Chapter 12

Question 1

Strategy Formulation

Answer 1

Process of deciding what to do; also called strategizing

Question 2

Strategy Implementation

Answer 2

Process of performing all the activities necessary to do what has been planned

Question 3

Business Strategy

Answer 3

The ways a firm goes about achieving its objectives within a particular business

Question 4

International Strategy

Answer 4

Using corporate strategy to guide the choice of which markets, including different countries, that a firm competes in.

Question 5

Importing

Answer 5

The sale of products or services in one country that are sourced in another country.

Question 6

Outsourcing

Answer 6

Contracting with a third party to do some of a company’s work on its behalf

Question 7

Offshoring

Answer 7

Taking some business function out of the company’s country of origin to be performed in another country, generally at a lower cost.

Question 8

International Outsourcing

Answer 8

Outsourcing to a non domestic third party.

Question 9

SWOT

Answer 9

Strengths
Weaknesses
Opportunities
Threats

Question 10

SWOT: Strengths & Weaknesses

Answer 10

Good strategies take advantage of strengths and weaknesses and minimize the disadvantages posed by any weaknesses

Question 11

Sustainable Competitive Advantage

Answer 11

A situation where an organization’s strengths cannot be easily duplicated or imitated by other firms.

Question 12

SWOT: Opportunities & Threats

Answer 12

• Opportunities assess the external attractive factors that represent the reason for a business to exist and prosper.
• Threats include factors beyond your control that could place the strategy or even the business itself at risk.

Question 13

Cost-Leadership Strategy

Answer 13

Firms seek to make their products or services at the lowest cost possible relative to their competitors while maintaining quality.

Question 14

Differentiation Strategy

Answer 14

An integrated set of actions designed by a firm to produce or deliver goods or services that customers perceive as being different in ways that are important to them.

Question 15

Vertical Scope

Answer 15

All the activities, from the gathering of raw materials to the sale of the finished product, that a business goes through to make a product.

Question 16

Horizontal Scope

Answer 16

The number of similar businesses or business activities at the same level of the value chain.

Question 17

Horizontal Scope offers opportunities in four areas:

Answer 17

1. Economies of scale
2. Economies of scope
3. Enhance revenue through synergies
4. Increase market power

Question 18

Geographic Scope

Answer 18

The number of different geographic markets in which an organization participates.

Question 19

Multidomestic Strategy

Answer 19

Maximizes local responsiveness by giving decentralizing decision-making authority to local business units in each country so that they can create products and services optimized to their local market.

Question 20

Global Strategy

Answer 20

An international strategy in which the home office centralizes and control decision-making authority and seeks to maximize global efficiency.

Question 21

Transnational Strategy

Answer 21

An international strategy that combines firm-wide operating efficiencies and core competencies with local responsiveness tailored to different countries.

Question 22

Five Elements of Strategy

Answer 22

1. Arenas
2. Differentiators
3. Vehicles
4. Staging
5. Economic Logic