International Business Strategy
Exam Solutions
Course Introduction
International Business Strategy explores the formulation and implementation of strategies by firms operating in the global marketplace. The course examines the complexities of international competition, cultural differences, and the impact of political, economic, and legal environments on business decisions. Students will analyze topics such as entry modes into foreign markets, multinational management structures, cross-border alliances, and the role of global supply chains. Through case studies and real-world examples, learners will develop critical thinking skills and strategic insights necessary to succeed in a rapidly evolving international business landscape.
Recommended Textbook
Crafting and Executing Strategy Concepts and Readings 20th Edition by Arthur Thompson
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Page 2
Chapter 1: What Is Strategy and Why Is It Important
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Sample Questions
Q1) An electronic chip manufacturer has a quarterly release of its products.What can you say about its strategy?
Answer: Industry environments characterized by high-velocity change require companies to repeatedly adapt their strategies.For example,companies in industries with rapid-fire advances in technology like medical equipment,electronics,and wireless devices often find it essential to adjust key elements of their strategies several times a year,sometimes even finding it necessary to "reinvent" their approach to providing value to their customers.
Q2) Explain in detail what a company's business model entails.
Answer: At the core of every sound strategy is the company's business model.The two elements of a company's business model are (1)its customer value proposition and (2)its profit formula.The customer value proposition lays out the company's approach to satisfying buyer wants and needs at a price customers will consider a good value.The profit formula describes the company's approach to determining a cost structure that will allow for acceptable profits,given the pricing tied to its customer value proposition.
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3
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Sample Questions
Q1) The strategy-making,strategy-executing process:
A) is usually delegated to members of a company's board of directors.
B) includes establishing a company's mission, developing a business model aimed at making the company an industry leader, and crafting a strategy to implement and execute the business model.
C) embraces the tasks of developing a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy, and then monitoring developments and initiating corrective adjustments in light of experience, changing conditions, and new opportunities.
D) is principally concerned with sizing up an organization's internal and external situation, so as to be prepared for the challenges of developing a sound business model.
E) is primarily the responsibility of top executives and the board of directors; very few managers below this level are involved in the process.
Answer: C
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4
Chapter 3: Evaluating a Companys External Environment
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Sample Questions
Q1) The "driving forces" in an industry:
A) are usually triggered by changing technology or stronger learning/experience curve effects.
B) usually are spawned by growing demand for the product, the outbreak of price-cutting, and big reductions in entry barriers.
C) are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.
D) appear when an industry begins to mature but are seldom present during early stages of the industry life cycle.
E) are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.
Answer: C
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Chapter 4: Evaluating a Companys Resources, Capabilities,and Competitiveness
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Sample Questions
Q1) External threats may pose various degrees of adversity upon the company and can surface from many sources and examples,EXCEPT for:
A) the advent of cheaper or better technologies.
B) the entry of lower-cost foreign competitors and restrictive foreign trade policies.
C) new burdensome regulations.
D) higher overall unit costs relative to those of key competitors.
E) rising prices on key inputs (such as energy costs).
Q2) SWOT analysis is a simple but powerful tool for:
A) gauging whether a company has a cost-competitive value chain.
B) sizing up a company's resources and capabilities, strengths and deficiencies, its market opportunities, and the external threats to its future well-being.
C) evaluating whether a company is in the most appropriate strategic group.
D) determining a company's competitive strength vis-à-vis close rivals.
E) identifying the market segments in which a company is strongly positioned and weakly positioned.
Q3) In conducting a SWOT analysis,is it enough to simply compile lists of the company's strengths,weaknesses,opportunities,and threats? Why or why not?
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Page 6
Chapter 5: The Five Generic Competitive Strategies
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Sample Questions
Q1) Cost-efficient management of a company's overall value chain activities requires that management:
A) ferret out cost-saving opportunities in every part of the value chain.
B) undertake an operations functionality redesign.
C) establish sales productivity and operating practices guidelines.
D) re-create rivals' assembly plant structuration savings.
E) pursue a differentiation strategy that can be easily copied.
Q2) Focused strategies keyed either to low cost or differentiation are especially appropriate for situations where:
A) the market is composed of distinctly different buyer groups who have different needs or use the product in different ways.
B) most other rival firms are using a best-cost producer strategy.
C) buyers have strong bargaining power and entry barriers are low.
D) most industry rivals have weakly differentiated products.
E) most industry participants are also using a focused differentiation strategy.
Q3) A mobile manufacturer decides to reduce the price of its latest line of smart phones,which are not the cheapest but have features that are popular among most users.Which strategy is the manufacturer using?
Q4) What are the keys to sustaining a focused low-cost strategy?
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Chapter 6: Strengthening a Companys Competitive Position
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Sample Questions
Q1) In which of the following cases are late-mover advantages (or first-mover disadvantages)NOT likely to arise?
A) When the costs of pioneering are much higher than being a follower and only negligible learning/experience benefits accrue to the pioneer
B) When the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover
C) When the pioneer's products are somewhat primitive and are easily bested by late movers
D) When opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand
E) When technological change is rapid and fast-following rivals find it easy to leapfrog the pioneer with next-generation products of their own
Q2) Identify and briefly explain what is meant by each of the following terms:
a.horizontal scope
b.vertical scope
c.scope of the firm
Q3) What are the strategic disadvantages of a forward vertical integration strategy?
