Test Flashcards
- When internationalisating companies are subject to some conflicting, opposing forces:
The need to manage investments (cost), coordinate decisions and adapt to local
tastes. So it is about localising vs standardising (efficiency)
The need to manage decisions, delegate decisions and adapt to local tastes
None of the rest
The need to manage sales, coordinate decisions and study local tastes
The need to manage investments (cost), coordinate decisions and adapt to local
tastes. So it is about localising vs standardising (efficiency)
- When internationalisating companies are subject to some conflicting, opposing forces:
The need to manage investments (cost), coordinate decisions and adapt to local tastes. So it
is about localising vs standardising (efficiency)
The need to manage decisions, delegate decisions and adapt to local tastes
None of the rest
The need to manage sales, coordinate decisions and study local tastes
The need to manage decisions, delegate decisions and adapt to local tastes
- Choose the right statement with regards to strategy and structure:
Structure always follows strategy
They are not directly related but a manager has to fix both
Structure is more important than strategy
Strategy always follows structure
Strategy and Structure are interconnected in a two way (reciprocal) relationship
Strategy and Structure are interconnected in a two way (reciprocal) relationship
- Gemawat’s CAGE framwork has 4 dimensions, what are they?
Culture, Administration, Geography, Economic
Culture, Authority, Geography, Economic
Competition, Authority, Geography, Equivalence
None of the rest
Culture, Administration, Geography, Economic
- What term is used for a situation where a company has diversified beyond its current
products and markets, but within its existing capabilities?
Synergy
Stretched capability
Related diversification
Market penetration
Related diversification
- According to Hofstede, Masculinity/Femininity dimension of culture refers to:
The different sports countries play
The different and diverse values that a country or culture may consider important
Competiton and cooperation
None of the options
The different and diverse values that a country or culture may consider importan
- Which of the following best defines a Strategic Business Unit (SBU)?
A corporation’ autonomous division that has its own manager and its own budget
An organisation’s ability to develop and change its competences
A product line independent from the mother company
A new venture created to exploit vertical integration synergies
A corporations’ independent subsidiaries across different countrie
A corporation’ autonomous division that has its own manager and its own budge
- Which of the following best defines a Strategic Business Unit (SBU)?
A corporation’ autonomous division that has its own manager and its own budget
An organisation’s ability to develop and change its competences
A product line independent from the mother company
A new venture created to exploit vertical integration synergies
A corporations’ independent subsidiaries across different countrie
A corporation’ autonomous division that has its own manager and its own budget
- Choose the right statements below discussing the difference between
differentiation and diversification? (there is more than one correct answer)
Through diversification a company creates a new product line and by differentiation
approach it decides to provide a unique approach upon a price premium
Differentiation is a competitive level strategy
Diversification is a corporate level strategy
Diversification deals with the creation of a new Strategic Business Unit into a new
market
Differentiation is a competitive level strategy
Diversification is a corporate level strategy
- According to the Strategic Clock theory an organisation:
Can move from low cost towards differentiation strategy but not suggested to do
the opposite
Builds a competitive advantage based on reducing costs ‘‘around the clock’’
constantly
Rock around the clock (it’s like dancing) – honestly now, do not choose me
Can move from differentiation to low cost strategy but not suggested to do the
opposite
Should change its strategies in frequent intervals like a clock
Can move from low cost towards differentiation strategy but not suggested to do
the opposite
- Which of the TWO following are (or were) good examples of a Blue Ocean
Strategy?
