Business Strategy Test 3 - Ch's 8-10

Front 1

World trade started after this:

Back 1

WWII

Front 2

"GATT" stands for:

Back 2

General Agreement on Tariffs and trades.

Front 3

"WTO" stands for:

Back 3

World Trade Organization

Front 4

Investment where money is flowing from one country to another to obtain a management interest in businesses operating there:

Back 4

Foreign Direct Investment (FDI)

Front 5

____ is the largest recipient of FDI in the world:

Back 5

United States

Front 6

These regional trading agreements have also relaxed trade and investment barriers among member countries:

Back 6

European Union and NAFTA (North American Free Trade Agreement)

Front 7

___ countries are having a greater impact on the global economy & provide opportunities for multinational firms to market their products & obtain resources:

Back 7

B.R.I.C.

Front 8

"B.R.I.C." stands for:

Back 8

Brazil
Russia
India
China

Front 9

Not just seeking opportunities and threats domestically but globally:

Back 9

The Global Mind-Set

Front 10

The disadvantages of being you. Involves cost of risk of doing business outside a firm's domestic market:

Back 10

Liability of Foreignness

Front 11

Three motives for existing research internationally:

Back 11

1) Resource-Seeking
2) Market-Seeking
3) Client-Following

Front 12

When companies seek to gain economies of scale and scope in the use of their current resources by expanding into new markets, increasingly foreign markets:

Back 12

Resource-Seeking

Front 13

Firms seek to lower costs of production by developing economies of scale, so they seek new places to sell their goods:

Back 13

Market-Seeking

Front 14

Following business partners aboard:

Back 14

Client-following

Front 15

*Four of the most prominent motives for International Strategy (from the book):

Back 15

1)Resource-seeking
2)Market-seeking
3)SCAs & Learning
4)Competitive Rivalry

Front 16

You get ____ _____ in places where you get SCAs & Learning:

Back 16

Knowledge spill-over

Front 17

When choosing an international strategy, we should consider two competing issues:

Back 17

1)Global efficiencies
vs
2)Local responsiveness

Front 18

More to do with operations. In marketing, global efficiencies is considered:

Back 18

Standardization

Front 19

More to do with marketing. In marketing, local responsiveness is considered:

Back 19

Adaptation

Front 20

Increases when the firm can sell its current good or service in multiple international markets:

Back 20

Efficiency

Front 21

The need for customization to serve international markets increases when the firm sells a good or service. They must ____ specifically to a particular local market:

Back 21

Adapt

Front 22

Firms seeking ____ _____ may decide to locate in countries where their production and distribution costs will be low:

Back 22

Global Efficiency
(Gains economies of scale)

Front 23

An action plan that the firm develops to produce and sell unique products in different markets:

Back 23

Multidomestic Strategy

Front 24

An action plan that the firm develops to produce and sell standardized products in different markets:

Back 24

Global Strategy

Front 25

An action plan that the firm develops to produce and sell somewhat unique yet somewhat standardized products in different markets (organized by product & area):

Back 25

Transnational Strategy

Front 26

Multidomestic strategy is a.k.a as:
Products are:
Marketing/Operations are:
Decision making is:
Knowledge Transfer is:

Back 26

-Regionalization Strategy
-Unique
-Specialized
-Decentralized
-Low (No economies of scope/scale)

Front 27

Global strategy is a.k.a as:
Products are:
Marketing/Operations are:
Decision making is:
Knowledge Transfer is:
Is transfered in what direction:

Back 27

-Globalization Strategy
-One size fits all
-Standardized
-Highly Centralized
-High (can capture economies of scale & some ecomies of scope)
- Travels top down

Front 28

Transnational strategy is a.k.a as:
Products are:
Marketing/Operations are:
Decision making is:
Knowledge Transfer is:
Is transfered in what direction:

Back 28

-Global efficiencies & local responsiveness
-Standardized yet somewhat custom
-Marketing (want to standardize), Operations (want to Globalize)
-Centralized and Decentralized
-Highest (captures both economies of scale & scope)
-In all directions

