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ECO Final Exam Ch. 11

Which of these is the process of identifying and selecting an organization’s objectives and deciding how the organization will achieve those objectives?
A) Mission formulation
B) Planning
C) Value chain analysis
D) Strategy development
B
________ is the set of planned actions taken by managers to help a company meet its objectives.
A) Mission formulation
B) Planning
C) Value chain analysis
D) Strategy
D
The strategy formulation process involves both ________.
A) planning and strategy
B) strategy and structure
C) planning and marketing
D) strategy and production
A
Which of these refers to a written statement of why a company exists and what it plans to accomplish?
A) Strategy statement
B) Mission statement
C) Value chain statement
D) Core competency statement
B
All parties affected by a company’s activities are called ________.
A) stakeholders
B) suppliers
C) stockholders
D) employees
A
A company’s stakeholders include all of the following EXCEPT ________.
A) suppliers
B) employees
C) consumers
D) competitors
D
Which of these is the first stage of the strategy formulation process?
A) Formulate strategies
B) Implement strategies
C) Identify company mission and goals
D) Identify core competency and value creating activities
C
During the second stage of the strategy formulation process, a company does all of the following EXCEPT analyze ________.
A) the firm’s primary activities
B) competitors’ unique abilities
C) national and international business environments
D) the firm’s support activities
B
All of the following are part of stage three of the strategy formulation process EXCEPT ________.
A) selecting multinational or global strategy
B) formulating departmental-level strategy
C) analyzing business-level environment
D) formulating corporate-level strategy
C
The objective to mass-produce a zero-pollution emissions automobile by 2020 would most likely belong to a(n) ________.
A) individual business unit
B) individual department
C) regional headquarters
D) global headquarters
A
To be the largest global company in each industry in which we compete is an example of an objective at the ________.
A) individual department level
B) business-unit level
C) consumer level
D) corporate level
D
At which level in a company do objectives usually become more precise and almost always contain numerical targets of performance?
A) Individual department level
B) Business-unit level
C) Consumer level
D) Corporate level
A
Which of these is a special company ability that competitors find extremely difficult to equal?
A) Value chain
B) Core competency
C) Growth strategy
D) Location economics
B
An architect’s ability to design an office building in the Victorian style is an example of a(n) ________.
A) core competency
B) skill
C) ability
D) capability
B
Which of these divides a company’s activities into primary and support activities central to creating customer value?
A) Mission statement analysis
B) Location analysis
C) Multinational analysis
D) Value chain analysis
D
Which of these is a primary activity in a company’s value chain?
A) Infrastructure
B) Marketing and sales
C) Procurement
D) Human resource management
B
Inbound and outbound logistics are considered ________.
A) capabilities
B) primary activities
C) support activities
D) core competencies
B
Human resource management is an example of a ________.
A) capability
B) primary activity
C) support activity
D) core competency
C
Which of these is NOT a support activity in a company’s value chain?
A) Infrastructure
B) Marketing and sales
C) Procurement
D) Human resource management
B
All of these are primary activities in a firm’s value chain EXCEPT ________.
A) operations
B) inbound and outbound logistics
C) customer service
D) human resource management
D
Which of these is a support activity in a firm’s value chain?
A) Operations
B) Inbound and outbound logistics
C) Customer service
D) Human resource management
D
A strategy of adapting products and their marketing strategies in each national market to suit local preferences is called a ________.
A) multinational strategy
B) stability strategy
C) global strategy
D) retrenchment strategy
A
Companies often establish largely independent, self-contained units in each national market under which of these strategies?
A) Retrenchment
B) Global
C) Multinational
D) Stability
C
Which of these strategies are appropriate for companies in industries where buyer preferences do not converge across national borders?
A) Retrenchment
B) Global
C) Multinational
D) Stability
C
A strategy that establishes research and development (R&D), production, and marketing at the subsidiary level is called a ________ strategy.
A) retrenchment
B) global
C) multinational
D) stability
C
The main drawback of a multinational strategy is that it does not allow a company to ________.
A) exploit scale economies in product development and marketing
B) closely monitor buyer preferences in each local market
C) modify its products except for the most superficial features
D) respond quickly and effectively to emerging buyer preferences
A
In an industry where price competitiveness is a key success factor, a firm should NOT use a ________ strategy.
A) retrenchment
B) global
C) multinational
D) stability
C
Offering the same products using the same marketing strategy in all national markets is referred to as a ________ strategy.
A) global
B) multinational
C) retrenchment
D) multidomestic
A
Companies producing entire inventories of products or components in one or very few optimal locations are likely following a ________ strategy.
A) retrenchment
B) global
C) multidomestic
D) multinational
B
Companies performing product R&D in one or very few locations are likely following a ________ strategy.