Ferrari Cars
Gucci Handbags
AirBnB (the company that connects people who need a short stay with people that
have a place to rent)
Cirque du Soleil
Emirate Airlines
AirBnB (the company that connects people who need a short stay with people that
have a place to rent)
Cirque du Soleil
- Corporate strategy deals with (there is more than one correct answer):
The ability of a corporation to create or acquire new SBUs
Deciding in which markets a corporation should operate or not
Highest level of decision making
The ability of a corporation to create a synergy effect with its SBUs (Strategic
Business Units)
Making decisions on low cost and differentiation approaches
The ability of a corporation to create or acquire new SBUs
Deciding in which markets a corporation should operate or not
Highest level of decision making
The ability of a corporation to create a synergy effect with its SBUs (Strategic
Business Units
- Choose the one most important issue as to why an horizontal integration might
fail:
Incompatible and different cultures of the two companies
Lack of proper planning
Poor valuation of the merger/acquisition
Poor implementing skills
Poor valuation of the merger/acquisition
- Differentiation means:
A firm has an opinion about buyer power that differs from the opinion of its main
competitor
A firm merely strives to make its product offerings differ from those of its
competitors
A firm strives to make its product offerings differ from those of its competitors,
under the premise that customers value this difference. For that reason they are
willing to pay a price premium.
A firm strives to achieve a difference between its own profitability compared with the
profitability of its main competitor
A firm strives to make its product offerings differ from those of its competitors,
under the premise that customers value this difference. For that reason they are
willing to pay a price premium.
- In terms of foreign market entry, creating a wholly owned subsidiary implies:
High levels of risk
High levels of control
High levels of commitment
All of the above
All of the above
- Which of the following THREE are Corporate Growth Strategies ?
Differentiation
Vertical Integration
Strategic Alliance
Rectification
Horizontal Integration
Divesture
Market Penetration
Vertical Integration
Horizontal Integration
Market Penetration
- The usefulness of Evaluation Tools is that…(TWO correct answers):
Actually, they are not that useful; it is sufficient for firms to analyse the internal
environment (resource-based view) and the external environment (Porter)
They help decision-makers to reflect even after a strategy has been implemented
and the success or failure has become evident
They help decision-makers to look ahead, before a strategy is to be rolled out
None of the above
Pfff, sick and tired of this test. If you choose me , you lose about 1.4 points but you
do it consciously as an act of mini rebelion.
Seriously, were you actually attracted by the above argument? Don’t choose me.
They help decision-makers to reflect even after a strategy has been implemented
and the success or failure has become evident
They help decision-makers to look ahead, before a strategy is to be rolled out
- How did Ryanrair become the third most profitable airline in the world?
By business process re-engineering and maximising capacity utilisation
By allowing customers to choose their own seats on the flight rather than having an
allocated seat number
By maintaining a social and environmental strategy
By centralising head office jobs and combining employee roles to improve staff
efficiency
By business process re-engineering and maximising capacity utilisation
- Inertia seems to be a major reason of why companies and people do not want to
change. This is because inertia is:
It keeps people hyper-active and makes them unable to think or reflect
Is what Millennials are after so as to have a meaningful but easy life
See the movie ‘‘Scrooged’‘-really nice for Christmas.
Causing us the illusion of safety and makes it difficult to perceive anything outside
our ‘‘bubble’’ of reality.
It helps you control everything
Causing us the illusion of safety and makes it difficult to perceive anything outside
our ‘‘bubble’’ of reality.
- Tesla has recently announced plans to open a factory in China, to sell Tesla
electric vehicles to Chinese customers. The factory will be wholly owned by Tesla
and paid for by Tesla’s international investors. The entry mode that best describes
Tesla’s international China strategy is:
Wheeling and dealing
Foreign direct investment (FDI)
Exporting
Licensing
Joint ventures and alliances
Foreign direct investment (FDI)
- Horizontal integration is:
Smile, you are doing ok- don’t worry.
Development into activities concerned with the outputs from the company’s current
business
Development into activities that are not related with the inputs into the company’s
current business
Differentiation of products and services according to a price premium.
Development into activities which are competitive (or even complementary) to the
present activities
Development into activities concerned with the outputs from the company’s current
business
- In simple words, what is strategy (choose all that apply)?
