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9-1
Module 09 International Competitive Strategy Answer Key
True / False Questions
1.
The objective of scenario building is to force executives to question their assumptions
about the environments in which the company operates and incorporate into their planning
the uncertainties that might profoundly affect their strategic and operational performance
around the world.
2.
Scenarios are forecasts that extrapolate from past data to make predictions.
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3.
International strategy helps firms to make choices about how to deploy scarce resources
to achieve their international objectives.
4.
To creative a sustainable competitive advantage, an international company should try to
develop competencies that are valuable, rare, difficult to imitate, and readily
substitutable.
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5.
Strategic plans promote consistency of action among the firm's managers worldwide and
encourage them to consider the ramifications of their actions in the firm's other
geographic and functional areas.
6.
The ultimate managers of strategic planning and strategy making are the executive board
of a corporation.
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7.
The first step in the process of strategic planning is to define the company's business and
mission.
8.
According to a study by McKinsey & Company, most executives worldwide agree that
environmental, social, and business trends represent critical challenges for company
strategy and performance.
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9.
Value chain analysis 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.
10.
Companies have the potential to achieve competitive advantages through leveraging their
organizational knowledge across national boundaries.
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11.
Knowledge that an individual has but that is difficult to express clearly in words, pictures,
or formulas, and therefore difficult to transmit to others, is called explicit knowledge.
12.
A broad statement that defines the purpose for a company's existence is the mission
statement.
13.
Objectives direct the firm's course of action, maintain it within the boundaries of the
stated mission, and ensure its continuing existence.
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14.
Objectives must be quantified in order to be useful.
15.
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.
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16.
Companies pursuing a home replication strategy typically centralize product development
functions in their home country and then transfer innovations to foreign markets to
capture additional value.
17.
A multidomestic strategy tends to be used when a company confronts pressures for local
adaptation rather than cost-effectiveness.
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18.
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.
19.
Because large multinationals generate an average of nearly half of their revenues within
their home region, some researchers have suggested that a regional strategy perspective
is more appropriate than a global perspective.
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20.
Historically, more aspects of marketing have been standardized and coordinated
worldwide by companies than has been the case for other value chain activities such as
research and development and manufacturing.
21.
Scenarios are multiple, plausible stories for probable futures.
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22.
Scenarios are a particularly useful approach for international companies that face high
levels of change and uncertainty, because they allow management to anticipate and
prepare for opportunities and threats by predicting and controlling for these
developments.
23.
Contingency plans are developed in some firms for the best- and worst-case scenarios
and for critical events.
24.
Tactical plans are more detailed than strategic plans.
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25.
Two prominent features of the strategic plan are sales forecasts and the mission
statement.
26.
Policies are broad guidelines issued by upper management for the purpose of assisting
lower-level managers in handling unique new problems.
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27.
Procedures are broad guidelines issued by upper management for the purpose of assisting
lower-level managers in handling nonrecurring problems.
28.
An advantage of bottom-up planning is that the people responsible for attaining the goals
are formulating them.
29.
Repetition of the bottom-up or top-down planning process until all differences are
reconciled is sequential planning.
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30.
There is a growing tendency for firms to use strategic planners to devise the corporate
plan, which is then handed to operations people for execution.
Multiple Choice Questions
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31.
Which of the following is incorrect about scenario analyses?
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32.
Which of the following is correct about scenario analyses?
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33.
Which of the following is correct about scenario analyses?
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34.
International strategy
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35.
All of the following are correct about international strategy except:
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36.
To be effective, a company's international strategy
