Strategic Management and Page

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Chapter 6 – Formulating Strategy

Multiple Choice Questions

1.The process by which a firm’s managers evaluate the future prospects of the firm and decide on appropriate strategies to achieve long-term objectives is called ____________. a. strategic planning (moderate, page 220)

2.The basic means by which a company competes—its choice of business in which to operate and the ways in which it differentiates itself from its competitors—is called its ____________. a. strategy (easy, page 220)

3.Europe is currently attracting much new investment capital because of ______________. a. the opening of new markets in Eastern Europe (difficult, page 221)

4.Which of the following is NOT a reactive reason that prompts a company to go overseas? a. to seek economies of scale (difficult, page 221)

5.______________ and ______________ are two reactive reasons for a firm’s going international.

International competition; trade barriers (difficult, page 221)

6.The U.S. pharmaceutical maker SmithKline and Britain’s Beecham merged for what primary reason? a. to avoid regulations and restrictions on the home front (difficult, page 221)

7.______________ and ______________ are two proactive reasons for a firm’s going international. a. Economies of scale; cost savings (difficult, page 222)

8.According to an executive of Philips from Holland, only with a global market can a company afford the large development costs necessary to keep up with ______________. a. advancing technology (difficult, page 222)

9.What is perhaps the most likely reason why McDonald’s has aggressively expanded internationally? a. to overcome limited expansion opportunities at home (moderate, page 222)

10.The first phase of the strategic management process starts with the company ______________. a. determining what its mission and overall objectives are (moderate, page 224)

11.All of the following statements about strategic planning are true EXCEPT:

control systems are developed concurrent with the choice of strategy. (difficult, page 224)

a. .

12.The planning phase of the strategic process consists of all of the following EXCEPT: a. establishing an organizational structure. (moderate, page 224)

13.______________ charts the direction of the company and provides a basis for strategic decision making. a. The mission (moderate, page 225)

14.Which category is not typically included among global corporate objectives? a. entrepreneurship (moderate, page 225)

15.After clarification of corporate mission and objectives, the first major step in weighing international strategic options is ______________. a. environmental assessment (moderate, page 226)

16.______________ and ______________ are examples of financial global corporate objectives.

Taxation; capital structure (difficult, page 225)

17.Import controls, equity requirements, and local content requirements are all examples of _____________. a. nationalism (moderate, page 226)

18.Which of the following environmental scanning variables represents the home government’s goals for independence and economic improvement and often influences foreign companies? a. nationalism (moderate, page 226)

19.Environmental scanning should cover all of the following major variables EXCEPT:

strengths and weaknesses. (moderate, page 226)

20.______________ is the most important area for environmental assessment and strategy formulation. a. Global competitor analysis (moderate, page 227)

21.Firms should perform environmental scanning at which three levels? a. multinational, regional, and local (moderate, page 227)

22.The first broad scan of all potential world markets should result in the firm being able to ____________. a. eliminate markets that are closed or insignificant (difficult, page 228)

23.Mitsubishi Trading...
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