A course of action for achieving an organisation’s purpose
Strategy can only be about eliminating competition
Strategy is a course on my program of study (yes, I am correct as well)
What to achieve, and how to get there
A course of action for achieving an organisation’s purpose
What to achieve, and how to get there
- Which TWO of the following reasons (benefits) explain why unrelated
diversification strategy is useful?
To exploit financial synergies
Where there is great business unit complexity
To spread the investment risk
Where it can also forward integrate
A great idea by the manager
To exploit financial synergies
To spread the investment risk
- What are the THREE key issues that need to be dealt when downsizing?
Making sure that there are no mistakes in the process
Stabilizing the situation soon after the implementation
Making the decision
Implementing it
Ensuring that all the older employees are leaving the company
Stabilizing the situation soon after the implementation
Making the decision
Implementing it
- What type of integration occurred when Google (think of the SBU of Android
operating system) acquired Motorola (as a producer of mobile phones)?
Organic
Horizontal
Related
A fantastic one
Vertical
Horizontal
- Forever 21 fast fashion chain competes against other bricks-and-mortar players
(including Zara, H&M, GAP) using a business unit strategy with large economies of
scale is best described as:
Differentiation
Low cost
Focused low cost
Blue ocean
Focused differentiation
Low cost
- Apple launched the Watch product range some years ago as new SBU for their
existing customers. The part of their corporate strategy that best describes this
launch was:
Related diversification
Market penetration
Product development
Market development
Unrelated diversification
Product development
- In which situation is it possible to follow a focused differentiation strategy?
When the perceived added value to a niche, small, profitable segment of the market
justifies the price premium
Where the market cannot be segmented
Where there is no risk of a price war
When the user perceives added value and market share can be increased without a
price premium
When the perceived added value to a niche, small, profitable segment of the market
justifies the price premium
- Tesla’s electric SUV car is best described as part of a business unit strategy
involving elements of unique value but for a small profitable segment which implies:
Focused low cost
Blue ocean
Low cost
Differentiation
Focused differentiation
Focused differentiation
- When having a matrix structure for an organisation:
We succeed in creating a blue ocean strategy that no-one can imitate
We ensure fast decision making and less mistakes in strategy implementation
We ensure fairness of treatment of employees but experience delays in decision
making and problems due to different expectations from every manager
We achieve less bureaucracy and higher levels of complexity
We ensure fairness of treatment of employees but experience delays in decision
making and problems due to different expectations from every manager
- Diversification often fails because (choose all that apply):
Incompatible corporate cultures
Porter was wrong and provided unhelpful tools for managers deciding whether to
diversify
Managers do not understand or overestimate the new markets and industries their
companies try to enter
Resources and capabilities do not align across the corporation
Incompatible corporate cultures
Managers do not understand or overestimate the new markets and industries their
companies try to enter
Resources and capabilities do not align across the corporation
- Which of the following approaches is a ‘‘Transnational’’ type of
internationalisation strategy?
High Global Cost Efficiency - High Local Responsiveness
Low Global Cost Efficiency - High Local Responsiveness
Low Global Cost Efficiency - Low Local Responsiveness
High Global Cost Efficiency - Low Local Responsiveness
High Global Cost Efficiency - High Local Responsiveness
- After BCG Matrix, we now have the MACS (Market Activated Corporate Strategy)
framework:
A portfolio management technique that help us understand how the corporate
headquarters manage their SBUs within a market (SBU=Strategic Business Unit)
An analysis of the company’s internal environment
A tool to forecast future profitability of a corporate strategy
A new form of strategy that allows for better control
A great socializing platform for top managers
A portfolio management technique that help us understand how the corporate
headquarters manage their SBUs within a market (SBU=Strategic Business Unit)
- Blue Ocean Strategy:
Creates an uncontested space where competition is becoming irrelevant.
Creates a new value proposition that despite the direct competition you can be
extremely successful as a company.
Is another form of differentiation.
Is a theory that allows us to evaluate better than the 5 forces the industry’s
attractiveness and profitability.
Blue Oceans is an illussion created by the simulation that we live in.
