Chapter 7: Strategic Planning
TRUE/FALSE
1. Global marketing can be seen as a culmination of a process of international market entry and
expansion.
2. Avoiding cost inefficiencies is a powerful globalization driver.
3. A single-country approach is large enough for the local business to achieve all possible economies of
scale.
4. Mini-nationals are consortiums of companies that act as a lobbying force for global issues.
5. The new-generation global players solve customers’ problems by pushing standardized solutions on
them.
6. In practice, strategic business units represent groupings organized around market similarities based on
the product or service used to meet the needs of specific customers.
7. A focus strategy is defined by its emphasis on several industrial segments.
8. In pursuing cost leadership, the global marketer offers an identical or better product at a higher cost
than the competition.
9. Total quality management measures are allowing marketers to customize an increasing amount of their
production while saving on costs.
10. A global strategy implies that a company should serve the entire globe.
11. When the cost of market share points in any one market becomes too high, marketers tend to begin
looking for diversification opportunities.
12. Segmentation considers the political boundaries that define markets.
13. Globalization is the same as standardization except in the case of the technology used to produce the
product.
14. Globalization strives to reduce costs by exploiting factor costs or capabilities within a system.
15. The quest for cost savings has allowed some marketers to have customer service activities present in
all country markets.
16. Cross-subsidization is the use of resources accumulated in one part of the world to fight a competitive
battle in another.
17. Globalization requires transfer of information typically between headquarters and country
organizations, not the country organizations themselves.
18. Executing global account management programs allows for the development of internal systems and
interaction.
19. The pressure to be global and local at the same time has to be addressed through developing talent.
20. A dodger upgrades capabilities to match globals in niches.
MULTIPLE CHOICE
1. _____ refers to balancing global, regional, and local interests.
a.
Global leverage
b.
Global account management
c.
Concentration
d.
Cross-subsidization
2. Which of the following are two of the most powerful globalization drivers?
a.
Concentrating investments in national markets and focusing on economies of scale
b.
Restricting entry to geographically close markets and pushing standardized solutions on
customers
c.
Centralizing all operations of R&D and providing additional funds for research
d.
Avoiding cost inefficiencies and duplication of effort
3. Which of the following is true about government barriers to international marketing?
a.
Global companies support governmental decisions to implement barriers on domestic
marketing.
b.
Government barriers have been implemented to discourage international marketing and
concentrate only on domestic marketing.
c.
Physical, fiscal, and technical barriers are the same globally and apply to all companies.
d.
Barriers have fallen dramatically in the last years to further facilitate the globalization of
markets.
4. Which of the following is true about technology and international marketing?
a.
Newly emerging markets cannot leverage advanced communications as they are unable to
leapfrog stages of economic development.
b.
Technological evolution is contributing on a rapid scale to the changes taking place in
international marketing.
c.
E-business has not taken hold in international marketing.
d.
Global companies prefer conducting business the traditional way, without the use of
teleconferencing or videoconferencing.
5. Which of the following is true about “born globals”?
a.
They build their presence in every country.
b.
They discourage customer involvement in solving customer problems.
c.
They solve customers’ problems by pushing standardized solutions on them.
d.
They take ideas from wherever they can be found and solutions to wherever they are
needed.
6. _____ refers to the capability of attracting and influencing all stakeholders, whether through energetic
brands, heroic missions, distinctive talent development, or an inspirational corporate culture.
a.
Cross-subsidization
b.
Brand awareness
c.
Soft power
d.
Segmentation
7. The use of scale, financial might, or the use of a low-cost position to win market access and share
refers to _____.
a.
cross-subsidization
b.
cost inefficiencies
c.
standardization
d.
hard power
8. During the _____ analysis stage of strategic planning, the company takes a look at its own
organizational resources to determine if it can establish and sustain competitive advantage within
global markets.
a.
competitive
b.
market
c.
internal
d.
external
9. Which of the following is NOT one of the three choices of competitive strategies that the marketing
manager has at his/her disposal?
a.
Target positioning
b.
Cost leadership
c.
Differentiation
d.
Focus
10. Which of the following is true of a focus strategy?
a.
It is oriented toward either low cost or differentiation.
b.
It is either industry-wide or focused on a single segment.
c.
It offers an identical product at a lower cost than the competition.
d.
It has a broad target scope.
11. What is the first step in the formulation of a global strategy?
a.
The location and extent of value-adding activities
b.
The choice of competitive strategy to be employed
c.
The resource allocation strategy to be adopted for various markets
d.
The choice of country markets to be entered
12. _____ takes advantage of the marketer’s real or perceived uniqueness in elements such as design or
after-sales services.
a.
Standardization
b.
Cross-subsidization
c.
Diversification
d.
Differentiation
13. Which of the following statements is true about the choice of competitive strategy?
a.
In pursuing cost leadership, the global marketer offers an identical or better product at a
higher cost than the competition.
b.
Most global marketers combine high differentiation with high costs to expand their market
shares.
c.
Marketers who opt for high differentiation can ignore the monitoring of costs.
d.
Global activities will in themselves permit the exploitation of scale economies not only in
production but also in marketing activities.
14. Markets in the _____ position will require continued commitment by management in research and
development, investment in facilities, and the training of personnel at the country level.
a.
harvest/divest
b.
divest/reject
c.
invest/grow
d.
dominate/divest
15. _____ refers to a marketer’s decision to focus its resources on a smaller number of markets as opposed
to a broad number of markets.
a.
Concentration
b.
Differentiation
c.
