International Business: The Challenges of Globalization, 9e (Wild)
Chapter 11 International Strategy and Organization
1) ________ is the process of identifying and selecting an organization’s objectives and deciding
how the organization will achieve those objectives.
A) Stratification
B) Planning
C) Economic transition
D) Value chain analysis
2) A ________ is a course of actions taken by managers to help a company meet its objectives.
A) mission statement
B) vision
C) strategy
D) core competency
3) Which of the following clarifies the organization’s purpose, values, and direction?
A) code of ethics
B) SWOT analysis
C) strategic plan
D) mission statement
4) Which of the following is the first stage of the strategy-formulation process?
A) identification of value–creating activities
B) formulation of strategies
C) identification of company mission and goals
D) identification of core competency
5) Which of the following statements is true of objectives?
A) Objectives of individual business units in a company tend to be stated in the most general
terms.
B) Objectives become more precise at the level of individual departments.
C) Objectives at the highest level in an organization tend to be more specific.
D) Objectives at the highest level in an organization are more concrete as they contain numerical
targets.
6) Which term refers to the major objectives that a firm wants to accomplish through pursuing a
specific course of action?
A) tactics
B) value chains
C) strategic goals
D) control frameworks
7) Which of the following statements is true of the environmental forces that affect strategy
formulation?
A) Socialist economic systems normally levy light taxes on business profits.
B) Countries that excessively spend on R&D tend to have lower levels of prosperity.
C) Approval of the host government is almost always necessary for making direct investments.
D) Free-market economies tend to levy high taxes on business profits.
8) Adapting products and their marketing strategies in each of the national markets of a company
to suit local preferences is called a ________ strategy.
A) multinational
B) blue ocean
C) global
D) retrenchment
9) Companies often establish largely independent, self-contained units in each of its national
markets to implement a ________ strategy.
A) retrenchment
B) global
C) multinational
D) blue ocean
10) Which of the following strategies is appropriate for companies in industries where buyer
preferences do not converge across national borders?
A) retrenchment strategy
B) global strategy
C) multidomestic strategy
D) mass customization strategy
11) The main benefit of a multidomestic strategy is that it ________.
A) exploits scale economies in product development and marketing
B) is cost-saving due to product and marketing standardization
C) takes advantage of location economies
D) responds quickly and effectively to emerging buyer preferences
12) What strategy involves adapting products and their marketing strategies to national markets
to suite local preferences?
A) Global strategy
B) Stability strategy
C) Multinational strategy
D) Low cost leadership
13) Which of the following should managers at Beanstalk conduct to identify and distinguish
between the primary and support activities in the organization?
A) fundamental analysis
B) structural analysis
C) value chain analysis
D) technical analysis
14) Strategy is the set of planned actions that managers take to help a company meet its
objectives.
15) All parties ranging from suppliers and employers to consumers who are affected by a
company’s activities are called its stakeholders.
16) Objectives at the highest level in a company are always stated in the most specific terms.
17) Objectives of individual business units in an organization exclusively contain numerical
targets of performance.
18) Core competencies are the special ability of a company that competitors find extremely
difficult or impossible to equal.
19) Core competencies are developed by organizations over long periods of time.
20) Technology development along with business infrastructure, human resource management
and procurement are examples of a support activities in the value chain of an organization.
21) Marketing and sales are examples of a support activities in the value chain of an
organization.
22) Support activities such as, business infrastructure, human resource management, technology
development, and procurement (sourcing) provides the inputs and infrastructure required by the
primary activities, in value–chain analysis.
23) The scope of a corporation’s operations refers to the size of its operations.
24) Differentiate between primary and support activities that create value for a company’s
customers. How can managers determine whether an activity enhances customer value?
25) Explain the differences between a mission statement and a business-level strategy.
26) Which of the following is a special ability of a company that competitors find extremely
difficult to equal?
A) comparative advantage
B) absolute advantage
C) core competency
D) economy of scale
27) ________ is the process of dividing a company’s activities into primary and support activities
and identifying those that create value for customers.
A) Fundamental analysis
B) Technical analysis
C) Structural analysis
D) Value–chain analysis
28) Which of the following is considered as a primary activity in an organization?
A) infrastructure
B) after–sales support and service
C) procurement
D) human resource management
29) According to value-chain analysis, marketing and sales are considered as ________.
A) tertiary activities
B) primary activities
C) support activities
D) core competencies
30) Which of the following is considered as a support activity in an organization?
A) inbound logistics
B) human resource management
C) procurement
D) customer service
31) A ________ strategy typically increases the cost structure for international companies and
forces them to charge higher prices to recover such costs.
A) retrenchment
B) global
C) multidomestic
D) blue ocean
32) A strategy of adapting products and their marketing strategies in each national market to suit
local preferences is referred to as a ________ strategy.
A) global
B) retrenchment
C) multinational
D) blue ocean
33) Companies that produce entire inventories of products or components in one or very few
optimal locations are most likely to follow a ________ strategy.
A) retrenchment
B) global
C) blue ocean
D) multinational
34) Companies that typically design promotional campaigns and advertising strategies at their
headquarters are most likely to follow a ________ strategy.
A) retrenchment
B) global
C) blue ocean
D) multidomestic
35) Global products are most commonly seen in industries where there is ________.