(seriously, don’t choose me)
Creates an uncontested space where competition is becoming irrelevant.
- Which are the two axes (dimensions) of the BCG matrix?
Growth of the market and Market share
Growth and Attractiveness
Long term market attractiveness and SBU strength
Value creation of the business unit and the Corporate parent’s ability to take
advantage of this value
Beauty and intelligence
Growth of the market and Market share
- Caution Strategy (or Cautious Steps ) is a Corporate Stability Strategy that:
Is essential to understand highly turbulent markets and help the corporation
operate in them by deploying many small investment projects.
Is essential for quick corporate growth in developing markets.
Enables the company to predict the future of an industry.
Helps support human competence , create well-paid jobs, and value for the
employees
Makes the managers relax and think very carefully the strategy formulation process
in order to avoid any mistake in the implementation process.
Is essential to understand highly turbulent markets and help the corporation
operate in them by deploying many small investment projects.
- Which of the following approaches is a ‘‘Global’’ type of internationalisation
strategy?
High Global Cost Efficiency - Low Local Responsiveness
Low Global Cost Efficiency - Low Local Responsiveness
High Global Cost Efficiency - High Local Responsiveness
Low Global Cost Efficiency - High Local Responsiveness
High Global Cost Efficiency - Low Local Responsiveness
- Which of the following is NOT an example of a political risk?
Civil unrest
Government regulations
War
Cost of production
Cost of production
- Bargaining power of Suppliers is an example of a factor that falls within the
_________ environment /micro analysis
Industry
Operating
Economic
Remote
Industry
- According to Porter’s forces framework: Access to distribution channels is a
major source of which competitive force?
Bargaining power of suppliers
Threat of new entrants
Bargaining power of buyers
Threat of substitute products
Threat of new entrants
- According to Value Chain a Constellation of Value is when
Two or more companies draw competitive value chains and the competition in the
market increases. This process is creating higher quality products in competitive
prices for the customers thus higher value
Two or more companies merge together and create a new company with a large
value chain that is more efficient
Two or more companies can align their value chains so as to have a synergistic
effect and create extra value from collaborating effectively. Like a business
ecosystem
Two or more companies decide to create a cartel /oligopoly to dominate the market
without letting competitors know about it
Two or more companies can align their value chains so as to have a synergistic
effect and create extra value from collaborating effectively. Like a business
ecosystem
- The external environment analysis is divided into:
Macro and Internal
Macro and Micro
Macro, Micro and SWOT
Macro and OT part of SWO
Macro and Micro
- Which of the following statements best explains the value chain model?
The value chain explains how value is created in the industry supply chain
The value chain is a model for evaluating the linkages between the various
departments that make up the organisation
The value chain is a model for evaluating which of an organisation’s suppliers offers
the best value for money
The value chain is a model for identifying opportunities for cost reduction and value
creation by combining primary to support activities
The value chain is a model for identifying opportunities for cost reduction and value
creation by combining primary to support activities
- According to RBV, which of the following are not part of the tangible resources?
(choose all that apply / there is more than one answer)
Human resources
Financial resources
Physical resources
Reputation resources
Human resources
Reputation resources
- According to RBV, why is ‘‘continuous improvement’’ perceived as a core
competence?
Because it is based mostly on intangible resources and other capabilities, thus
making it very hard for any competitor to imitate it quickly
Because it is easy to imitate since it is relatively quick to acquire the same resource
that lead to this capability e.g. capital, IT system and personnel with some
experience
Because it provides the competitors with precise information on how to imitate a
competitive advantage of the company that has it
Because it does not provide the company with a significant competitive advantage
Because it is based mostly on intangible resources and other capabilities, thus
making it very hard for any competitor to imitate it quickly
- PESTEL analysis: The considerations involving the beliefs, values, attitudes and
opinions of those in a firm’s environment represent the ______.
Economic factors
Personal factors
Social factors
Political factors
Social factors
- What term is used for the activities that underpin competitive advantage and are
difficult for competitors to imitate or obtain?