Diversification
d.
Cross-subsidization
16. _____ refers to a company’s decision to expand its portfolio by developing a strategy characterized by
growth in a relatively large number of markets.
a.
Concentration
b.
Differentiation
c.
Cross-subsidization
d.
Diversification
17. The recognition that groups within markets differ sufficiently enough to warrant individual marketing
mixes is known as _____.
a.
targeting
b.
positioning
c.
diversification
d.
segmentation
18. The _____ approach seeks uniformity, especially in elements that are strategic in nature, and also takes
care to localize necessary tactical elements.
a.
globalization
b.
segmentation
c.
glocalization
d.
positioning
19. One of the goals of globalization is to reduce costs by _____.
a.
charging a lot more for product sold
b.
using price skimming techniques of increasing prices for brand name merchandise
c.
dumping surplus in receptive markets
d.
pooling production or exploiting factor costs or capabilities within a system
20. One of the benefits for international marketers that have been able to globalize is that, customer
service is _____.
a.
concentrated and not dispersed in all country markets
b.
not required because customers do not need service
c.
standardized by the government under customer service requirements
d.
subsidized by customer service activities in the U.S.
21. _____ refers to a company’s use of resources accumulated in one part of the world to fight a
competitive battle in another.
a.
Hard power
b.
Diversification
c.
Soft power
d.
Cross-subsidization
22. Which of the following is a pitfall that handicaps global marketing programs and contributes to their
suboptimal performance?
a.
Excessive cross-subsidization
b.
Vertical integration
c.
Overstandardization
d.
Adaptation
23. The NIH syndrome refers to _____.
a.
leveraging of local assets in segments where globals are weak
b.
the upgradation of local branches to match globals in niches
c.
resistance by local branches if adoption of the planning process is forced on them by
headquarters
d.
the sale of the local branch to a global player or forming an alliance
24. Giving midlevel managers more experience in working with others of different nationalities to expose
them to other markets and surroundings is known as _____.
a.
repatriation
b.
existential migration
c.
immigration
d.
personnel interchange
25. _____ calls for the centralization of decision-making authority far beyond that of the multidomestic
approach.
a.
Cross-subsidization
b.
The NIH syndrome
c.
Globalization
d.
Localization
26. Which of the following is an approach that can be used against the emergence of the NIH syndrome?
a.
Maintaining a product portfolio that exclusively supports specific local brands
b.
Allowing global managers control over local marketing budgets
c.
Ensuring that global managers participate in the development of marketing strategies and
programs for local brands
d.
Encouraging local managers to generate ideas for possible regional or global use
27. Which of the following statements about the emergence of organizational structures to support
globalization effort is true?
a.
The matrix organization structure of global companies is focused on customers.
b.
Global product managers develop short-term strategies for product categories.
c.
Due to the intricate nature of global marketing, all marketers use the country–by-country
approach.
d.
Global product managers develop strategies for product categories using the
country-by-country approach.
28. Why are marketers extending national account management programs across countries typically for the
most important customers?
a.
To deal with the globalization of customers
b.
To maintain a product portfolio that includes only local/regional brands
c.
To serve and give importance to customers of a particular region than to the others
d.
To allow local managers control over their marketing budgets so that they can respond
exclusively to local customer needs
29. Executing _____ programs not only builds relationships with important customers but also allows for
the development of internal systems and interaction.
a.
cross-subsidization
b.
locally centralized marketing
c.
NIH
d.
global account management
30. A local company that has assets that give it a competitive advantage only in its home market is known
as a(n) _____.
a.
defender
b.
dodger
c.
contender
d.
extender
31. Which of the following is true of a dodger?
a.
It upgrades capabilities to match globals in niches.
b.
It sells out to a global player or becomes part of an alliance.
c.
It expands into markets similar to home base.
d.
It leverages local assets in segments where globals are weak.
32. Nature-Care Inc., a Canadian-based cosmetics company, was under fierce competition from other
cosmetics companies in Canada. The company came up with several strategies to increase profits, but
they were still under severe losses. Finally, the company was sold to Trendy-Beauty Inc., a leading
cosmetics company with branches all over the world. Which of the following competitive strategies
did Nature-Care adopt?
a.
Contender
b.
Dodger
c.
Extender
d.
Defender
33. _____ are able to exploit their success at home as a platform for expansion elsewhere.
a.
Dodgers
b.
Extenders
c.
Defenders
d.
Contenders
34. When Terminal Inc., a global heavy-duty vehicle manufacturer, could not cope up with the increasing
demand, Next-Engines Inc. seized the opportunity and supplied their heavy-duty vehicles at prices
lower than Terminal’s. Next–Engines’ lower labor costs and extensive R&D facilities allow it to keep
its prices lower than Terminal’s. Which of the following competitive strategies did Next-Engines
adopt?
a.
Dodger
b.
Extender
c.
Defender
d.
Contender
35. Yummy Snacks Inc., a leading snack manufacturer in Mexico, has all its snacks catering to local taste
buds. It has recently expanded their presence in the U.S. and other countries, especially at places with
sizable Mexican communities. What is the competitive strategy adopted by Yummy Snacks?
a.
Contenders
b.
Defenders
c.
Dodgers
d.
Extenders
ESSAY
1. Why is standardization not the answer for companies wishing to go global?
ANS:
2. Discuss the environmental factors that favor the development of strategy and resource allocation on a
global basis with an example.
3. Explain the not-invented-here (NIH) syndrome and the approaches used to counter its emergence.
ANS:
