Chapter 9: International Competitive Strategy Flashcards
a plan that guides the way firms make choices about developing and deploying scarce resources to achieve their international objectives.
International strategy
An international strategy must be _______ throughout the company to be a success.
consistent
ability of a company to achieve and maintain a unique and valuable competitive position both within a nation and globally, generating higher rates of profit than its competitors; must have a value proposition for consumers for them to buy your product instead of competitors.
competitive advantage
To achieve a competitive advantage, a company must develop competencies that (4 things):
- Create value for which customers are willing to pay
- Are rare.
- Are difficult to imitate or substitute for.
- Allow the firm to be organized to fully exploit the competitive potential of these competencies.
the process by which an organization determines where it is going in the future, how it will get there, and how it will assess whether and to what extent it has achieved its goals.
Strategic planning
the strategic planning process starts with a _______ and a ________.
mission; vision
What is one big part of strategic planning for a company?
SWOT Analysis
What two parts of the SWOT Analysis are things that are external (a company can’t control), and the two things that are internal (a company can control)?
- External: Opportunities and threats
- Internal: Strengths and weaknesses
_________ _________ provides a way to identify opportunities and threats, and gives decision makers a common understanding of business, strategy, assumptions, and direction.
strategic planning
What are the 7 Steps in the Process of Global Strategic Planning?
- Analyze the company’s external environment.
- Analyze the company’s internal environment.
- Define the company’s business and mission.
- Set corporate objectives.
- Quantify goals (important bc unless your goals are quantifiable, measurable, and consistent, then they are worthless).
- Formulate strategies.
- Make tactical plans.
Step 1 of Strategic Planning: Analyze Domestic, International, and Foreign Environments (External Environments):
Managers must know what the _______ ______ ______ are and where they appear to be going, and to develop and implement appropriate responses to any changes in key environmental forces.
present force values
(have to know what’s going on nationally and internationally and take advantages of opportunities first, or else competition will)
What 3 trends are more critical to strategy than in the past, but few businesses act on it?
- Environmental
- Social
- Business
What are the 3 things that are a part of the internal (controllable) environment for a business?
- Employees
- Technology
- Quality
the set of interlinked activities that add value to the final product or service.
value chain
______ ______ ________ assesses where and to what extent value is added to the final product or service.
- Who are the company’s target customers?
- What value does the company want to deliver to these customers?
- How will this customer value be created?
Value chain analysis
T or F: Knowledge is a controllable corporate resource, is a huge asset, and is worth a lot.
True
(countries around the world (especially developing nations) are eager to have that managerial/technical knowledge.)
T or F: Knowledge can make a huge difference in getting a contract signed.
True
(ex: when you invest in a country, you’re not just selling them the products, but you are also transferring knowledge to those countries; helping them to get better managerially that other competitors are not; sets you apart from competitors who are also trying to penetrate a market with products at same price, product, quality → give that market an added value (knowledge))
the practice organizations use for identifying, creating, acquiring, developing, dispersing, and exploiting competitively valuable knowledge.
knowledge management
_______ knowledge is difficult for an individual to express clearly in words, pictures, or formulas and is therefore difficult to transmit to others.
Tacit
_______ knowledge is easy to communicate to others via words, pictures, formulas, or other means.
Explicit
The mission statement of a company is more about the (present/future). The vision statement of a company is more about the (present/future)
- present
- future
defines the organization’s purpose and scope.
mission statement
(ex: google → to organize the world’s information and make it universally accessible and useful.)
describes the desired future position if the organization can acquire the necessary competencies and successfully implement its strategy.
vision statement
a clear, concise description of the fundamental values, beliefs, and priorities expected of the organization’s members, reflecting how they are to behave with each other and with the company’s customers, suppliers, and other members of the global community.
values statement
(ex: Kiva → “we envision a world where all people hold the power to create opportunity for themselves and others.”)
Step 4 of Strategic Planning: Set Corporate Objectives…
Objectives direct the firm’s _____ ___ ______, maintain it within the boundaries of the stated ______, and ensure its continuing _______.
- course of action
- mission
- existence
In today’s environment, companies’ objectives will change/be modified because we live in an environment that is increasingly uncertain and very risky. The difference between those who make it vs those who don’t is those who are able to ______ quickly and be _______. So, it’s not all about setting the objectives, you need to be able to ______ them when necessary. Company has to be ______.
adapt; flexible; change; flexible
T or F: While quantifying objectives is preferred, companies frequently do not have these.
