Chapter 9 - International Competitive Strategy
Answers to End of Chapter Questions
1. What is international strategy, and why is it important?
International strategy is concerned with the way firms make fundamental choices about developing
2. What is the difference between strategic planning conducted in domestic companies and that
conducted in international companies?
3. Suppose that competitor analysis reveals that the American subsidiary of your firm’s German
competitor is about to broaden its product mix in the American market by introducing a new
line against which your company has not previously had to compete in the home market. The
environmental analysis shows that recent weakness in the dollar-euro exchange rate is expected
to continue, making American exports relatively less expensive in Germany. Do you recommend
a defensive strategy, or do you attack your competitor in its home market? How will you
implement your strategy?
Probably, your company will want to step up its activity in the home market of your German
competitor to distract its attention somewhat from the American market. You will be sending signals
4. You are the CEO of the Mesozoic Petrochemical Company and have just finished studying
next year’s plans of your foreign subsidiaries. You are pleased that the African regional unit’s
plan is so optimistic because that subsidiary contributes heavily to your company’s income. But
OPEC is meeting next month. Should you ask your planning committee, which meets tomorrow,
to construct some scenarios? If so, about what?
You had better construct a scenario about what OPEC might do with respect to supplying crude to
5. Your firm has used bottom-up planning for years, but the subsidiaries’ plans differ with
respect to approaches to goals and assumptions—even the time frames are different. How can
you, the CEO, get them to agree on these points and still get their individual input?
This is a situation for iterative planning. Give them some broad goals and time frames from