International Business Strategy
Exam Answer Key
Course Introduction
International Business Strategy explores the frameworks and approaches organizations use to compete and succeed in the global marketplace. This course covers the analysis of international environments, including economic, political, and cultural factors, and examines how firms develop and implement effective strategies for entering and operating in diverse international markets. Students will learn about global industry dynamics, international competitive advantage, cross-border mergers and acquisitions, international alliances, and risk management. Real-world case studies and practical examples are used to develop strategic thinking and decision-making skills crucial for managing multinational enterprises in a rapidly changing world.
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Strategic Management Concepts BRV 1st Edition by
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Page 2
Jeffrey H. Dyer
Chapter 1: What Is Business Strategy?
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Q1) A company's primary purpose that often specifies the business or businesses in which the firm intends to compete -or the customers it intends to serve-refers to its
Answer: mission
Q2) Katherine is the CEO of a car dealership company called Red Cars.When looking for new investors for the company, she usually says that Red Cars wants to, "Be the best automotive retailer in the eyes of its customers, employees, and shareholders." Which of the following does this statement best reflect?
A) Red Cars' mission
B) Red Cars' strategy
C) Red Cars' capabilities
D) Red Cars' resources
Answer: A
Q3) What is the next step in the strategic management process that a company should take after identifying prospective markets?
Answer: The next step in the strategic management process after identifying prospective markets is attempting to decide what unique value is to be offered in those markets.
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Chapter 2: Analysis of the External Environment: Opportunities and Threats
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Sample Questions
Q1) Competition among firms within an industry best defines the term _____.
A) substitute
B) threat
C) rivalry
D) opportunity
Answer: C
Q2) Zenith Corp., a bag company, produced a lot of high-end leather bags than could be sold in the market for a year.The leather bags eventually wore out and were not fit to be sold, thus causing huge losses for that year.Which of the following did Zenith Corp.most probably experience during that year?
A) Use of full production capacity
B) Unused production capacity
C) High exit barriers
D) Special sales incentives
Answer: A
Q3) How do switching costs affect industry rivalry?
Answer: The lower the switching costs, the easier it is for competitors to poach customers, thereby increasing industry rivalry.
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Chapter 3: Internal Analysis: Strengths, Weaknesses, and Competitive Advantage
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Q1) Neptune LLC is a company that manufactures electronic products.Its employees are given specific guidelines regarding the resources and capabilities that they should invest their company's money and time in.The employees are expected to follow these guidelines during Neptune's lean as well as peak seasons.Which of the following terms best reflects the guidelines that the employees of Neptune LLC are expected to follow?
A) Capabilities
B) Assets
C) Priorities
D) Attributes
Answer: D
Q2) What is an asset and how does it create an economic value to an organization?
Answer: Assets are tangible or intangible resources or factors of production that create economic value for the firm when employed.Most resources are, or could be, counted and quantified on a firm's balance sheet as assets.Accountants classify resources as tangible or intangible assets.It enables the firm to conceive of and implement strategies that improve its efficiency and effectiveness.
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Chapter 4: Cost Advantage
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Q1) Mercury Corp., a startup company, is sure that it will achieve a steep curve of 75 percent as it is selling a unique product that has not been introduced into the market before.The company is confident that this product will be sold at a fast rate due to two reasons: the product is a necessity in every home and it is a break-through solution.Mercury sees this product as helping the company grow at a fast pace.Which of the following strategies has Mercury Corp.adopted?
A) The growth/investment strategy
B) The pricing strategy
C) The cost-management strategy
D) The acquisition strategy
Q2) TrueBiz Corp.follows a system wherein all the activities of the company are directed toward converting parts of a product into an entire finished good.These activities are done in tandem so that a perfected product can be created which can be sold to a prospective customer.This is an example of a _____.
A) supplier chain
B) value chain
C) product line
D) pricing chain
Q3) Define the cost advantage strategy and its characteristics.
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Chapter 5: Differentiation Advantage
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Q1) Rita lives in a dorm with other students of her college.She hesitates to buy furniture owing to lack of space.She wants to buy a new study desk, one that can easily fold away and be dismantled so that it doesn't occupy much space when not in use.What is Rita's main concern?
