BUSINESS BMAL 590 ALC6 Global Strategy ALC6 Global Strategy -Overall, strategy is a rulebook a blueprint a set of programmed instructions none of the above -Much of our knowledge about the firm is from research on firms in Anglo-American capitalism Japan after World War II German mathematical models emerging markets -The word blank____________ has now become the most famous Chinese business word to appear in English-language media and means interpersonal networks. keiretsu guanxi chaebol blat -Global Strategy refers to a particular theory on how to compete offering standardized products and services on a worldwide basis strategy of firms around the globe essentially various firms theories about how to compete successfully all of the above -Global strategies have reached new levels of significance because of three defining events: education, fewer travel restrictions, and world banking cultural diversity, world-wide education standards, and emerging nations terrorist attacks, anti-globalization protests, and corporate crisis in Asia and the U.S. expanding travel, shared sense of capitalism, and world standards for ethical behavior -A SWOT analysis entails a firms assessment of blank______ strengths, weaknesses, opposition, and threats strengths, weaknesses, opportunities, and threats strategy, weaknesses, opposition, and threats. strategy, weaknesses. opportunities, and timing -At the dawn of the 21st century, blank____ had significant ramifications for companies and strategists around the world. anti-globalization protests terrorist attacks corporate governance crisis all of the above -Knowing the concepts and components of global strategy will improve job and career opportunities build awareness of what is going on in the world avoid the downside risks of globalization all of the above -What is the best view of the concept of globalization? A new force sweeping through the world in recent times A long-run historical evolution since the dawn of human history A pendulum that swings from one extreme to another from time to time All of the above -What are the three legs of the strategy tripod that ensure a strategy impacts performance? Industry-based competition, firm-specific resources and capabilities, and institutional conditions and transitions Resources, industry-based considerations, and local influences Corporate leadership, willingness to take a loss, and desire to build on other-country markets Innovative goods, low-cost production centers, and sufficient capital to withstand the initial stages -In developing a strategy regarding competition or cooperation, it would be useful to not Look back, reason ahead strengthen capabilities that more effectively compete and/or cooperate understand the rules of the game governing competition around the world understand the nature of your industry -The extent to which a given competitor possesses strategic endowment comparable, in terms of both type and amount, to those of the focal firm refers to similarity of strategy resources markets industry -Which is not true concerning U.S. anti-trust policy today? Legislation has legally permitted rivals to join hands in research and development (R&D) There is increased permissiveness regarding mergers among rivals The legal standards for inter-firm cooperation are no longer ambiguous in the U.S. Clarity of policy has improved -Dumping is defined as shipping hazardous waste to locations in other countries an exporter selling below cost abroad and planning to raise prices after eliminating local rivals unloading unsold inventory from the U.S. in other countries excessive criticism of international rivals -In some industries where pressures for globalization are relatively low, local firms may possess some skills and assets that are transferable overseas, thus leading to a/anblank_____ strategy. defender extender dodger contender -The main types of attack include thrust feint gambit all of the above -Which of the following would not be considered an initial set of actions to gain competitive advantage: counterattacks advertising campaigns market entries price cuts -Which of the following is not a legal means of signaling? Nonaggression or fat cat Truce seeking Direct discussion of reduced rivalry with competitors Communication via governments -Which is true of strategy? Business strategy has similarities with military strategy Military principles cannot be completely applied in business Militaries fight over territories, waters, and air spaces while firms compete in markets All of the above -The three drivers of counterattacks do not include vengeance motivation capability awareness -Which of the following is not an argument in favor of centralization in knowledge management but instead is an argument in favor of decentralization? Capability to facilitate corporate-wide coordination Consistency in decision-making Permits greater speed, flexibility, and innovation Sufficient power for corporate-level managers to initiate necessary actions -Unique to international competition are the pressures for local responsiveness, which are reflected in consumer preferences distribution channels host country demands all of the above -Four strategic choices for MNEs do not include home replication domestic multi-domestic transnational -The type of knowledge that is codifiable (that is, it can be written down and transferred without losing much of its richness) is calle explicit implicit tacit lucid -Which is true of globalized R&D? Is often known as innovation-avoidance expense One way to access such a high technology and research-rich cluster is to avoid FDI R&D work performed by different locations and teams around the world virtually guarantees failure For large firms, there are actually diminishing returns for R&D -Knowledge management uses centers of excellence in which type of MNE? home replication localization (multi-domestic) global standardization transnational -Localization (multi-domestic) strategy involves all of the following except focuses on a number of foreign countries/regions global standardization strategy is the same as a multi-domestic strategy is effective when there are clear differences among national and regional markets a localization (multi-domestic) strategy has high costs -Pressures for cost reductions and local responsiveness include the framework of how to simultaneously deal with these two sets of pressures host country demands and expectations being locally responsive makes local customers and governments happy but increase costs all of the above -Which of the following is not an argument in favor of decentralization in knowledge management but instead is an argument in favor of centralization? Better motivates subsidiary-level managers and employees through empowerment Reduces corporate level overload of responsibilities Better motivates subsidiary level managers Sufficient power for corporate-level managers to initiate necessary actions -This structure is often used to supply customers (often other MNEs) in a coordinated and consistent way across various countries. global account structure an industry sector structure solutions-based structure all of the above -The differences in formal and informal institutions that govern the rules of the game in different countries include blank_______ differences. Regulatory Language Cultural All of the above None of the