CHP 10 Flashcards
What must firms do to succeed globally?
quickly identify and exploit opportunities wherever they occur, domestically/internationally
What must managers understand to deal with competition?
company mission, vision to achieve mission, strengths and weaknesses to deal with competition
The way firms make choices about developing/deploying scarce resources internationally?
International Strategy
To be effective, a company’s international strategy needs to be?
consistent among various functions, products, and regional units (internal Consistency) and with the demands of the international competitive environment (external consistency)
What is Global Strategic Planning?
organization determines where it is going in the future, how to get there, and how it will asses whether and to what extent it has achieved goals
What is strategic plans intended to?
increase the likelihood of innovations, promoting development, capture, and application of new ideas in order to promote success in a challenging competitive environment
What are the 7 processes providing a formal structure to the Global Strategic planning?
(1) analyzing a firm’s external environments
2) analyzing a firm’s internal environments
(3) defining a company’s business and mission
(4) setting corporate objectives
(5) quantifying goals
(6) formulating strategies and
(7) making tactical plans.
Analyzing Domestic, International and Foreign Environments, managers must…
know present value of the forces, where the forces appear to be headed and develop/implement appropriate responses
Who provides input to the planning staff and prepares a report for the strategy planning committee?
Manager of various functional areas
What is a value chain analysis?
Assessment conducted on the set of interconnected organizations, intended to determine where and to what extent value is added to the final product or service
What are the 3 key questions to consider about the business when conducting a value chain analysis?
- 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?
What is increasingly recognized as the basis for competitive advantage?
Knowledge
Firms face ongoing ____ of creating mechanisms that will _____ and routinely identify _____ for developing and _____ knowledge throughout international operations
Challenges; systematically; opportunities; transferring
Firms face ongoing challenges for ensuring that _____ are willing and able to both ____ what they know and to ____ knowledge from other units of the company
Subsidiaries: Share: Absorb
What is Knowledge Management?
Practices that organizations and managers use to identify create, develop, share and exploit valuable knowledge.
Much valuable knowledge is? and explain
Tactic- known well by individuals but difficult to express verbally/document)
Additional knowledge is?
Implicit
What broad statements help communicate to the firm’s stakeholders what the company is and where it expects to go?
Mission, Vision and Values statements
What is a Mission Statement?
defines firm’s purpose and scope
What is a Vision Statement?
describes desired future position, what it hopes to accomplish if it can acquire needed competencies and successfully implement its strategy
What is Values Statement?
clear, concise description of the fundamental values, beliefs, and priorities of the organization’s members
What directs the firm’s course of action, maintain it within the boundaries of the stated mission, and ensure its continuing existence?
Set Corporate Objectives
If objectives can be ____, they should be.
Quanrified
Firms frequently do have __-_____ or directional goals
Non-quantifiable
What are the 2 opposing forces companies competing internationally confront?
Reduction of Cost and adaptation to local markets
As a consequence of the two opposing pressures, companies have 4 basic strategies for competing internationally: what are they?
- Home Replication Strategy
- Multi-domestic Strategy
- Global Strategy
- Transnational Strategy
The strategy that would be most appropriate for the company depends on?
the amount of pressure the company faces to adapt to local markets and achieve cost reductions
What is Home Replication Strategy?
centralizes product development strategy in the home country, after differentiated products are developed they transfer abroad to capture additional value
When is Home Replication Strategy the best choice?
if there is weak/low pressure for local responsiveness and cost reduction
What is a disadvantage to Home Replication Strategy?
can cause high operating costs b/c of duplicate manufacturing facilities across markets served
What is Multi-domestic strategy?
Decision-making is decentralized to allow the company to modify its products and respond to changes in local competition and demand
When is Multi-domestic strategy used?
where there is strong pressure to adapt products/services for local markets and low pressure to reduce costs
In a Multi-domestic strategy; By tailoring products for specific markets, companies may charge ____ prices
higher
What does local adaptation do to cost structure?
increases
What are the disadvantages to Multi-domestic strategy?
local adaptation may change over time
cost and complexity of coordinating a range of different strategies and product offerings across national/regional markets can be high
What is Global strategy?
Strategy and decision making is typically centralized, and company offers standardized products/services
When is Global Strategy used?
when a company faces strong/high pressure for reducing costs and limited/low pressure to adapt products for local markets
In Global strategy; Value chain activites are located in only one/few areas to achieve what?
economies of scale
Emphasis is on close _____ and ____ of activities across products and markets in Global Strategy
Coordination and integreation
What are some disadvantages to Global Strategies?
limited ability to adjust to changes in customer needs, increased transportation and tariff costs from exporting, and risks of locating activities in a centralized location
What is Transnational Strategy?
Neither highly centralized nor widely dispersed
When is Transnational Strategy used?
High pressure for cost effectiveness and local adaptation
In Transnational Strategy, the location of a company’s assets and capabilities is based on?
Where it would be most beneficial for each specific activity
_____ value chain activities are more centralized, in transnational strategy
“Upstream”
_____ activities are more decentralized, located closer to the customer
“Downstream”
In Transnational Strategy, Managers must ensure that comparative advantages of the locations of their various value chain activities are?
captured and internalized
What is a disadvantage in Transnational strategy?
Complexity of strategic decisions and supporting structures and systems of the organization will be much greater
T/F…All organizational activities face the same mix of globalization and localization pressures
False
What do many top executives believe about marketing strategies?
are best determined locally b/c of local environmental differences
What are Scenarios?
Multiple, plausible stories about the future
What do Scenarios allow?
managers to envision alternatives outsider their traditional frame of reference
What is Contingency Plans?
companies prepare contingency plans for worst and best case scenarios
Prepare Tactical plans is also called?
Operational
What is it to prepare tactical plans?
spell out in detail how the objectives will be reached
What do Sales forecasts and budgets do?
they are two prominent features of the strategic plan, and both a planning and control technique
What is a Sales Forecast?
prediction of future sales performance
What is a Budget?
itemized projection of revenues and expenses for a future period
What are the 2 most important Plan implementation facilitators?
Polices and procedures
What are policies?
broad guidelines issued by upper managment to assist lower level managers to handle recurring problems
What are procedures?
describe how certain activities will be carried out, ensuring uniform action throughout the firm
How many ways are there to measure if a strategy is proceeding successfully or needs modification?
3 ways called Performance Measures
What are the 3 types of performance measures?
- Success in obtaining and applying required resources
- Effectiveness of company’s personnel performance
- Progress toward achieving mission, vision, and objectives in consistent manner in line with company’s values
What are some measurement tools?
Balanced scorecard and triple-bottom-line accounting
Time Horizon is a Kind of Strategic plan, Defined in…
Short, Medium, and long term
There are 3 methods of Planning; what are they?
Top-Down- corporate headquarters develops and provides guidelines
Bottom-up- lowest levels inform top management of what they expect to do
Iterative- combines aspects of Top-down and bottom up plannnig
Strategic managment has replaced older planning processes and changes have been made in three areas; what are they?
- Who does the planning
- How it is done
- Contents of Plan