Threshold resources
Fantastic ideas
Unique resources
Core competences
Threshold competences
Core competences
- RBV tells us that if you really want to create core capabilities/competences as
‘continuous improvement’ then you need to:
Use tangible resources to develop them
Use other capabilities as resources
Use a variety of resources until you find the right combination
Use mostly human resources to develop them
Use other capabilities as resources
- Strong Bonds with the Suppliers is..
A threshold capability since it can be easily imitated and it does not offer any
competitive advantages
A core competence since it is based on tangible and human resources. It is easy to
imitate but it does offer competitive advantage
Is science fiction since it cannot exist in the real world – it is purely theoretical
A core competence since it takes time to develop a relationship. It is based on
intangible elements like trust, loyalty, learning and so on. It is also not easy to
imitate and it is transcendent (solves a lot of problems at the same time
A core competence since it takes time to develop a relationship. It is based on
intangible elements like trust, loyalty, learning and so on. It is also not easy to
imitate and it is transcendent (solves a lot of problems at the same time)
- Which of these, according to Porter is NOT a force driving industry competition?
Bargaining power of distributors
Threat of new entrants
Threat of substitutes
Bargaining power of buyers
Bargaining power of distributor
53.Which of the following is not part of the analysis of the micro-environment?
Threat of Substitute products
Sociocultural trends
Competitive rivalry/existing competition
Bargaining power of suppliers
Bargaining power of buyers
Sociocultural trends
- What does RBV stands for?
Rating Base Value of the company
Rate Before Value
Resource Based View of the industry
Resource Based View of the competitive advantage of the firm
Resources Basic View of the firm
Resource Based View of the competitive advantage of the firm
- Which one of the following is not considered to be a support activity of the value
chain of a firm?
Service (customer service)
Human Resources
Firm Infrastructure
Technology
Service (customer service)
- Which of the following statements best explains the RBV model?
The RBV is a model for that explains how can a company combine resources in order
to create capabilities. These capabilities can be either threshold or core. The core
capabilities should lead to competitive advantage because they are hard to imitate
The RBV explains how competitive advantage is created by creating and sustaining
core resources. These core resources are very hard to imitate by the competitors
and this leads to competitive advantage
The RBV is a model for identifying opportunities for cost reduction and value
creation by combining primary to support activities
The RBV is a model for evaluating the existing resources and capabilities. It helps
identify the singly one pathway to competitive advantage
The RBV explains how competitive advantage is created by creating and sustaining
core resources. These core resources are very hard to imitate by the competitors
and this leads to competitive advantage
- According to 5 Forces analysis: Bargaining Power of Buyers and Bargaining
Power of Suppliers..
Are always key success factors when analyzed
Are not the same forces. Actually they are not part of the 5 forces analysis. They are
part of the strategic group analysis
Are not the same forces since they have completely different structural determinants
and need to be considered as key success factors of any market analysis
Can be (but not always) key success factors of the market
Can be (but not always) key success factors of the market
- Why is it important to undertake macro-environmental analysis when the
micro-environment has more impact on day-to-day operations?
Because managers ought to be aware only of the current threats represented by
PESTEL factors.
Because understanding trends in PESTEL factors enables an organisation to deal
with changes and to get the bigger picture of the environment thus having more
diverse strategic options to explore.
Because the macro and micro analyses are two key parts of the overall company
analysis and you would have an incomplete analysis otherwise.
Because changes in the macro-environment are only barriers to the daily operations
of the organisation.
Because otherwise Macro will be jealous
Because understanding trends in PESTEL factors enables an organisation to deal
with changes and to get the bigger picture of the environment thus having more
diverse strategic options to explore.
- According to 5 Forces analysis and thinking of the airline industry in Europe
(British Airways, Air France, Lufthansa etc) a substitute is:
Other companies that offer flights both in Europe and overseas
Other companies like Norwegian or Air Italia
Other companies that offer services such as trains , cars, buses etc
Other companies that supply all raw material for the major competitors
Other companies that offer services such as trains , cars, buses etc
- According to RBV what are the 3 major types of resources every company has?
