IMS Exam 2 Review

Strategic plans promote consistency of action among the firm's managers worldwide and encourage them to consider the ramifications of their actions in the firm's other geographic and functional areas.

• true

• false

A broad statement that defines the purpose for a company's existence is the mission statement.

• true

• false

An advantage of bottom-up planning is that the people responsible for attaining the goals are formulating them.

• true

• false

To be effective, a company's international strategy must be

• the same as the leaders of the industry.

• the same as the company's domestic strategy.

• externally consistent among the company's products and regional units.

• consistent among all the functions and activities of the company.

Jefferson Materials Corporation has developed a fire-resistant fabric that no one else has been able to replicate. It is used throughout the world in firefighting equipment and supplies. Since it is the only company making the product, customers are willing to pay a premium for the fabric. In this scenario, the fire-resistant fabric has helped the company develop a(n)

• comparative advantage.

• purchasing power parity.

• competitive advantage.

• economy of scale.

Value chain analysis focuses primarily on what question?

• What is the best way for the company to enter a market?

• Who are the company's target customers?

• What does the customer value and how much is the customer willing to pay for this value?

• How will this customer value be created?

A clear, concise description of the fundamental beliefs and priorities expected of the organization's members, reflecting how they are to behave with each other and with the company's customers, suppliers, and other members of the global community is known as a

• mission statement.

• vision statement.

• values statement.

• strategic plan.

High-Rise Boots Corporation plans to expand into the European market where it finds weak pressure to respond to local demands and cost reductions are not necessary. Which competitive strategy should the company use based on these factors?

• home replication strategy

• transnational strategy

• multidomestic strategy

• differentiation strategy

When there is strong pressure for a company to adapt its products or services for local markets, it should probably rely on a

• global strategy.

• transitional strategy.

• home replication strategy.

• multidomestic strategy.

A strategic plan is used by a company to

• guarantee how the firm's goals will be met.

• analyze a contingency plan.

• present sales forecasts and budgets.

• create a firm's vision statement.