A) How to use the product
B) How to store the product
C) How to assemble the product
D) How to locate the product
Q2) Explain product differentiation.
Q3) What are the three ways in which product features can be offered for the purpose of differentiation?
Q4) When firms rely on brand image to differentiate products, some of them associate their products with positive qualities in the minds of customers.These are known as
A) prestige brands
B) convenient brands
C) utility brands
D) functional brands
Q5) _____ is grouping customers based on similar needs.
Q6) What is customer segmentation? Mention the three types of customer segmentation.
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Chapter 6: Corporate Strategy
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Q1) Which of the following is a defining feature of firms that practice related-constrained diversification?
A) They earn more than 70 percent of their revenues from their main line of business and the rest from businesses located along the value chain.
B) They earn less than 70 percent of their revenues from their main line of business and their other lines of business share product, technological, and distribution linkages with the main business.
C) They operate in related markets, but fewer linkages exist between the new and existing markets than the elements create separately.
D) They earn more than 95 percent of the revenues from a single line of business.
Q2) The search for competitive advantage within a single industry, market, or line of business best defines the term _____.
A) complementary service strategy
B) corporate strategy
C) business unit strategy
D) cost advantage strategy
Q3) What is a greenfield entry? When should a company use it?
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Chapter 7: Vertical Integration and Outsourcing
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Q1) Vertical integration can be best defined as:
A) breaking a large process into smaller tasks that require specialized knowledge.
B) bringing business processes or activities previously conducted by outside companies in-house.
C) a graphic representation of the relationship between cost per unit of a product and its scale of production.
D) the sequence of all activities that are performed by a firm to turn raw materials into a finished product.
Q2) The process where a firm contracts out a business process or activity to an external supplier is known as _____.
A) outsourcing
B) vertical integration
C) horizontal diversification
D) market penetration
Q3) Briefly state the difference between outsourcing and insourcing.
Q4) As a danger of vertical integration, a(n) _____ refers to the fact that the more different types of activities a firm needs to manage, the harder it is to be world class in all of those activities.
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Chapter 8: Strategic Alliances
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Q1) Explain the different ways through which a firm can create value in an alliance.Support your answer with suitable examples.
Q2) Plateus Inc., a software company, has a website that gives detailed information about partnering processes for firms that seek collaboration with Plateus.Plateus describes the terms and conditions of different grades of partnership on its website, allowing potential partners to choose which level fits them best.Through this measure, Plateus seeks to primarily achieve _____.
A) organized alliance-management knowledge
B) increased external visibility
C) low transaction costs
D) increased profits
Q3) Two organizations that are positioned at different stages along the value chain form an alliance.The contract includes the conditions under which the contract will be closed and the consequences of closure for each partner.Which of the following clauses specifies the above conditions?
A) Preemption rights clauses
B) Voting rights clauses
C) Termination clauses
D) Noncompete clauses
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Chapter 9: International Strategy
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Q1) Which of the following is a disadvantage of exporting as a mode for entering a foreign market?
A) It increases the cost of selling in the foreign market.
B) It does not work when the product adaptation required is minimal.
C) It cannot work with distribution networks in the foreign market.
D) It involves heavy investment in the foreign country.
Q2) With respect to distance between a foreign and a domestic market, administrative distance is likely to be more when the new market:
A) uses the common law system used in the Anglo sphere.
B) has not been part of the colonizer/colony network.
C) uses the same currency as the domestic market.
D) does not belong to a different trade bloc.
Q3) Write a note on cultural distance.
Q4) Explain the ways to manage variation and successfully pursue a multidomestic strategy.
Q5) _____ is the need to tailor an organization's products, marketing, and distribution strategies to the local customers in a foreign country.
Q6) The spread of businesses across national borders is called _____.
Q7) Explain why firms choose to compete in international markets.
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Chapter 10: Innovative Strategies That Change the Nature of Competition
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Q1) Which of the following statements is true of mass customization?
A) It is the best option when products need to be customized from start to end.
B) It works best if a product can be broken into modules that offer different features.
C) It does not need the additional costs of creating need-specific components.
D) It does not require standard core components to be produced in large scale.