A) retrenchment
B) global
C) multidomestic
D) multinational
B
Companies designing promotional campaigns and advertising strategies at headquarters are likely following a ________ strategy.
A) retrenchment
B) global
C) multinational
D) multidomestic
B
Global products are most common in industries where there is ________.
A) little buyer convergence
B) low pressure to contain costs
C) significant price competition
D) high pressure for localization
C
A ________ strategy can create cost savings due to product and marketing standardization.
A) retrenchment
B) multidomestic
C) multinational
D) global
D
A ________ strategy can cause a company to overlook important differences in buyer preferences from one market to another.
A) global
B) retrenchment
C) multidomestic
D) multinational
A
The main benefit of a global strategy is that it allows a company to ________.
A) closely monitor buyer preferences in each local market
B) save costs due to product and marketing standardization
C) avoid either growth or retrenchment
D) respond effectively to emerging buyer preferences
B
Companies involved in more than one line of business must first formulate a ________.
A) business-level strategy
B) department-level strategy
C) corporate-level strategy
D) global-level strategy
C
All of these are key approaches to corporate-level strategy EXCEPT ________.
A) differentiation
B) growth
C) stability
D) retrenchment
A
A growth strategy is designed to ________.
A) guard against change
B) reduce the scale or scope of a corporation’s operations
C) increase the scale or scope of a corporation’s operations
D) mix growth, retrenchment, and stability strategies
C
Yardsticks most commonly used to measure growth include all of the following EXCEPT ________.
A) geographic coverage
B) number of business units
C) market share
D) average age of facilities
D
Which of these strategies is designed to increase the scale or scope of a corporation’s operations?
A) Differentiation
B) Growth
C) Stability
D) Retrenchment
B
Organic growth refers to corporate strategy relying on ________.
A) mergers and acquisitions
B) joint venture growth
C) internally generated growth
D) strategic alliance growth
C
Methods of growth include all of the following EXCEPT ________.
A) acquisitions
B) joint ventures
C) strategic alliances
D) inorganic growth
D
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
C
A retrenchment strategy is designed to ________.
A) guard against change
B) reduce the scale or scope of a corporation’s operations
C) increase the scale or scope of a corporation’s operations
D) mix growth, retrenchment, and stability strategies
B
A company that is closing factories with unused capacity and laying off workers is likely following a ________ strategy.
A) growth
B) retrenchment
C) stability
D) combination
B
A company that is reducing the scope of its activities by selling unprofitable business units or those no longer directly related to its overall aims is likely following a ________ strategy.
A) growth
B) retrenchment
C) stability
D) combination
B
Which of these strategies is designed to guard against change?
A) Stability
B) Growth
C) Retrenchment
D) Differentiation
A
Companies that see the business environment as posing neither profitable opportunities nor threats will likely follow a ________ strategy.
A) growth
B) retrenchment
C) stability
D) combination
C
Which strategy works best with mass-marketed products aimed at price-sensitive buyers?
A) Differentiation
B) Stability
C) Low-cost leadership
D) Retrenchment
C
A strategy in which a company exploits economies of scale to have the lowest cost structure of any competitor in its industry is called ________.
A) differentiation
B) stability
C) low-cost leadership
D) retrenchment
C
Which of these strategies 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
A
Companies that follow a ________ strategy can charge a higher price and enjoy greater customer loyalty than the low-cost leader.
A) differentiation
B) stability
C) low-cost leadership
D) retrenchment
A
Which of the following is NOT a way that products can be differentiated?
A) Quality
B) Design
C) Accounting methods
D) Brand image
C
Which of the following is NOT a characteristic upon which products are typically differentiated?
A) Brand image
B) Product design
C) Quality reputation
D) Low cost
D
The way in which a company divides its activities among separate units and coordinates activities among those units is referred to as ________.
A) process planning
B) organizational structure
C) capacity planning
D) mission and objectives
B
An organizational structure that organizes a company’s entire global operations into countries or geographic regions is referred to as a(n) ________ structure.
A) international area
B) international division
C) global matrix
D) global product
A
An organizational structure that splits the chain of command between product and area divisions is referred to as a(n) ________ structure.
A) international area
B) international division
C) global matrix
D) global product
C
A team in which employees from a single department take on responsibilities of their former supervisors is called a ________ team.
A) cross-functional
B) self-managed
C) global
D) domineering
B
A team of top managers from both headquarters and international subsidiaries who meet to develop solutions to company-wide problems is referred to as a ________ team.
A) culture
B) cross-functional
C) global
D) self-managed
C
Scenario: Beanstalk International
Beanstalk International is rapidly growing. The company wants to follow a strategy of adapting its products and marketing in each national market to suit local preferences. Beanstalk is intent on creating value for its customers.