above -As firms expand into more countries, they should recognize: Foreign firms are still often discriminated against. Foreign firms primarily deploy overwhelming resources and capabilities that offset the liability of foreignness. Foreign firms are able to offset the liability of foreignness and still have some competitive advantage. All of the above. None of the above. -Small firms in a large domestic market are referred to as: Enthusiastic internationalizers. Follower internationalizers Slow internationalizers. Occasional internationalizers. Domestic internationalizers. -Firms may choose not to enter certain countries if: They possess rare firm-specific assets. The transaction costs are too low. There are dissemination risks. There is an authorized diffusion of firm-specific assets. All of the above. -Organizing firm-specific resources and capabilities as a bundle: Favors firms with strong complementary assets. Prevents having assets integrated as a system. Discourages using them overseas. Is counterproductive Occurs only in domestic markets. -Which of the following are not regulatory risks? An obsolescing bargain. Deals that have been struck by MNEs and host governments. Nationalization. Recent trends among host governments regarding their relationships with MNEs. B and C above. -Which of the following exemplify trade barriers? Tariffs. Local content requirements. Restrictions on certain entry modes. A and C above. All of the above. -The strategic goal of blank__________ involves going after countries that offer the highest price. Natural resources seeking Market seeking Efficiency seeking Innovation seeking Profit seeking -First mover advantages do not include: Developing proprietary, technological leadership. Preempting scarce assets. Establishing entry barriers. Successful clashes with dominant firms in domestic markets. Creating good relationships with key stakeholders. -Large-scale entries do which of the following? Benefit from a strategic commitment. Assure local customers and suppliers. Deter potential entrants. A and B above. All of the above. -Non-equity modes of entry typically involve Exports and contractual agreements. Larger, harder-to-reverse commitments. Establishing independent organizations overseas. Joint ventures (JVs). Wholly owned subsidiaries. -All of the following are true of direct exports except: Most basic mode of entry. Capitalizes on economies of scale in production concentrated in the home country. Affords better control over distribution The agendas and objectives of the intermediaries and exporters are the same. Designs and productions geared for the domestic market first and foremost. -Selling the rights to intellectual property for a royalty fee is involved in: Licensing/franchising. Turnkey projects. R&D contracts. Co-marketing. All of the above. -Greenfield operations refers to: Licensing/franchising. Turnkey projects. R&D contracts. Co-marketing. Wholly owned subsidiaries. -Sources of operational synergy include: Technologies. Marketing. Manufacturing All of the above. None of the above. -Diversification premium is the same thing as: Conglomerate advantage. Diversification discount. Conglomerate disadvantage. Level of product diversification. Measurement of firm performance. -Which would be more characteristic of conglomerates? Putting ones eggs in one basket. Putting ones eggs in similar baskets. Putting ones eggs in different baskets. A and B above. B and C above. -Research regarding the relationship between product diversification and firm performance indicates that: Performance may increase as firms shift from single business strategies to product-related diversification. Performance may decrease as firms change from product-related to productunrelated. The linkage between diversification and performance is inverted U shaped. Putting your eggs in similar baskets, has emerged as a balanced way to both reduce risk and leverage synergy. All of the above. -Which geographic diversification is most likely to reduce the liability of foreignness? Culturally adjacent countries. Extensive international scope. Beyond geographically neighboring countries. Beyond culturally neighboring countries. All of the above -In combining product and geographic diversification, which is not one of the four possible combinations? Anchored replicators. Multinational replicators. Far-flung conglomerates. Classic replicators. Classic conglomerates. -At its core, diversification is essentially driven by all of the following except: Economic benefits. Bureaucratic costs. Synergy Less complicated information systems. MEB -Select the best choice: a company that is engaged in oil production, pipelines and tankers, refining, and gasoline stations has engaged in blank______________ expansion. Horizontal Vertical Conglomerate Friendly M&A Hostile M&A -Which is one motive for M&A which does not necessarily increase shareholder value? Synergistic. Hubris. Performance. A and C above. None of the above. -Corporate scope is shaped by: Industry conditions. Firm capabilities. Institutional constraints. Opportunities in both developed and emerging economies. All of the above. -Product-related diversification involves all of the following except: A single business strategy. Entries into activities that are related to a firms existing markets and/or activities. The emphasis is on economies of scale rather than scope. Increases in competitiveness. Synergy. -The following managerial motives for conglomerations do not benefit shareholders except: Norms. Reducing managers employment risk. Organizational stability. Pursuing power, prestige, and income. Empire building. -Which of the following is true regarding M&As? As many as 70 percent of M&As reportedly fail. On average, the acquiring firms performance improves after acquisitions. Target firms, after being acquired and becoming internal units, often perform better than when they were independent, stand-alone firms. The only identifiable losers are the shareholders of target (acquired) firms. The outstanding success of M&As is due to pre- and post acquisition phases. -To ensure the success of the M&A, managers need to make sure of all the following except: Be willing to walk out when premiums are too high. Engage in adequate due diligence concerning strategic fit. Seek organizational contrast and variety rather than organizational fit. Address the concerns of multiple stakeholders. Recognize that that integration management is a fulltime job. -Which is true regarding restructuring? There are two primary ways of restructuring, namely downsizing and upsizing. A rising level of competition within an industry normally prevents restructuring. Corporate restructuring is not widely embraced around the world. Restructuring is one of first things to consider when trying to improve profitability. Restructuring is easier in knowledge-intensive firms than capital-intensive firms. -Which is true of relatedness? Measurement of product relatedness is no longer debatable. A product-related firm will be considered related regardless of the measure used. Some argue that product relatedness refers specifically to the visible product linkages. Relatedness can be a common underlying dominant logic that connects various businesses in a diversified firm. Product-unrelated conglomerates may are not linked by institutional relatedness.
