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The process by which afirm's managers evaluate the future prospects of the firm and decide onappropriate strategies to achieve long-term objectives is called ________.
A) strategic planning
D) product planning
Which of thefollowing terms refers to the basic means by which a company competes?
A company's choice to operate in a business or businesses and the ways in whichit differentiates itself from its competitors is called its ________.
Which of the followingis the most common reactive reason for a firm to extend its operationsoverseas?
B) economies ofstrategic planning scale
C)globalization of competitors
D)resource access and cost savings
switch from exporting tooverseas manufacturing
Restrictive tradebarriers most likely influence the globalization of businesses by encouragingfirms to ________.
A)develop joint ventures with local firms
B) import supplies fromforeign vendors
C)expand the exportation of raw materials
D) switch from exportingto overseas manufacturing
Roch,a Swiss chocolate company, recently opened a manufacturing unit in Spain. Thepurpose of this move was that Roch wanted to avoid Spain's high import tariffs.Which of the following reasons prompted Roch to open the manufacturing unit inSpain?
C)globalization of competitors
the firm searches for less restrictive operating environments overseas
Which of the following is the most likely result of regulations andrestrictions enforced by a firm's home government that prove to be expensivefor the firm's operations?
A)the firm searches for less restrictive operating environments overseas
B)the firm responds to customers' demands more promptly
C)the firm becomes entangled in lengthy litigation
D)the firm expands its domestic operations
Dueto the high demand for its handmade soaps in Canada, Fragrance Exotica, anIndian Soap manufacturer, has decided to open a new manufacturing unit inCanada, thereby expanding overseas. In this scenario, which of the followingreasons prompted Fragrance Exotica to set up a manufacturing unit overseas?
Which of the followingis the proactive reason that prompts firms to expand overseas?
A) avoiding restrictivetrade barriers
B) solvinglogistics-related problems
C) responding to foreigncompetition
D) seeking economies ofscale
Which of the followingis a reactive reason that prompts a firm to expand overseas?
A) customer demands
B)seeking economies of scale
D) seeking incentives
A country seeks new infusions of capital, technology, and know-how. Itannounces that it shall exempt taxes and grant concessions for foreigninvestors. Which of the following measures is the country employing?
C)establishing trade barriers
D)ensuring economies of scale
When Disney decided tobuild a park in Paris, the French government gave Disney prime farmland justoutside the city limits. This is most likely an example of a firm expandingoverseas due to ________.
A) globalization ofcompetitors
B) restrictive tradebarriers
C)home country regulations
D)provision of incentives
Which of the followingstatements is true of the strategic formulation process?
A)The global strategic formulation process is completely independent of theprocess followed in domestic companies.
B)The strategic formulation process is part of the strategic management processin which most firms engage, either formally or informally.
C)Strategic formulation consists of four defined stages that occur in aconsecutive order.
D)Most firms operate on planning cycles of one or two years with periodicstrategy reviews.
Jamiedecides to plan his strategies for starting an electric equipment manufacturingcompany. His main aim is to ensure that it runs efficiently. He decides to dothis in two phases: the planning phase and the implementation phase. Which ofthe following processes is Jamie employing?
Which of the followingis the first step of the planning phase of a strategic management process?
A)assessment of the external environment that the firm will face in the future
B)establishment of the company's mission
C)analysis of the firm's relative capabilities to deal successfully with theexternal environment
D)seeking alternative strategies using competitive analysis
Thesecond part of the strategic management process involves the ________.
Which of the followingwould most likely be categorized as a global financial objective of aninternational firm?
B) long-term profitgrowth
C)quality and cost control
D) company market share
Which of the followingcharts the direction of the company and provides a basis for strategic decisionmaking?
B) corporate structure
D) SWOT analysis
Goals for market volumeand profitability are usually set higher for international than domesticoperations due to the ________.
A) involvement ofgreater risks
B) presence of stablemarket conditions
C)enforcement of government controls
D) presence of stableexchange rates
________includes environmental scanning and continuous monitoring to keep abreast ofvariables around the world that are pertinent to the firm.
Which of the followingterms refers to the continuous process of gathering and evaluating informationabout variables and events around the world that may pose threats or opportunitiesto the firm?
A)business process reengineering
B) PEST analysis
D) fundamental analysis
economicand financial risk
Whichof the following is a global risk with regard to strategic entry scanning?
A)economic and fiscal policies
C)economic and financial risk
Whichof the following is a regional risk with regard to strategic entry scanning?
A)financial and currency instability
B)varying fiscal strategies
D)shifting production and consumption
Whichof the following is a national risk with regard to strategic entry scanning?
A)energy availability and prices
Theprocess of gathering information and forecasting relevant trends, competitiveactions, and circumstances that will affect operations in geographic areas ofpotential interest is called ________.
At which three levelsshould firms ideally perform global environmental analysis?
A) product, domesticmarket, and consumer
B) multinational,regional, and local
C) operational,tactical, and top management
D) innovation,production, and local distribution
The first broad scan ofall potential world markets should result in the firm being able to ________.