True
Organizations often have (quantifiable/non-quantifiable) or _______ goals.
non-quantifiable; directional
Objectives tend to become more quantifiable as they get to the _________ level.
operational
Objectives of a company should be what 3 things?
- Measurable
- Have a time interval
- Consistent with the overall nature of the organization
action plans that help organizations reach their objectives.
competitive strategies (ex: (ex: are you going to focus on lower costs, penetrating new markets, etc.)
T or F: Sometimes companies will sacrifice one thing for something else, like sacrificing profit for penetrating new markets. Sometimes, they will willingly do this to drive competitors out of the area.
True
(Have to be careful with this strategy ^ because if you sell below costs, that may be illegal and considered dumping.)
What are the 2 opposing forces in the international market?
- Reduction of costs
- Adaptation to local market
the extent to which you will adapt your product to the needs of the country
local adaptation
If a companies pressure to reduce costs is high, and the pressure for local adaptation is high, which type of international strategy should a company use?
Transnational Strategy
If a companies pressure to reduce costs is high, and the pressure for local adaptation is low, which type of international strategy should a company use?
Global Strategy
If a companies pressure to reduce costs is low, and the pressure for local adaptation is low, which type of international strategy should a company use?
Home Replication Strategy
If a companies pressure to reduce costs is low, and the pressure for local adaptation is high, which type of international strategy should a company use?
Multi-domestic Strategy
If a companies pressure to reduce costs is moderate, and the pressure for local adaptation is moderate, which type of international strategy should a company use?
Regional Strategy
strategy where you design products specifically for each market. Focusing a lot on adaptation, but this will be very costly.
Multidomestic Strategy
strategy where the product is the same and sold all over the world with very minor modifications. Not costly (able to minimize costs), but costs you local adaptation. (ex: electronic items)
Global Strategy
strategy where you have a lot of adaptation while also reducing costs simultaneously.
Transnational Strategy
(a true transnational corporation that wants to use this strategy will have to have a board of directors (among other things) that is truly transnational)
Which strategy centralizes product development functions in home country?
Home Replication Strategy
Which strategy is effective when pressure to adapt products or services for local markets is strong?
Multi-domestic Strategy
What strategy works when a company faces strong pressures for cost reduction and limited pressure to adapt to local markets?
Global Strategy
Which strategy is effective when there are pressures for both cost reduction and local adaptation?
Transnational Strategy
Regional Strategies for Competing Globally…
T or F: Standardization is common in R&D and manufacturing, but is not effective in strategy formulation.
True
(Common for some products but not for others; ex: easy to standardize electronics because what people want out of them is the same, however there are other products that are very specific to different cultures and it’s not a “one size fits all”. So, different strategies will have to be formulated in these cases)
Due to uncontrollable variables, there’s been an increasing use of _______ in companies’ planning process.
scenarios
multiple, plausible stories about the future.
scenarios
Fill in the blanks for the Steps to Successful Scenario Planning (What-If/Backup Planning):
1. Determine the ________, _______, and ________ of the decisions with greatest relevance to or impact on your organization.
2. Research existing _______ and _______ in a wide variety of areas (including those areas you might not typically consider).
3. Examine the _______ or key factors that will likely determine the outcome of the stories you are beginning to build.
4. Construct multiple ______ of what could happen next.
5. Play out what the _______ of each of these possible futures might be for your business or organization.
6. Examine your answers and look for those actions or decisions you’d make that were ________ to all two or three of the stories you built.
7. Monitor what does develop so as to trigger your ______ _____ ______.
- area, scope, timing
- conditions; trends
- drivers
- stories
- impact
- common
- early response system
________ plans prepare for critical events that could have a severe impact on the firm.
contingency
(companies must prepare for best and worst case scenarios)
Which step in the Strategic Planning Process does this describe:
Spell out in detail how the objectives will be reached. (need to be detailed and consistent with the kind of company you are); also called operational plans.
Prepare tactical plans
a prediction of future sales performance.
Sales forecast
an itemized projection of revenues and expenses for a future time period.
Budget
T or F: It’s very important to have your frontline workers involved in the decision making process. They know what is taking place and they’ll be the first to detect a change.
