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the way firms make choices about acquiring and using scarce resources in order to achieve their international objectives

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international strategy

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the ability of a company to have higher rates of profits than its competitors

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competitive advantage

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international strategy involves decisions that deal with ____________ to offer, which __________ to enter, and how to __________.

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products or services, markets, compete

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to be effective a company's international strategy needs to be consistent among the various functions, products, and regional units of the company.

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internal consistency

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to be effective a company's international strategy needs to be consistent with the variety of demands associated with operating in the international competitive environment.

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external consistency

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skills or abilities required in order to adequately complete a task. to a create competitive advantage that is sustainable over time the international company should try and develop these type of skills.

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competencies

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T/F resources, time, talent, and money are always scarce.

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true

question

process by which an organization determines where its going in the future, how it will get there, and how it will assess whether and to what extent it has achieved its goals.

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strategic planning

question

the process of strategic planning provides a formal structure in which: (7)

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(1) managers analyze the company's external environment, (2) analyze the company's internal environment, (3) define the company's business and mission, (4) set corporate objectives, (5) quantify goals, (6) formulate strategies, (7) make tactical plans.

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an assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations, intended to determine where and to what extent value is added to the final product or service

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value chain analysis

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the practices that organizations and their managers use for the identification, creation, acquisition, development, dispersion, and exploitation of competitively valuable knowledge.

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knowledge management

question

knowledge that an individual has but that is difficult to express clearly in words, pictures, or formulae, and therefore difficult to transmit to others.

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tacit knowledge

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knowledge that is easy to communicate to others via words, pictures, formulae, or other means.

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explicit knowledge

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broad statement that defines the organization's purpose and scope

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mission statement

question

a description of the company's desired future position if it can acquire the necessary competencies and successfully implement its strategy

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vision statement

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a clear and concise description of the fundamental values, beliefs, and priorities of the organization's members

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values statement

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action plans to enable organizations to reach their objectives

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competitive strategies

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when developing and assessing strategic alternatives it is important to remember that companies competing in international markets confront two opposing forces:

answer

reduction to costs and adaptation to local markets

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Low pressure to reduce costs, low pressure for local adaptation. international competitive strategy: central development then transfer abroad. duplicate manufacturing. companies typically centralize product development functions in their home country. after they develop differentiated products in the home market, these innovations are then transferred to foreign markets in order to capture additional value.

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home replication strategy

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low pressure to reduce costs, high pressure for local adaptation. international competitive strategy: adapt locally. lost of distinctiveness. used when there is strong pressure for the company to adapt its products or services for local markets. decision making tends to be more decentralized in order to allow the company to modify its products and to respond quickly to changes in local competition and demand.

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multidomestic strategy

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high pressure to reduce costs, low pressure for local adaptation. international competitive strategy: standardize across the firm. centralized value chain to achieve economies of scale. strategy and decision making are typically centralized at headquarters, and the company tends to offer standardized products and services.

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global strategy

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international competitive strategy: high pressure to reduce costs, high pressure for local adaptation. used when there is a potential for competitive advantage from responding to both of these two divergent forces. the location of a company's assets and capabilities will be based on where it would be most beneficial for each specific activity, neither highly centralized as with a global strategy nor widely dispersed as with a multidomestic strategy. complex strategic decisions. upstream value chain activities are more centralized. downstream activities are more decentralized, located closer to the customer.

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transnational strategy

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multiple, plausible stories about the future

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scenarios

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plans for the best or worse case scenarios or for critical events that could have a severe impact on the firm

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contingency plans

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requisite for spelling out in detail how the objectives will be reached. very specific, short term means for achieving goals.

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tactical/operational plans

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two prominent features of the strategic plan are:

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sales forecasts and budgets

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a prediction of future sales performance

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sales forecast

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an itemized projection of revenues and expenses for a future time period

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budget

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two of the most important plan implementation facilitators that management employs are:

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policies and procedures

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broad guidelines intended to assist lower level personnel in handling recurring issues or problems

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policies

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specified ways of performing a particular task or activity.

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procedures

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a key part of strategic planning is:

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measuring performance

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assesses whether the strategy and its implementation are proceeding successfully or whether modifications may need to be made.

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performance measures

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Kinds of strategic plans: (2)

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time horizon, level in the organization

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although strategic plans may be classified as short, medium, or long term, there is little agreement about the length of these periods.

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time horizon

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each organizational level of the company will have its level of plan. In addition the functional areas at each level will have their own plans and sometimes will be subject to the same hierarchy, depending mainly on how the company is organized.

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level in the organization

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methods of planning: (3)

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top down planning, bottom up planning, iterative planning

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planning process that begins at the highest level in the organization and continues downward

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top down planning

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planning process that begins at the lowest level in the organization and continues upward

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bottom up planning

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repetition of the bottom up or top down planning process until all differences are reconciled.

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iterative planning

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combines strategic thinking, planning, and strategic implementation and which is increasingly recognized as a fundamental task of line management rather than merely specialized planners in staff positions.

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strategic management approach

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strategic planning has replaced older planning processes and changes have been made in 3 areas:

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who does the planning, how it is done, and the contents of the plan.

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T/F: The value chain refers to the set of value-creating activities that the company is involved with, ranging from sourcing of basic raw materials to the delivery of final product or service.

answer

true

question

T/F: The extent of local customization of product offerings tends to be limited for a company pursuing the home replication strategy.

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true

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T/F: Strategic planning is done in seclusion and only by the company's most senior executives.

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false

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The ability of a company to have higher rates of profit than its competitors is termed as _____. contingency planning competitive advantage profitability analysis global strategic planning

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competitive advantage

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Some companies centralize product development functions in their home country. After they develop differentiated products in the home market, the innovations are transferred to foreign markets in order to capture additional values. What is this strategy called? Multidomestic strategy Home replication strategy Global strategy Transnational strategy

answer

home replication strategy

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The knowledge of an individual that is difficult to express clearly and therefore difficult to transmit to others is called _____ knowledge. procedural explicit descriptive tacit

answer

tacit

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Which of the following defines the purpose for a company's existence, including its business objectives, and approach for reaching those objectives? The value statement The mission statement Competitive strategy The vision statement

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mission statement

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_____ are broad guidelines issued by upper management for the purpose of assisting lower-level managers in handling recurring problems. Budgets Plans Procedures Policies

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policies

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_____ is concerned with the way firms make fundamental choices about developing and deploying scarce resources globally. Value chain analysis Budgeting International strategy Competitive advantage

answer

international strategy

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The top management of companies generally accepts the fact that, to be effective, strategic planning processes should permit: mainly the CEO and the head of planning to devise a corporate plan. projections to be based on historical conditions and performance. ideas to surface from anywhere in the organization and at any time. specialized planners in staff positions to formulate plans in seclusion.

answer

ideas to surface from anywhere in the organization and at any time.

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_____ is 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. Competitive advantage Profitability analysis Budgeting Strategic planning

answer

strategic planning

question

When a company is under strong pressure to adapt its products or services for local markets, it uses a _____ strategy. global transnational multidomestic home replication

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multidomestic

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List the following strategic planning steps in order from first to last: define business, quantify goals, internal analysis, tactical planning, formulate strategies, external analysis, set objectives.

answer

external analysis, internal analysis, define business, set objectives, quantify goals, formulate strategies, tactical planning

question

T/F: many top execs feel marketing strategies are best determined locally because of local environmental differences.

answer

true

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