A) identify thestrengths and weaknesses of its competitors
B) eliminate marketswith unreasonable entry conditions
C) determine the bestsources for raw materials
D) eliminate countrieswith high cultural risk
Whichof the following is a way in which formal institutions affect internationalcompetition?
A)decreasing trade restrictions
B)enforcing organizational laws
C)enforcing antidumping laws
D)enforcing strict exit barriers
Whichof the following is the most preferred source of environmental information forenvironmental scanning purposes in a firm?
B)corporate clipping service
A(n)________ determines which areas of a firm's operations represent strengths orweaknesses (currently or potentially) compared to competitors.
An internal analysis focuseson the company's ________.
A) vision and mission
B) market share
D) resources andoperations
________reveal an inefficient use of assets that restricts profitability.
________are usually difficult for competitors to imitate and represent a major focusfor strategic development at the corporate level.
A ________ is anassessment of a firm's capabilities relative to those of its competitors aspertinent to the opportunities and threats in the environment for those firms.
A) SWOT analysis
D) break-even analysis
Futura-CoreTechnologies, an electronics manufacturing firm, has advantages in financialcapability and sustainability, but a disadvantage in speed of innovation. It isalso at a disadvantage relative to Core-Dynamix Technologies, anotherelectronics manufacturing firm, in important factors such as manufacturingcapability and adaptability to market conditions. Which of the following termsbest describes Futura-Core's abilities in comparison to Core-Dynamix?
________ refers to theestablishment of worldwide operations and the development of standardizedproducts and marketing.
Which of the followingis the quickest and cheapest way to develop a global strategy?
C) strategic alliances
Regional strategies aremore appropriate than global strategies for firms that operate in ________.
B) high-tech industries
C) newly emergingindustries
D) mature industries
Which of the followingmost likely encourages firms to localize?
A)increasing tariffs at the host country
B) providing domesticsubsidies
C)demand for undifferentiated, standardized products
D)need for economies of scale
Dell is an Americancorporation that deals with computer technology. With its worldwide sourcingand fully merged production and marketing system, Dell is considered to be a________.
A) greenfield investment
B) turnkey operation
C) shell corporation
D) globally integratedcompany
Accordingto Ghemawat, which of the following offers room for cross-border strategy tohave content distinct from single-country strategy?
Whichof the following terms best describes a company that has operations in variouscountries, follows policies to develop local R&D to tailor products tomarkets, lets plants set their own rules, and aims at being a good corporatecitizen in every country?
________are companies that start out with a global reach, typically by using theirInternet capabilities and also through hiring people with internationalexperience and contacts around the world.
Which of the followingentry strategies requires little investment and enables quick and easy marketwithdrawal?
B) joint ventures
C) turnkey projects
Whichof the following grants the rights to a firm in the host country to eitherproduce or sell a product, or both?
A)international licensing agreement
B)voluntary export restraint
C)memorandum of association
D)letter of credit
Whichof the following can be regarded as a pressure to globalize?
A)decreasing competitive clout
B)information technology expansion
D)spread of economic nationalism
Licensing is especiallysuitable for ________.
A)firms with a single product line and a constant technological environment
B)large firms with huge financial and managerial resources for direct investmentabroad
C)the mature phase of a product's life cycle when production is relativelystandardized
D)firms that want to control all of the licensee's activities and performances
Which of the followingis the most critical aspect of a franchising strategy?
C) quality control
D) local marketing
________is an ideal strategy for small businesses with few financial and managerialresources for direct investment abroad.
A)A joint venture
D)A turnkey operation
The primary motive inthe contract manufacturing strategy is ________.
A) utilizing inexpensiveoverseas labor
B) obtaining rights topatented technology
C) sharing managerialexpertise
D) sharing financialresources
PaneraBread is a chain of cafes serving sandwiches, soups, and freshly baked breads.The company began in 1981 with stores primarily located along the east coast ofthe U.S. Since then, the firm has expanded to over 1,300 locations throughoutthe U.S. and Canada. The firm has strong earnings and has been designated by BusinessWeek as a "Significant Growth Company." Panera Bread executivesare considering the idea of expanding globally by opening cafes in Asia througha franchising strategy. Which of the following, if true, supports the argumentthat Panera Bread should expand into Asia through franchising?
A)Panera Bread executives want to test the Asian market with a short-termcommitment that allows them to make quick profits.
B)Panera Bread executives want fast access to the Asian market without asignificant investment of capital.
C)The Panera Bread menu changes rapidly, and each cafe's artisan bread bakersreceive regular training on new recipes.
D)The Panera Bread mission is to make excellent bread available to customersaround the world.
PaneraBread is a chain of cafes serving sandwiches, soups, and freshly baked breads.The company began in 1981 with stores primarily located along the east coast ofthe U.S. Since then, the firm has expanded to over 1,300 locations throughoutthe U.S. and Canada. The firm has strong earnings and has been designated by BusinessWeek as a "Significant Growth Company." Panera Bread executivesare considering the idea of expanding globally by opening cafes in Asia througha franchising strategy. Which of the following, if true, undermines the argumentthat Panera Bread should expand into Asia through franchising?
