
E. Both A and B.
44. International firms have found it necessary to
institute formal global planning:
A. to eliminate the practice of informal planning.
B. to provide top management with a means to identify threats and
opportunities worldwide.
C. to provide consistency of action among the firm’s managers.
D. B and C.
E. A, B, and C.
45. According to the text, the firm’s manager of
strategic planning is the:
A. vice president for planning.
B. chief operating officer.
C. firm’s chief executive officer.
D. director of strategic planning department.
46. According to the text, strategic planners
will:
A. analyze the company’s external and internal environments.
B. define the company’s business and mission.
C. set objectives, quantify goals, formulate strategic and tactical plans.
D. all of the above.
E. A and C.
47. In analyzing the corporate controllable variables,
management must address the question:
A. who are the company’s target customers.
B. what will be the costs that the company will incur in delivering value
to its target customers.
C. how much will the company be able to charge for the value it creates
for its target customers.
D. all of the above.
48. To set corporate objectives, management must
first:
A. select a viable market segment.
B. quantify them.
C. define the firm’s mission.
D. research the market.
49. Most top managers:
A. prefer non-quantifiable, directional goals.
B. prefer non-quantifiable, but verifiable goals.
C. prefer verifiable objectives.
D. have no preference as to quantifiable and non-quantifiable goals.
50. When there is strong pressure for a company to
adapt its products or services for local markets, it should tend to use
a:
A. global strategy
B. multidomestic strategy
C. transnational strategy
D. differentiation strategy
51. 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
B. multidomestic strategy
C. transnational strategy
D. differentiation strategy
52. Scenarios assist managers:
A. in becoming aware of the critical elements of the external forces.
B. in preparing contingency plans.
C. in preparing budgets.
D. A and B.
53. Scenario planning:
A. has an objective of envisioning possible futures in a more realistic
light.
B. is based on stories about possible futures that are presented to line
managers by the strategic planners.
C. extrapolates from past data to make predictions.
D. all of the above.
54. Tactical plans
A. are operational plans.
B. are broad, operational plans on which strategic plans are based.
C. are specific and short-term compared to strategic plans.
D. A and C.
55. Tactical plans
A. are fairly broad compared to strategic plans.
B. spell out in detail how objectives will be reached.
C. are broad guidelines to assist in handling recurring problems.
D. are less specific than strategic plans.
56. A strategic plan:
A. will be prepared when the tactical plan is finalized.
B. describes how the firm’s goals will be met.
C. contains sales forecasts and budgets.
D. B and C.
57. Policies:
A. prescribe how certain activities will be carried out.
B. are broad guidelines used to assist lower level managers to handle
recurring problems.
C. assure that all budgets will be prepared using the same format.
D. A and C.
58. Performance measures are done to:
A. measure the time the company takes to acculturate new employees.
B. determine if the strategy and its implementation are proceeding
successfully.
C. assess assumptions about how the strategic lists affect the business.
D. All of the above.
E. both A and C.
59. At the corporate level, strategic plans
A. must be specific to provide guidance at lower levels.
B. may, like objectives, be rather general.
C. must be quantified so that they can be controlled.
D. none of the above.
60. The planning method that is becoming more popular
is:
A. top down.
B. bottom up.
C. a combination of top down and bottom up.
D. centralized planning.
61. In the new strategic planning process:
A. top management is assigning strategic planning to teams of line and
staff managers from the same business.
B. interaction with important customers and suppliers should be included.
C. governments and other stakeholder activities should be direct
participants.
D. all of the above
E. A and C only
62. The new directions in planning:
A. have made strategic planners dominant in the planning process.
B. have brought operating managers into the planning process.
C. have relieved the firm’s chief executive officer of the responsibility
for strategic planning.
D. have made the use of computers and professional planners essential for
the planning process.
63. According to the text, changes in the way
corporate planning is done:
A. include a greater attention being paid to less quantifiable
sociopolitical developments.
B. include the use of advanced computing techniques to make detailed five
year forecasts.
C. include heavy emphasis on the use of variables that can be quantified.
D. all of the above are correct.
64. In planning, there has recently been a decided
move among many firms:
A. to use advanced statistical techniques to help produce voluminous and
detailed strategic plans.
B. toward a less-structured format and a shorter plan.
C. to concentrate on factors which can be easily quantified.
D. to make detailed forecasts and project them out at least five years.
65. Frederick Gluck, management consultant, says for
firms to develop the flexibility to compete, managements must make the
following changes in their planning methods:
A. top management must dedicate more time to deciding how things ought to
be done.
B. the nature of planning must change from being an exercise in
forecasting to an exercise in creativity.