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Page 8
Chapter 7: Strategies for Competing in International Markets
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Sample Questions
Q1) The reason the world economy is globalizing at an accelerated pace is because:
A) countries previously open to foreign companies have closed their markets.
B) countries that previously had market or mixed economies now embrace planned economies.
C) information technology expands the importance of geographic distance.
D) growth-minded companies are racing to build stronger competitive positions in the markets of more countries.
E) countries opposed to market or mixed economies have stringent trade barriers in place.
Q2) Identify and briefly describe a local company's strategic options in competing against global challengers.
Q3) Identify and briefly discuss the key reasons why a company may consider expanding outside its domestic market.
Q4) Briefly identify the special features of competing in foreign markets.
Q5) Under what circumstances is it advantageous for a company competing in foreign markets to disperse certain value chain activities across many countries?
Q6) When should a company choose to set up operations from the ground up?
Q7) When is a global strategy "superior" to a multidomestic strategy?
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Chapter 8: Corporate Strategy
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Sample Questions
Q1) A related diversification strategy involves building the company around businesses:
A) with strategic fit with respect to key value chain activities and competitive assets.
B) that are highly independent, proficient, and efficient operating firms.
C) with strategic fit across separate value chain activities that drive each business.
D) that can also include unrelated businesses with dissimilar resource requirements.
E) that have dissimilar value chain activities with no cross-business commonalities.
Q2) An acquisition premium is the amount by which the price offered for an existing business exceeds:
A) the fair market value of similar companies in the same geographic locale.
B) the preacquisition market value of the target company.
C) the comparable value of similar companies within the same market.
D) the amount paid as a down payment to be held in escrow until closing.
E) the difference between the amount that was offered and the amount that is escrowed.
Q3) Discuss the pros and cons of a strategy of unrelated diversification.
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Chapter 9: Ethics, Corporate Social Responsibility,
Environmental-Sustainability, and Strategy
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Q1) Which of the following is NOT generally on a company's menu of actions to consider in crafting a strategy of social responsibility?
A) Actions to ensure that the company's strategy is ethical and that ethical principles will be observed in operating the business
B) Making charitable contributions, donating money and the time of company personnel to community service endeavors, supporting various worthy organizational causes
C) Actions to look out exclusively for the best interests of its owners, the shareholders
D) Actions to protect or enhance the environment (apart from what is required by governmental authorities)
E) Actions to create a work environment that enhances employee well-being and makes the company a great place to work
Q2) Identify and explain the three schools of thought about ethical standards for companies with international operations.
Q3) Does a company have a duty to go beyond legal requirements and conform to the ethical norms of the societies in which it operates?
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Chapter 10: Building an Organization Capable of Good
Strategy Execution
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Sample Questions
Q1) The most common approaches to capability building include all of the following,EXCEPT:
A) developing capabilities internally.
B) acquiring capabilities through mergers and acquisitions.
C) accessing capabilities via collaborative partnerships.
D) renewing capabilities to align with customer expectations.
E) coaching average performers to improve their skills.
Q2) What makes the managerial task of executing strategy so challenging and demanding is:
A) the trial-and-error experimentation that is required to come up with a workable organizational structure.
B) the people-management skills required, the resistance to change that has to be overcome, and the perseverance necessary to get a variety of initiatives launched and kept moving along.
C) the time and effort it takes to build core competencies.
D) the time, training, and creative effort it takes to empower employees and teach them responsible decision making.
E) the supervisory requirements associated with getting company personnel to do things the right way.
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Chapter 11: Managing Internal Operations
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Sample Questions
Q1) New strategies often entail budget reallocations because:
A) revamping the performance of value chain activities can be costly.
B) the accompanying policy revisions and compensation incentives tend to require different levels of funding than before.
C) business units important in the prior strategy but having a lesser role in the new strategy may need downsizing, while units and activities that now have a bigger and more critical strategic role may need more people, new equipment, additional facilities, and above-average increases in their operating budgets.
D) empowering employees to carry out the new strategy elements and shifting to a total quality management type of culture to build skills in competent strategy execution typically require substantial new funding and budget revisions.
E) adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements.
Q2) It is often said that benchmarking is the backbone of the process of identifying,studying,and implementing best practices.Explain the role of benchmarking.
Q3) What is the difference between Six Sigma DMAIC programs and Six Sigma DMADV programs?
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Page 13
Chapter 12: Corporate Culture and Leadership
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Sample Questions
Q1) What is meant by the term corporate culture? Why is corporate culture an important factor in implementing and executing strategy?
Q2) Briefly identify three types of unhealthy corporate cultures.
Q3) After a company's corporate culture is established,what are four approaches that can be used to perpetuate the culture?
Q4) Which of the following is NOT something to look for in identifying a company's culture?
A) The company's defined spirit and character that pervades the work climate
B) The company's resource strengths, core competencies, and competitive capabilities
C) The company's revered traditions and oft-repeated stories about "heroic acts" and "how we do things around here"
D) The company's approach to people management and the official policies, procedures, and operating practices that paint the white lines for the behavior of company personnel
E) The company's shared values, business principles, and ethical standards that management preaches and practices
Q5) What are the distinctive features of adaptive corporate cultures?
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Page 14