Beanstalk managers should conduct which of the following to identify company activities that create value for its customers?
A) Mission statement analysis
B) Competitive analysis
C) Value chain analysis
D) Process and capacity planning

C
Scenario: Beanstalk International
Beanstalk International is rapidly growing. The company wants to follow a strategy of adapting its products and marketing in each national market to suit local preferences. Beanstalk is intent on creating value for its customers.

Which of the following would be considered a primary activity in creating value for customers, as opposed to a support activity?
A) Firm infrastructure
B) Procurement
C) Human resource management
D) Logistics

D
Scenario: Beanstalk International
Beanstalk International is rapidly growing. The company wants to follow a strategy of adapting its products and marketing in each national market to suit local preferences. Beanstalk is intent on creating value for its customers.

Which of these would be considered a support activity in creating value for Beanstalk’s customers, as opposed to a primary activity?
A) Production
B) Marketing and sales
C) Customer service
D) Technology development

D
Scenario: Beanstalk International
Beanstalk International is rapidly growing. The company wants to follow a strategy of adapting its products and marketing in each national market to suit local preferences. Beanstalk is intent on creating value for its customers.

The strategy that Beanstalk would most likely want to follow is called a ________ strategy.
A) multinational
B) retrenchment
C) global
D) stability

A
Scenario: Beanstalk International
Beanstalk International is rapidly growing. The company wants to follow a strategy of adapting its products and marketing in each national market to suit local preferences. Beanstalk is intent on creating value for its customers.

Beanstalk managers know that the drawback of such an adaptive strategy is that ________.
A) it does not allow companies to exploit scale economies in product development, manufacturing, and marketing
B) it can cause a company to overlook important differences in buyer preferences from one market to another
C) it is applicable to industries in which price-competitiveness is a key success factor
D) it does not allow a company to modify its products except for the most superficial features

A
Scenario: TeleToys International
TeleToys International, a U.S.-based company, recently opened 18 toy stores in Brazil, acquired a women’s clothing store company in Canada, and closed its men’s clothing store chain in Australia. The company has a structure that organizes its global operations into geographic regions.

TeleToys’ opening of 18 stores in Brazil can best be described as a(n) ________ strategy.
A) organic growth
B) stability
C) retrenchment
D) acquisition

A
Scenario: TeleToys International
TeleToys International, a U.S.-based company, recently opened 18 toy stores in Brazil, acquired a women’s clothing store company in Canada, and closed its men’s clothing store chain in Australia. The company has a structure that organizes its global operations into geographic regions.

The closing of TeleToys’ Australian men’s clothing store chain can best be described as a(n) ________ strategy.
A) organic growth
B) stability
C) retrenchment
D) acquisition

C
Scenario: TeleToys International
TeleToys International, a U.S.-based company, recently opened 18 toy stores in Brazil, acquired a women’s clothing store company in Canada, and closed its men’s clothing store chain in Australia. The company has a structure that organizes its global operations into geographic regions.

If TeleToys wants buyers to perceive its products as unique, it should follow which type of strategy?
A) Retrenchment
B) Global
C) Differentiation
D) Low-cost leadership

C
Scenario: TeleToys International
TeleToys International, a U.S.-based company, recently opened 18 toy stores in Brazil, acquired a women’s clothing store company in Canada, and closed its men’s clothing store chain in Australia. The company has a structure that organizes its global operations into geographic regions.

Which of the following features would TeleToys be LEAST likely to use to create the perception of unique products?
A) Brand image
B) Quality reputation
C) Product design
D) Low cost

D
Scenario: TeleToys International
TeleToys International, a U.S.-based company, recently opened 18 toy stores in Brazil, acquired a women’s clothing store company in Canada, and closed its men’s clothing store chain in Australia. The company has a structure that organizes its global operations into geographic regions.

The company’s organizational structure can best be referred to as a(n) ________ structure.
A) international division
B) global product
C) global matrix
D) international area

D
Scenario: Redding Club
Redding Club is a recording and music distribution company with a significant market presence in its native India—an emerging market. Redding’s CEO, Bill Woods, an immigrant from England, is concerned whether the company will be able to compete against a large, multinational music corporation that is targeting India as part of its growth strategy.

Bill knows that if globalization pressures in the industry are weak, and a company’s own assets are not transferable, the company should concentrate on its home turf using a(n) ________ strategy.
A) defender
B) extender
C) dodger
D) contender

A
Scenario: Redding Club
Redding Club is a recording and music distribution company with a significant market presence in its native India—an emerging market. Redding’s CEO, Bill Woods, an immigrant from England, is concerned whether the company will be able to compete against a large, multinational music corporation that is targeting India as part of its growth strategy.

If globalization pressures are weak in the music industry, and Redding Club’s assets can be transferred abroad, the company may be able to extend its success to a limited number of other markets using a(n) ________ strategy.
A) defender
B) extender
C) dodger
D) contender

B
Scenario: Redding Club
Redding Club is a recording and music distribution company with a significant market presence in its native India—an emerging market. Redding’s CEO, Bill Woods, an immigrant from England, is concerned whether the company will be able to compete against a large, multinational music corporation that is targeting India as part of its growth strategy.

If globalization pressures are strong, but Redding Club’s assets cannot be easily transferred to new markets, the company may want to restructure itself around activities that buyers value by using a(n) ________ strategy.
A) defender
B) extender
C) dodger
D) contender

C
Scenario: Redding Club
Redding Club is a recording and music distribution company with a significant market presence in its native India—an emerging market. Redding’s CEO, Bill Woods, an immigrant from England, is concerned whether the company will be able to compete against a large, multinational music corporation that is targeting India as part of its growth strategy.

If Bill decides that Redding Club’s best chance for success is to simply face the large multinational head- on, the company would pursue a(n) ________ strategy.
A) defender
B) extender
C) dodger
D) contender

D

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