A)Quality control is a high priority for Panera Bread.
B)Panera Bread wants to access the Asian market quickly.
C)Panera Bread's primary competitor has already expanded to Asia.
D)Many Panera Bread managers have expressed interest in relocating to Asia.
Offshoringprovides the company with access to foreign markets while avoiding ________.
A)relocation of the company to other countries
B)competition between companies in the global market
Whichof the following terms refers to operating in concentrations of related,interdependent companies within an industry that uses the same suppliers,specialized labor, and distribution channels?
Whichof the following statements is true of clustering?
A)It uses different suppliers and distribution channels for interdependentcompanies within an industry.
B)It helps a firm gain an increase in efficiencies.
C)It seldom uses specialized labor.
D)It typically increases the costs of production and distribution.
Theuse of professional or skilled workers located in countries other than that ofthe home country is referred to as ________.
A company designs andconstructs a facility abroad, trains local personnel, and then transfers thefacility to local management for a fee. Which of the following entry strategiesis being implemented by the company?
C) turnkey operation
A ________ gives aforeign company the rights to oversee the daily operations of a business butnot to make decisions regarding ownership, financing, or strategic and policychanges.
A) licensing agreement
B) management contract
C) turnkey operation
Which of the followingentry strategies is most likely to serve as a short-term strategy and toprovide limited income?
A) joint venture
B) management contract
D) fully ownedsubsidiary
Which of the followingstrategies would most likely be used by a non-European company wanting to gainquick entry inside the European community?
A) international jointventure
B) greenfield investment
C) turnkey operation
MerylSoftware Inc., an American MNC wishing total control of its operations, wantsto acquire an existing firm, Graphiti Animations, in Canada. If acquired,Graphiti Animations would be a ________.
Whichof the following is an advantage of establishing a new, fully-owned foreignmanufacturing?
A)absence of expropriation risks
C)full control over decision making
Which of the followingis generally viewed as the most risky entry strategy?
A) turnkey operations
B) new, fully-ownedsubsidiaries
C) international jointventures
D) service sectoroutsourcing
Whichof the following environmental factors would most likely increase the risk fora firm that has established a fully owned subsidiary in a country?
D)quality control issues
Whichof the following is a critical success factor for exporting?
B)domestic client acceptance
C)choice of distributor
D)differences in business models
Whichof the following is the primary advantage of using e-business as a local-levelentry strategy?
A)shared costs and risks
B)access to highly skilled workers
C)rapid entry and exit from markets
D)avoidance of tariffs and regulations
Whichof the following is an internal factor that affects the choice of internationalentry mode for a company?
A)potential of local market
B)knowledge of local market
D)global experience of firm and managers
Whichof the following is an external factor that affects the choice of internationalentry mode for a company?
A)industry growth rate
C)costs of making or enforcing contracts with local partners
D)intent to conduct research and development with local partners
Whichof the following is a venture-specific factor that affects the choice ofinternational entry mode for a company?
A)competition in local market
B)level of global competition
C)ability to protect proprietary technology
D)corporate culture and structure
According to Gupta andGovindarajan, an alliance-based entry strategy is most suitable when ________.
A) firms have asignificant amount of capital
B)the risk of asymmetric learning by the partner is low
C) cultural distancebetween home and host countries is extremely low
D)the subsidiary would be highly integrated with the rest of the globaloperations
Theprocess by which a firm's managers evaluate the future prospects of the firmand decide on appropriate strategies to achieve long-term objectives is calledstrategic planning.
Globalizationof competitors is one of the proactive reasons that prompt a company to operateoverseas.
Companies seek out less restrictive foreignoperating environments when the regulations and restrictions enforced by thefirm's home government become expensive.
Operationsin foreign countries frequently start as a response to customer demands.
Onepressing reason for many large firms to expand overseas is to seek economies ofscale.
Itis impossible for small businesses, such as those with fewer than 500 workers,to do business overseas.
Theavailability of raw materials and other resources offers both greater controlover inputs and lower transportation costs.
Taxexemptions, subsidies, and loans decrease risk and increase profits. Hence,they are attractive to foreign companies.
Thestrategic management process invariably follows a linear format.
Thestrategic management process consists of independent and discontinuous steps.
Themission of an organization provides a basis for strategic decisionmaking.
Production,one of the five global corporate objectives, deals with development of newproducts with global patents.
Afterclarifying the corporate mission and objectives, the first major step inweighing international strategic options is the environmental assessment.
Environmentalscanning should be conducted on the national level exclusively.
Antidumpinglaws enable formal institutions to affect international competition.
Inenvironmental scanning, the first broad scan of all potential world marketsresults in the firm being able to eliminate from its list those markets that areclosed or insignificant or do not have reasonable entry conditions.
Internalanalysis is carried out to assess a firm's capabilities and critical successfactors compared to those of its competitors.
Corecompetencies are typically easy for competitors to imitate.
Theterm globalization refers to the establishment of worldwide operations and thedevelopment of standardized products and marketing.
Offshoringis when a company moves one or all of its factories from the host country tothe home country.
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