A) little convergence of buyer preference across national borders
B) low pressure to contain costs
C) high demand for customized products
D) significant price competition
36) A ________ strategy can create cost savings due to product and marketing standardization.
A) retrenchment
B) multidomestic
C) blue ocean
D) global
37) The main benefit of a multinational strategy is that it allows companies to ________.
A) closely monitor buyer preferences in each local market
B) save costs due to product and marketing standardization
C) customize its products and services
D) respond effectively to emerging buyer preferences
E) A and D
38) Organic growth refers to an organization’s corporate strategy that relies on growth ________.
A) through mergers and acquisitions
B) based on strategic alliances
C) generated internally
D) achieved from joint ventures
39) A strategy designed to reduce the scale or scope of a corporation’s business is called a
________ strategy.
A) growth
B) differentiation
C) retrenchment
D) stability
40) A retrenchment strategy is designed to ________.
A) encourage growth through joint ventures
B) reduce the scale or scope of a corporation‘s operations
C) focus exclusively on internally generated growth
D) guard against organizational change
41) A company that is closing factories with unused capacity and laying-off workers is most
likely following a ________ strategy.
A) growth
B) retrenchment
C) stability
D) combined
42) A company that is selling unprofitable business units is most likely following a ________
strategy.
A) growth
B) retrenchment
C) stability
D) combined
43) Which of the following strategies is designed to increase the scale or scope of a corporation’s
operations?
A) stability strategy
B) growth strategy
C) retrenchment strategy
D) differentiation strategy
44) Which of the following strategies is used when Ryanair engages in aggressive cost cutting in
order to be Europe’s leading low-cost airline?
A) differentiation strategy
B) focus strategy
C) low–cost leadership strategy
D) retrenchment strategy
45) A business-level strategy in which a company exploits economies of scale is called a
________.
A) differentiation strategy
B) stability strategy
C) low–cost leadership strategy
D) retrenchment strategy
46) Decreasing levels of customer loyalty to an organization’s products is a major disadvantage
of the ________ strategy.
A) blue ocean
B) stability
C) low-cost leadership
D) growth
47) A ________ strategy is one in which a company designs its products to be perceived by
buyers as unique throughout its industry.
A) differentiation
B) stability
C) low–cost leadership
D) retrenchment
48) What strategy is used when Noritake compares the ceramic tableware it makes
(www.noritake.com) from common tableware by emphasizing its superior quality?
A) differentiation strategy
B) stability strategy
C) mass customization strategy
D) retrenchment strategy
49) Which of the following is a characteristic based on which products are typically
differentiated?
A) brand loyalty
B) brand equity
C) product design
D) product cost
50) A ________ strategy is one in which a company emphasizes on serving the needs of a
narrowly defined market segment by being the low-cost leader, differentiating its product, or
both.
A) global
B) focus
C) stability
D) retrenchment
51) A ________ strategy often means designing products and promotions aimed at consumers
who are either dissatisfied with existing choices or who want something distinctive.
A) global
B) stability
C) low-cost leadership
D) focus
52) A(n) ________ strategy deals with the primary and supports activities in an organization that
create value for customers.
A) business-level
B) department–level
C) corporate–level
D) international
53) Which of the following is a primary activity that creates value for Beanstalk’s customers?
A) firm infrastructure
B) procurement
C) human resource management
D) inbound logistics
54) Which of the following is a support activity that creates value for Beanstalk’s customers?
A) production
B) marketing and sales
C) customer service
D) technology development
55) The strategy that Beanstalk would most likely want to follow is called a ________ strategy.
A) multinational
B) retrenchment
C) global
D) stability
56) TeleToys recently opened eighteen new toy stores in Brazil. This move can best be described
as a ________ strategy.
A) growth
B) stability
C) retrenchment
D) differentiation
57) The closing of TeleToys’ Australian men‘s clothing line can best be described as a(n)
________ strategy.
A) organic growth
B) stability
C) retrenchment
D) global
58) Free-market economies tend to levy high taxes on business profits whereas socialist
economic systems normally levy lighter taxes.
59) A multinational strategy should allow a company to charge higher prices and/or gain market
share.
60) A global strategy entails having a separate strategy for each nation in which a company
markets its products.
61) A multinational strategy is best suited to industries in which price competitiveness is a key
success factor.
62) The main benefit of a multinational strategy is that it allows companies to monitor buyer
preferences closely in each local market.
63) A global strategy does not allow a company to modify its products except for the most
superficial features.
64) A growth strategy is designed to reduce the scale or scope of a corporation’s operations.
65) A joint venture is an example of a growth strategy of an organization.
66) Corporations that reduce the scale of their operations by laying off managers and salespeople
in national markets that are not generating adequate sales revenue are using a stability strategy.
67) The purpose of a combination strategy is to mix growth, retrenchment, and stability
strategies across a corporation’s business units.
68) A low-cost leadership strategy typically requires a company to have a large market share.
69) Companies that pursue the low-cost leadership position also try to contain administrative
costs and the costs of activities, including marketing, advertising, and distribution.
70) A differentiation strategy is often implemented when a company wants to exploit economies
of scale to have the lowest cost structure.
71) A focus strategy works best with mass-marketed products aimed at price–sensitive buyers.
72) Decentralized decision making concentrates decision making at a high organizational level in
one location, such as at headquarters.
73) Briefly describe the strategy formulation process of international organizations.