Test Bank For Crafting and Executing Strategy:
Economic motivations of firm in expanding into international market - ANSWER 1.
To gain access to new customers and meet current customer needs
2. To achieve lower cost through economies of scale, experience and increase
purchasing power
3. To further exploit core competencies
4. To gain access to resources and capabilities located in foreign markets
5. To gain access to lower-cost inputs of production
Porter's Diamond of National Competitive Advantage - ANSWER 1. Demand
Conditions: Home-market size and growth rate; buyers' tastes
2. Firm strategy, structure ad rivalry: different styles of management and
organization; degree of local rivalry.
3. Factor conditions: availability and relative prices of inputs (e.g., labor and
materials)
4. Related and supporting industries: proximity of suppliers, end users and
complimentary industries.
Companies that are strong in four areas are better in competing in international
markets
Strategies for entering and competing in international market- risk and benefits -
ANSWER Multi-domestic, Global and Transnational strategies
Multi-domestic strategy - ANSWER (think local, act local)
Calls for varying a company's product offering and competitive approach country to
country to be responsive to significant cross-country differences in customer
preferences, buyer purchasing habits, distribution channels, or marketing methods.
May market under different brand names (ex. Castrol)
Decentralized decision-making - local manager latitude
Global strategy - ANSWER think global, act global approach.
is one in which a firm employs the same basic competitive approach in all countries
where it operates, sells much the same products everywhere, strives to build global
brands, and coordinates its actions worldwide with strong headquarters control
Transnational strategy - ANSWER A think-global, act-local approach that
incorporates elements of both multi-domestic and global strategies. (ex. KFC,
Mcdonalds and Starbucks)
Why competing across borders makes strategy more complex? - ANSWER 1.
Different countries with different home-country advantages in different industries
2. Location-based value chain advantages for certain countries.
3. Differences in government policies, tax rates and economic conditions.
4. Currency exchange rate risk
Economic motivations of firm in expanding into international market - ANSWER 1.
To gain access to new customers and meet current customer needs
2. To achieve lower cost through economies of scale, experience and increase
purchasing power
3. To further exploit core competencies
4. To gain access to resources and capabilities located in foreign markets
5. To gain access to lower-cost inputs of production
Porter's Diamond of National Competitive Advantage - ANSWER 1. Demand
Conditions: Home-market size and growth rate; buyers' tastes
2. Firm strategy, structure ad rivalry: different styles of management and
organization; degree of local rivalry.
3. Factor conditions: availability and relative prices of inputs (e.g., labor and
materials)
4. Related and supporting industries: proximity of suppliers, end users and
complimentary industries.
Companies that are strong in four areas are better in competing in international
markets
Strategies for entering and competing in international market- risk and benefits -
ANSWER Multi-domestic, Global and Transnational strategies
Multi-domestic strategy - ANSWER (think local, act local)
Calls for varying a company's product offering and competitive approach country to
country to be responsive to significant cross-country differences in customer
preferences, buyer purchasing habits, distribution channels, or marketing methods.
May market under different brand names (ex. Castrol)
Decentralized decision-making - local manager latitude
Global strategy - ANSWER think global, act global approach.
is one in which a firm employs the same basic competitive approach in all countries
where it operates, sells much the same products everywhere, strives to build global
brands, and coordinates its actions worldwide with strong headquarters control
Transnational strategy - ANSWER A think-global, act-local approach that
incorporates elements of both multi-domestic and global strategies. (ex. KFC,
Mcdonalds and Starbucks)
Why competing across borders makes strategy more complex? - ANSWER 1.
Different countries with different home-country advantages in different industries
2. Location-based value chain advantages for certain countries.
3. Differences in government policies, tax rates and economic conditions.
4. Currency exchange rate risk