Front 29

6 Modes of International Market Entry:

Back 29

-Exporting
-Licensing
-Franchising
-Contract Manufacturing
-Turnkey Projects
-Foreign Direct Investment

Front 30

Sending goods and services from one country to another for distribution, sale, and service. Risk & Control=low, used by SMEs:

Back 30

Exporting

Front 31

Giving permission to produce/sell our products in an international market. Risk low but not as low as Exporting:

Back 31

Liscensing

Front 32

Barriers of Exporting:

Back 32

Tariffs, logistics, quotas

Front 33

Barriers of Licensing:

Back 33

NONE

Front 34

Special form of licensing. Transferring/sharing operating principles. Continue to pay royalties. Essentially buying a customer base:

Back 34

Franchising

Front 35

Foreign country manufactures parts of products because their cost advantage, firms can invest significant amounts of capital:

Back 35

Contract Manufacturing

Front 36

Often construction projects to build large infrastructure facilities such as coal or gas fired electrical power plants, are done on a contractual basis:

Back 36

Turnkey Projects

Front 37

As you go down the Modes of International Market Entry list, Risk and Control get ___:

Back 37

Higher

Front 38

When the government ceases control of our companies assets and provides inadequate compensation:

Back 38

Expropriation

Front 39

This terms means new company ownership:

Back 39

Equity

Front 40

3 Approaches to Foreign Direct Investment:

Back 40

1)Strategic Alliance (Partnerships)
2)Joint Ventures
3)Wholly-Owned Subsidiaries

Front 41

Non-Equity Entry Mode of FDI. Represent a cooperative agreement in which home and host country firms work closely together:

Back 41

Strategic Alliances (Partnership)

Front 42

Equity Entry Mode of FDI. Working together results in creating a separate company to promote the partners' mutual interests:

Back 42

Joint Venture
50/50% -95/5%

Front 43

Equity Entry Mode of FDI.Protect SCA. A contractual agreement or relationship where parties benefit from sharing resources &/or capabilities:

Back 43

Wholly-Owned Subsidiaries

Front 44

Two forms of the FDI Entry Mode, Wholly-Owned Subsidiaries:

Back 44

1) Greenfield Venture
2)Acquistion

Front 45

Venture in which a firm buys or leases land, contructs a new facility and hires or transfers mngrs & employees, then independently launches (BUILDS) a new operation (W.O.Sub) w/out involvement of a partner:

Back 45

Greenfield Venture
(100%-Build)

Front 46

FDI entry mode in which a firm acquires (buys) an existing host country firm:

Back 46

Acquistion

Front 47

Major disadvantage of Greenfield Venture:

Back 47

It takes time to implement and gain acceptance in the market.

Front 48

The main risk of acquistion - The firm often assumes all the acquired firm's _____:

Back 48

liabilities

Front 49

A factor affecting the Selection of Entry Mode. When resource advantages are the core competencies that provide a competitive advantage over a firm's rival:

Back 49

Firm-Specific Resource and Advantages

Front 50

A factor affecting the Selection of Entry Mode. Are advantages that are concerned w/the desirability of producing in the home country vs locating production & distribution assets in the host country (exporting):

Back 50

Country-Specific or Location Advantages

Front 51

A factor affecting the Selection of Entry Mode that make it desirable for a firm to produce the good or service rather than contracting with another firm to produce or distribute it:

Back 51

Internal Coordination or Administrative advantages
(not advantage but disadvantage)

Front 52

A decentralized org structure that enable each division to focus on a geographic area, region, or country:

Back 52

Geographic-area divisional structure

Front 53

A centralized org structure in which each product group is housed in a globally focused worldwide division or worldwide profit center:

Back 53

Worldwide divisional structure

Front 54

An org sturture in which both functional & product expertise are integrated into teams so the teams will be able to respond quickly to requirements in the global marketplace:

Back 54

Global matrix structure

Front 55

Ideal that there should be 1 boss:

Back 55

Unity of command principle

Front 56

3 International Strategies:

Back 56

1)Multidomestic strategy
2)Global Strategy
3)Transnational Strategy

Front 57

This international strategy violates the "Unity of Command Principle":

Back 57

Transnational Strategy

Front 58

CH9-
An action plan a firm develops to form cooperative relationships with other firms. Is a very popular strategy. Purpose is to develop the companys SCAs (non-equity entry mode):

Back 58

Strategic Partnership (Cooperative Strategy)

Front 59

Two entry Modes for a Strategic Partnership (ownership vs contractual relationships):

Back 59

1)Strategic Partnership
2)Joint Venture

Front 60

A separate business that is created by an equity alliance (Equity entry mode):

Back 60

Joint Venture

Front 61

Two types of strategic alliances are:

Back 61

1)Equity Alliance
2)Non-equity Alliance

Front 62

An alliance in which each partner owns a percentage of the equity in a venture that the firms have jointly formed:

Back 62

Equity Alliance

Front 63

A contractual relationship b/t two or more firms in which each partner agrees to share some of its resources or capabilities:

Back 63

Non-equity alliance

Front 64

Reasons for Strategic Partnerships:

Back 64

*Gain Access to a restricted Market
*Share significant R&D investments
*Gain access to complementary resources
(full list on p.171)

Front 65

Research continues to show, the key to strategic partnership is matching _______ ________ because:
-it creates dependancy
-the direct competition decreases

Back 65

complimentary SCAs.

Front 66

There is a ___ __ ____ where there are identical SCAs:

Back 66

Race to Learn

Front 67

Resources that each partner brings to the partnership that when combined, allow for new resources or capabilities that neither firm could readily create alone:

Back 67

Complementary resources

Front 68

Business-level strategic [partnerships] is the:

Back 68

Value Chain

Front 69

Two types of business level strategic alliances:

Back 69

-Vertical &
-Horizontal Strategic Alliance

Front 70

An alliance that involves cooperative partnerships aross the value chain (partnering with suppliers, mfg, distributors, retailers):

Back 70

Vertical Strategic Alliance

Front 71

An alliance that involves cooperative partnerships in which firms at the same stage of the value chain share resources and capabilities (partnering w/some1 who does what we do [RACE TO LEARN]:

Back 71

Horizontal Strategic Alliance

Front 72

Means the one who gets ther first, often rewrites the rules:

Back 72

Race to Learn

Front 73

Alliances that focus on the firm's product line and are designed to enhance firm growth:

Back 73

Corporate-Level Strategic Alliances

Front 74

Part of Corporate level strategic (partnerships). This creates partnerships to grow more:

Back 74

Diversification by partnership
(sometimed done to diversify less)

Front 75

Part of Corporate level strategic (partnerships). 1+1+1=4, we gain econokies of scope while sharing resources, core competencies, & activities:

Back 75

Synergy by partnership

Front 76

Part of Corporate level strategic (partnerships). Franchisor - maintain control of product. Franchisee gains brand name recognition & immediate customer base:

Back 76

Franchising

Front 77

3 Corporate level strategic (partnerships):

Back 77

- Diversification by partnership
-Synergy by partnership
-Franchising

Front 78

2 International strategic (partnerships):

Back 78

1)SA vs Internatioal/Global Strategic Alliances
2)JV vs Internationl Joint Ventures

Front 79

International strategic (partnerships) where two or more countries are involved:

Back 79

SA vs Internatioal/Global Strategic Alliances

Front 80

International strategic (partnerships) where two or parent companies from two or more different countries are involved:

Back 80

JV vs Internationl Joint Ventures

Front 81

When deciding on international ventures, ___ matters:

Back 81

Culture

Front 82

Two main types of Culture:

Back 82

1)National Culture
2)Organizational Culture

Front 83

When managing risk in strategic partnerships, development of trust is estabished through builiding:

Back 83

Longterm business relationships

Front 84

When managing risk in strategic partnerships, have to avoid doing things that only benefits oneself which is called:

Back 84

Opportunistic behavior

Front 85

Research shows that successful partnerships create or spawn:

Back 85

more partnerships

Front 86

Failure rates in partnerships are high when the foreign investor have low ___ investment:

Back 86

equity

Front 87

Partnerships should be:

Back 87

Strategic

Front 88

Employees that drive innovation within the company. An organization wide reliance on entreprenuership and innovation as the link to solid financial performance:

Back 88

Corporate entrepreneurship

Front 89

Someone starting up a business: A process of "creative destruction" through which existing products, methods of production, or ways of admintering or managing the firm are destroyed & replaced with new ones:

Back 89

Entrepreneur

Front 90

Another word for corporate entrepreneurship. A term meaning "inside the company":

Back 90

Intrapreneurship

Front 91

Means creating something new - a new good, a new type of service, or new way of presenting a good or service to the market:

Back 91

Innovation

Front 92

Organizations often use 3 methods to innovate:

Back 92

1)Internal development
2)Cooperative Relationships
3)Acquistion (just buy it)

Front 93

___ & ___ are the backbone of our economy & economic growth:

Back 93

Innovation & Entrepreneurship

Front 94

New means of producing, selling, and supporting goods and services:

Back 94

Process innovations

Front 95

A new way of organizing or handling the organizational tasks firms use to complete their work:

Back 95

Administrative innovation

Front 96

Circumstances suggesting that new goods or services can be sold at a price exceeding the costs including to create, make, sell, & support them:

Back 96

Entrepreneurial opportunities

Front 97

Ultimately, the purpose of innovation is to increase corporate:

Back 97

performance

Front 98

Famous economist that saw Entrepreneurship as a proces...:

Back 98

Joseph Schumpeter

Front 99

The people who drive the process of innovation:

Back 99

Entrepreneur

Front 100

Joseph Schumpeter described Entrepreneurship as a process of "___ ___":

Back 100

Creative destruction

Front 101

Means that you sometimes have to destroy to create things new:

Back 101

Creative destruction

Front 102

Creation destuction is also the ideat that Entrepreneurship & innovation is not ___ but ____:

Back 102

evolutionary but revolutionary

Front 103

Entrepreneurial opportunity that is evolutionary:

Back 103

Incremental innovation

Front 104

Entrepreneurial opportunity that is revolutionary:

Back 104

Radical innovation

Front 105

Studies show _ out of _ people aren't meant to be Entrepreneurs.

Back 105

9 of 10

Front 106

How many major failures are there in starting up a business before getting things right?

Back 106

8 to 9

Front 107

Entrepreneurship is varied by ___ and it changes by ___:

Back 107

Culture
Generation

Front 108

A culture with many Entrepreneurs:

Back 108

Individualistic culture

Front 109

A cultuire with not so many Entrepreneurs:

Back 109

Collectivistic culture

Front 110

Two step process to Strategic Entrepreneurship:

Back 110

1)Identify
2)Exploit

Front 111

The process of taking entrepreneurial actions using a strategic perspective by combining entrepreneurial and strategic mngt processes to enhance the firm's ability to innovate, enter new markets, and improve its performance:

Back 111

Strategic Entrepreneurship

Front 112

The entrepreneurial opportunites:

Back 112

Indentify Strategic Entrepreneurship

Front 113

Taking advantage of the entrepreneurial opportunity:

Back 113

Exploiting Strategic Entrepreneurship

Front 114

Three way to Innovate:

Back 114

-Internal Innovation
-Cooperating to Innovate
-Acquiring Innovation

Front 115

Using a firm's own resources and capabilites to innovate:

Back 115

Internal innovation

Front 116

Two or more firms forming an agreement to joint some of their resources and capabilities to innovate:

Back 116

Cooperating to Innovate

Front 117

Buying ownership of another firm's innovations and innovation capabilities:

Back 117

Acquiring Innovation