C. strategic planning must be restored to strategic planning departments.
D. A and B.
66. The biggest problem in international planning
is:
A. the lack of efficient and good competitive information.
B. the lack of national industrial plans.
C. widely fluctuating interest rates.
D. widely fluctuating exchange rates.
E. C and D.
67. Competitor assessment:
A. is a relatively new management technique.
B. is not a relatively new management technique.
C. requires consultants specialized in competitor analysis.
D. requires scanning of technical journals and electronic databases.
E. Both A and B.
68. What is different about present-day competitor
analysis and information gathering about the competition than what has
previously been conducted? Top management’s recognition that:
A. increased competition has created a need for a broad, and more in-depth
knowledge of competitors.
B. their firm should have a competitor intelligence system (CIS).
C. Sales representatives talk to competitors’ customers and distributors.
D. All of the above.
E. Both A and B.
69. The theft of trade secrets:
A. is a new concern for businesses.
B. mainly affects large companies.
C. is becoming increasingly a concern, especially as companies are
becoming more physically distributed.
D. all of the above.
70. A technique for measuring a firm’s performance
against the performance of others is:
A. competitor analysis.
B. environmental analysis.
C. benchmarking.
D. industrial analysis.
E. Both A and B
Essay Questions
71. What international strategy is and why it is
important?
72. Discuss the global strategic planning
process.
73. Explain the purpose of mission statement, vision
statement, values statements, and objectives.
74. Compare and contrast global, multidomestic, and
transnational strategies.
75. What are scenarios and why are they used in international
strategic planning?
76. Discuss the three methods of planning including
the advantages and disadvantages of each. According to the text, what method is
generally employed and why?
77. Discuss how new directions in strategic planning
process differ from the old process.
78. What is industrial espionage and what methods are
available to help firms protect themselves against it?
79. What is competitor assessment and what are common
elements of a well-designed competitor intelligence system?
80. Discuss the three stages involved in benchmarking
and describe the four basic types of benchmarking.
Fill
in the Blank Questions
81. __________ ___________________ is concerned with the
way firms make fundamental choices about developing and deploying scarce
resources internationally.
________________________________________
82. __________ __________ is the ability of a company
to have higher rates of profits than its competitors.
________________________________________
83. __________ are skills or abilities required in
order to adequately complete a task.
________________________________________
84. __________ __________ is 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.
________________________________________
85. __________ __________ __________ is 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.
________________________________________
86. In today’s highly competitive, rapidly changing,
and knowledge-intensive economy, companies have the potential to achieve
competitive advantages through leveraging their ______________ across national
boundaries.
________________________________________
87. 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 called ______________ knowledge.
________________________________________
88. A broad statement that defines the organization’s
scope is the __________ __________.
________________________________________
89. __________ direct the firm’s course of action,
maintain it within the boundaries of the stated mission, and ensure its
continuing existence.
________________________________________
90. When there is strong pressure for the company to
adapt its products or services for local market, a company tends to use a
______________ strategy.
________________________________________
91. Strategy and decision making are typically
centralized at headquarters, and the company tends to offer standardized
products and services, when a company is pursuing a _________ strategy.
________________________________________
92. A _______ strategy tends to be used when a company
simultaneously confronts pressures for cost effectiveness and local adaptation,
and when there is a potential for competitive advantage from simultaneously
responding to these two divergent forces.
________________________________________
93. _____________ are multiple, plausible stories for
probable futures.
________________________________________
94. Plans for the best- or worst-case scenarios are
__________ plans.
________________________________________
95. Two prominent features of the strategic plan are
sales forecasts and __________.
________________________________________
96. The planning process that begins at the highest
level in the organization and continues downward is _________-__________
planning.
________________________________________
97. The planning process that begins at the lowest
level in the organization and continues upward is __________-__________
planning.
________________________________________
98. Repetition of the bottom-up or top-down planning
process until all differences are reconciled is __________ planning.
________________________________________
99. According to Frederick W. Gluck, _______ _______
must assume a more explicit strategic decision making role in strategic
planning, dedicating a large amount of time to deciding how things ought to be
instead of listening to analyses of how they are.
________________________________________
100. ___________ ______________________ involves
spying on a competitor to learn secrets about its strategy and operations.
________________________________________
101. In ___________ ______________, principal
competitors are identified, and their objectives, strengths, weaknesses, and
product lines are assessed.
________________________________________
102. A _____________ ____________ ______________ is a
procedure for gathering, analyzing, and disseminating information about a
firm’s competitors.
________________________________________
103. Sources of information about a firm’s competitors
include within the firm, published materials, suppliers and customers, and
____________ ______________.
________________________________________
104. _______________ is a technique for measuring a
firm’s performance against the performance of others that may be in the same or
a completely different industry.
________________________________________
105. The four basic types of benchmarking are
__________, ____________, ___________, and _________.
________________________________________