True
What are 2 facilitation tools for implementing strategic plans?
- Policies
- Procedures
broad guidelines issued by upper management to assist lower-level managers in handling recurring issues or problems.
Policies
specify ways of carrying out a particular task or activity.
Procedures
What are the 3 ways to measure if a strategy is proceeding successfully or if it needs modification?
By measuring…
1. Success in obtaining and applying required resources.
2. Effectiveness of company’s personnel performance.
3. Progress toward achieving mission, vision, and objectives in a manner consistent with the company’s stated values.
Little agreement on the definition of short, medium, and long-term plans.
Time Horizon
T or F: The time horizon for short, medium, and long-term plans vary depending on the type of industry you’re in.
True
(ex: short-term things for Apple could mean in the next week or month, while for Auburn it could mean next 6 months.)
T or F: Each level in an organization will have its own strategic plan.
True
What are the 3 methods of planning?
Which method works best?
- Top-down
- Bottom-up
- Iterative (works best; both of them combined)
Which method of planning begins at the lowest level and continues upward?
Bottom-up
Which method of planning begins at the highest level and continues downward?
Top-down
Which method of planning is repetition of bottom-up or top-down process until all differences have been reconciled?
Iterative
The _______ _______ Approach replaces the old strategic planning process.
Strategic Management
The Strategic Management Approach combines strategic _______, _________, and __________.
thinking; planning; implementation
Strategic Management is being increasingly recognized as a fundamental task of ____ ________, rather than the job of specialized planners in staff positions.
line management
- In regards to who does strategic planning, in the new approach of strategic management, it often includes ________ with such parties as important customers, distributors, suppliers, and alliance partners, in order to gain firsthand experience with the firm’s markets.
- What other two types of people also have relevant influences?
- interaction
- Governments; activists
How Strategic Planning is Done:
- T or F: Top management generally accepts that a good strategic planning process must allow ideas to surface from anywhere and at any time.
- T or F: Format has become more structured with longer documentation.
- True
- False; LESS structured with SHORTER documentation
The contents of a companies strategic plan is concerned with ______, ________, and _________.
issues; strategies; implementation
The contents of a companies strategic plan incorporates _______, _______-_______ ideas essential to competitive success within a changing and uncertain international environment.
creative; forward-looking
T or F: Strategic plans promote consistency of action among the firm’s managers worldwide and encourage them to consider the ramifications of their actions in the firm’s other geographic and functional areas.
True
Why is scenario analyses an important tool for managers?
a. The objective of the process is to forecast the future.
b. The scenario building team identifies the driving forces and “critical certainties” in a decision and prioritizes them.
c. By anticipating the future and recognizing the warning signs of turbulence ahead, managers can develop more effective strategies.
d. The process extrapolates from past data to build scenarios for guiding decision making.
c. By anticipating the future and recognizing the warning signs of turbulence ahead, managers can develop more effective strategies.
Jenna reported to the management team that their proposed investment in Great Britain could be affected by the Brexit announcement. Which aspect of strategic planning does this demonstrate?
a. Analyze the company’s internal environments.
b. Analyze the company’s external environments.
c. Define the company’s business and mission.
d. Set corporate objectives.
b. Analyze the company’s external environments.
Which aspect of strategic planning helps a company maintain itself within the boundaries of the mission and vision statements?
a. analyzing the internal environment
b. implementing tactical plans
c. setting corporate objectives
d. analyzing the external environment
c. setting corporate objectives
To set corporate objectives, management must first:
a. select a viable market segment.
b. quantify them.
c. define the firm’s mission.
d. research the market.
c. define the firm’s mission.
A company would create procedures in order to:
a. specify how certain activities will be carried out.
b. assure that all scenarios will be the same.
c. provide input for strategic plans.
d. demonstrate general guidelines for common activities.
a. specify how certain activities will be carried out.
Performance measures are done to assess:
a. the time the company takes to acculturate new employees.
b. if the strategy and its implementation are proceeding successfully.
c. assumptions about how the strategic lists affect the business.
d. whether the strategic forecasts are precise.
b. if the strategy and its implementation are proceeding successfully.
A company would rely on triple-bottom-line accounting to:
a. assess the value of marketing promotions.
b. balance imports and exports.
c. measure the company’s strategic performance.
d. examine economies of scale procedures.
c. measure the company’s strategic performance.
