ISDS CH 2 Notecards

Question 1

globalization

Answer 1

increased economic integration and interdependence of countries

Question 2

what does globalization cause?

Answer 2

orgs to hastily extend their distribution channels and supply chains globally; innovative strategies where firms compete not just with their own expertise but with talent in the entire global chain

Question 3

6 reasons domestic business operations decide to change to some form of international operation

Answer 3

1) improve the supply chain
2) reduce costs and exchange rate risk
3) improve operations
4) understand markets
5) improve products
6) attract and retain global talents

Question 4

Cultural and ethical issues with globalization

Answer 4

what one country’s culture deems acceptable may be considered unacceptable or illegal in another

Question 5

definition of mission:

Answer 5

purpose or rationale for an organization’s existence

Question 6

what does a mission do

Answer 6

provides boundaries and focus for organizations and the concept around which the firm can rally; functional area (major disciplines required by the firm)

Question 7

definition of strategy:

Answer 7

how an organization expects to achieve its missions and goals

Question 8

Firms achieve missions in 3 conceptual ways:

Answer 8

1) differentiation
2) cost leadership
3) response

Question 9

competitive advantage:

Answer 9

creation of a unique advantage over competitors

Question 10

differentiation (type of competitive advantage):

Answer 10

distinguishing the offerings of an organization in a way that the customer perceives as adding value; going beyond both physical characteristics and service attributes

Question 11

experience differentiation:

Answer 11

engaging a customer with a product through imaginative use of the 5 senses so the customer “experiences” the product

Question 12

low cost leadership:

Answer 12

achieving maximum value, as perceived by the customer

Question 13

competing on response:

Answer 13

set of values related to rapid, flexible and reliable performance

Question 14

resources view:

Answer 14

method managers use to evaluate the resources at their disposal and manage/ alter them to achieve competitive advantage

Question 15

value- chain analysis:

Answer 15

a way to identify those elements in the product/ service chain that uniquely add value

Question 16

5 forces model:

Answer 16

method of analyzing the 5 forces in the competitive market

Question 17

5 forces in the competitive market:

Answer 17

immediate rivals, potential entrants, customers, suppliers and substitute products

Question 18

SWOT analysis:

Answer 18

method of determining internal strengths and weaknesses and external opportunities and threats; idea is to maximize opportunities and minimize threats in the environment while maximizing the advantage of theory’s strengths and minimize weaknesses

Question 19

Events of SWOT analysis

Answer 19

1) analyze the environment
2) determine the corporate mission
3) form a strategy

Question 20

key success factors (KSFs):

Answer 20

activities/ factors that are key to achieving competitive advantage

Question 21

core competencies:

Answer 21

set of skills, talents and capabilities in which a firm is particularly strong

Question 22

outsourcing:

Answer 22

transferring a firm’s activities that have traditionally been internal to external supplies

Question 23

Expansion is accelerating due to 3 global trends

Answer 23

1) increase tech expertise
2) more reliable and cheaper transportation
3) rapid development and deployment of advantage in telecommunication and computers

Question 24

theory of comparative advantage:

Answer 24

theory which which states that countries benefit from specializing in (and exporting) goods and services in which they have a relative disadvantage

Question 25

risks of outsourcing

Answer 25

half of all outsourcing agreements fail because of inadequate planning and analysis planning and analysis; financing, people skills and availability, general business environment

Question 26

Other issues of outsourcing

Answer 26

1) decreased employment levels
2) changes in facility requirements
3) potential adjustments to quality control systems and manufacturing processes
4) expanded logistics issues, including insurance, tariffs customs and timing

Question 27

Potential advantages of outsourcing

Answer 27

-cost savings
- gaining outside expertise that comes with specialization
- improving operations and service
- maintaining focus on core competencies
- accessing outside technology

Question 28

Potential disadvantages of outsourcing

Answer 28

• increased logistics and inventory costs
• loss of control (quality, delivery, etc.)
• potential creation of future competition
• negative impact on employees
• risks may not manifest themselves for years

Question 29

factor-rating method:

Answer 29

provides an objective way to evaluate outsource providers

Question 30

international business:

Answer 30

firm that engages in cross- border transactions

Question 31

multinational corporations (MNC):

Answer 31

firm that has extensive involvement in international business, owning/ controlling facilities in more than one country