Intangible-Human-Tangible
Competitive - Dynamic - Rare
Smart - Measurable - Specific
Tangible- Aesthetic- Dynamic
Intangible-Human-Tangible
- How is ‘‘rising affluence’’ (increasing average global income) going to affect the
fast food industry?
In a positive way. Fast food market will increase since developing markets are
increasing and the number of poor people is increasing as population is increasing
as well. It can also lead to the creation of healthy fast food market
In a negative way. Fast food market will decrease. Richer people will seek higher
quality food
It will not be affected. Due to the mixed trends it will stay the same
It will stop to exist completely very soon
In a positive way. Fast food market will increase since developing markets are
increasing and the number of poor people is increasing as population is increasing
as well. It can also lead to the creation of healthy fast food market
- A threshold capability…
Is not essential since it does offer competitive advantage and cannot be easily
imitated
Is essential for the company since we need it to be able to operate but it does not
offer competitive advantage to the company
Is not essential since it supports other activities and can be easily copied by
competitors
Is essential for the company since it leads to competitive advantages
Is essential for the company since we need it to be able to operate but it does not
offer competitive advantage to the company
- The micro environment analysis refers to..?
External broader environment analysis such as political economical and social
factors
Internal Environment analysis/the company
External environment analysis, the competitive or industry or market environment
All the abov
External environment analysis, the competitive or industry or market environment
- According to Value Chain framework the value created must..?
Be created analysing precisely every activity
Be created through the right combination of resources
Be perceived by and delivered to the customer otherwise it is a waste of money
Be sustained constantly under patents
Be perceived by and delivered to the customer otherwise it is a waste of money
- Which of the following is not a Blue Ocean Strategy’s key action ?
Promote
Create
Eliminate
Reduce
Promote
- Which of the following international entry modes has the highest control level
and at the same time the highest resource commitment?
Foreign Direct Investment/Wholly Owned Subsidiary
Licensing
Franchising
Joint Ventures and Alliances
Joint Ventures and Alliances
- When it comes to managing change as crisis situations, what is ‘‘fire-fighting’’?
It is pretending to change. Fighting the effects and not the causes of a crisis
It is about changing fundamentally and transforming into something new as a
person or a company
It is about solving the actual causes of a crisis
It is about putting out the fire - solving both the effects and the causes
It is pretending to change. Fighting the effects and not the causes of a crisis
- Porter’s Diamond framework:
Explains how developing a national competitive advantage as an organisation
allows you to become successful internationally.
Helps us understand the complexity levels in a company.
Offers a better explanation of how macro trends affect a company.
Identifies value creation activities across the RBV
Is actually a useless model
Explains how developing a national competitive advantage as an organisation
allows you to become successful internationally.
Problems of swot
all (simplistic, not dynamic, subjective, not support decision making
When we do industry analysis, we look for
profitability, attractiveness, key success factors - the strongest forces from 5 forces
(+driving forces?
How does value chain work
the way we combine any primary to any support activity to 1) increase customer
value or 2) reduce operating costs or both
You can go from cost leadership to differentiation, but you should not go from
differentiation to cost leadership
(it’s strategic stupidity)
All stability corporate strategies are short-term
(apart from the caution strategy) because
there can be no long-term stability
What are the processes involved with downsizing
1) how you decide it
2) how do (implement) you do it
3) how do you live after this
What comes first strategy or structure
they are interconnected like the left foot follows the right, reciprocal connection
What is a global approach on the international level?
the ability to economize a lot when it comes to your costs but you don’t customize
your product
Which of the following is not part of Porter’s 5 Forces Framework?
A) Threat of substitutes
B) Power Suppliers
C) Rivalry among existing firms
D) Threat of Supplementary products
D) Barriers to Entry
D) Threat of Supplementary products