Q2) Pearl Corp., a manufacturer of dental equipment, creates a new instrument.With the experience it has in creating small equipment required for dental surgeries, it customizes the new tool to be more accurate and effective.It also comes with an improvised handle.Which of the following innovations has Pearl adopted in this scenario?
A) An altered innovation
B) An incremental innovation
C) A radical innovation
D) A progressive innovation
Q3) Groups of people who share similar needs and thus are likely to desire the same features in a product are called _____.
Q4) What is a business model? Briefly explain the revenue model.
Q5) Explain mass customization with an example.
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Q6) Creating new demand in an uncontested market space is called the _____.
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Chapter 11: Competitive Strategy
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Q1) An analysis that breaks down the structure of a market or industry into its constituent groups is called a(n) _____.
Q2) Alex, the CEO of a manufacturing company, is asked by the board if he will consider switching strategic groups.However, Alex thinks it might not be advisable.Which of the following statements strengthens Alex's belief?
A) Marketers will be more able to identify rivals if they switch to another strategic group.
B) The customers of his company are not brand conscious and loyal.
C) His company has tough competition from firms outside their strategic group.
D) His company has rigid systems, which have been in place for many years
Q3) An airline service provider watches its rivals closely.It studies the potential for reliable, timely, and service-oriented international travel offered by its competitors.In this case, the firm is focusing on the competitors' _____.
A) resources and capabilities
B) objectives
C) organizational structure
D) market risks
Q4) Briefly describe competition under monopoly.
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Chapter 12: Implementing Strategy
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Questions
Q1) Robinson Inc., a manufacturer of smartphones, focuses on moving from its one set of strategic plans to another by increasingly engaging itself with customer services.It feels that it is important to increase the quality of products to increase and retain its customer base.Which of the following phases of organizational change is exemplified in this case?
A) Unfreezing
B) Hard triangle
C) Changing
D) Refreezing
Q2) A well-established pharmaceutical company has built a number of mechanisms to promote innovation.As part of this initiative, it provided an opportunity to its employees to work on projects that interest them.It also arranged for a weekly brainstorming session to gather and consolidate innovative ideas and approaches.This is an example of _____.
A) empowering individuals
B) building a guiding coalition
C) creating a response profile
D) communicating a vision
Q3) Write a note on the structure of the 7 S model of organizational alignment.
Q4) What are the eight steps to successful change?
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Chapter 13: Corporate Governance and Ethics
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Q1) ShopEazy Inc.operates a chain of supermarkets.The managers and employees of the company have been on strike for months due to their differences with its owners.As a result, the share price of the company has fallen to a historic low.Zeltro Investments decides to purchase a majority of ShopEazy's shares, confident that it can manage the company better.In this scenario, Zeltro Investments can be best categorized as a(n)
A) corporate raider
B) venture capitalist
C) secondary stakeholder
D) angel investor
Q2) How did the general-purpose corporations formed in the twentieth century grow?
A) By allowing investors to run the corporation
B) By relying on investors to run the corporation
C) By selling products and services to the investors at reduced prices
D) By offering investors a share of ownership in the company, or stock
Q3) A _____ is a formal declaration of a company's core values, business objectives, and ethical aspirations.
Q4) Describe two of the arguments used by participants of debates about ethics.
Q5) Explain the difference between the shareholder primacy model and the stakeholder model.
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Chapter 14: Strategy and Society
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Q1) Which of the following statements is true of the skills of social entrepreneurs?
A) A social constructor agitates for change and focuses on designing more effective social systems.
B) A social engineer focuses primarily on developing new products or services with the intent of building capacity.
C) A social bricoleur is of primary importance in organizations focusing on capacity building.
D) A social constructor combines existing resources for value creation with the intent of institutional change.
Q2) John works for Roth Inc., a mining firm, which strictly adheres to the employment rules as prescribed by the labor commission.The firm employs individuals only above the age of 23 for occupations that could pose safety hazards.In this scenario, which of the following social responsibilities is fulfilled by Roth?
A) Philanthropic responsibility
B) Economic responsibility
C) Legal responsibility
D) Superordinate responsibility
Q3) Differentiate between institutional change and capacity building.
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