Fall 2011 Mock Entrance Examination 1 Solutions © 2011 Certified Management Accountants of Ontario. All rights reserved. ®/™ Registered Trade-Marks/Trade-Marks are owned by the Certified Management Accountants of Ontario. No part of this document may be reproduced in any form without the permission of the copyright holder. Fall 2011 – Mock Entrance Examination 1 TABLE OF CONTENTS Examination: Answer Key ...................................................................................... 1 Strategic Management...................................................................... 3 Risk Management and Government ................................................ 13 Performance Management …show more content…
Distractors: a) The focus on inventory management should be increased under a cost leadership strategy. c) Focusing on product development would be more appropriate for a differentiation strategy than for a cost leadership strategy. d) Increasing the focus on quality control would be more appropriate for a differentiation strategy than for a cost leadership strategy. 6. Answer: d. With licencing, a company provides technological know-how to a licensee in the foreign country. Although quality control can be a factor in the licensing contract, the licensee, not the licensor, would have the actual control over product and service quality. Distractors: a) An exporting strategy would result in increased cost savings from economies of scale by producing the product at a single location. b) An advantage of a strategic alliance is that it strengthens the competitiveness in a foreign market by allowing the parties to focus on what they do best. c) An advantage of an exporting as an entry strategy in a foreign market is that is has the lowest degree of risk. Establishing a subsidiary in the foreign country has a high degree of risk. 7. Answer: a. A mechanistic structure gives rise to cultures that have predictability and stability as end states. A change in corporate strategy that is not compatible with the current structure and culture would be difficult to implement successfully. Because the
Exporting has become a very important business strategy nowadays. In order for firms to expand to the international market, and also to maintain and grow their share of market in whatever industry they are in, depending on their goals and objectives, any company must at least explore this possibility. A few and important advantages might come into place, in that they can extend their sales potential of their existing products, increasing margins through a larger customer base. Also, these small to large businesses can consolidate by gaining global share of market, they can reduce their dependence on their existing markets,
This document and all of the materials contained within are strictly for study assignment purposes to fulfill MBA course BUSN 620 Strategic Management on August 01, 2011-September 25, 2011 requirements.
Pearce, J. A., II, Robinson, R. B. (2011). Strategic management: Formulation, implementation, and control (12th ed.). Boston, MA: McGraw-Hill/Irwin
Copyright 2006 The Society of Management Accountants of Canada All rights reserved. No part of this manual may be reproduced in any form without the permission of the copyright holder.
Strategic Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
To work and addition involvement in the field in which I want to construct better profession.
Strategic Management is the theory and practice of making decisions that shape the future of the firm. This course looks at the content and process of strategic decision making from the perspective of managers who are responsible for an entire business unit. These may be individuals who are acting in the capacity of a Chief Executive of a company, divisional General Managers, or departmental heads. It is also the perspective most
Indirect exporting is when a company sells their product to a third party that will then sell that product to customers in foreign countries (2012). Strengths for this type of strategy are there is little financial commitment, the financial risk is reduced by using the third party, and there is a reduced risk that the future of the product or brand will look bad in the new market (2012). A limitation of this entrance strategy are the company has to rely on the third party to get customers and negotiate the sale prices for them (2012). Direct exporting is when the firm that is entering the market enters on its own and handles their own exports (2012). Strengths of this strategy are the company gets to handle their own exports, they have complete control, the company also has a greater amount of potential returns, and they can maintain a greater profit from their sales (2012). Limitations of this are there is a higher risk involved since the company is handling its own foreign markets, and there is a larger investment in not only money but time (2012). Licensing is when there is a relatively low link to risk that permits the company to enter into the market (2012). The strengths associated with licensing are no large capital investment, the company may be able to get around the restrictions and barriers a country can put up, and the company can charge a higher price for their product (2012). Limitations of licensing are
G.G. Dess, G.T. Lumpkin, M.L. Taylor, A.A. Thompson, and A.J. Strickland III, Strategic Management (Boston, McGraw Hill, 2004) pp. 141-148.
Hubbard, G, Rice, J and Beamish, P 2008, Strategic Management, Pearson Education Australia, 3rd, Frenchs Forest, Australia.
Ford’s industry and manufacturing plants give their company a mechanistic structure. As a result, decisions are handed down from the top of the ‘power hierarchy’ and work procedures are mostly standardized and simplified. Following from that categorization, Lawrence and Lorsch were quoted to believe that the better a company’s social structure fits its environment, the higher their rate of success. Implying Ford would succeed better if its mechanistic structure were to change and mould to the volatility of its environment.
We found innovation, cost reduction and market conditions as key elements supporting a successful internal strategy and strategic alliance and diversification to be among the most widely applied strategies for a foreign market penetration and development, while fusions and licenses were the least preferred.
With every market-entry strategy there are always going pros and cons. First, with exporting, varies companies, from small to
Cost leadership emphasizes producing standardized products at a very low per unit cost for consumers who are price sensitive. Differentiation is a strategy aimed at producing products and services considered unique industry wide and directed at customers who are relatively price insensitive. Focus means producing products and services that fulfill the needs of small groups of customers (niche market).
Today, Strategic Management is something really important for companies in order to remain competitive. It is also important to know the definition of this term in order to well understand it. According to the Contemporary Strategic Management 2nd edition book (Grant, Robert, Bella Butler, Stuart Orr and Peter Murray – 2013), “Strategic Management is the process of thinking strategically, setting objectives for the organisation, planning and implementing the necessary changes, and measuring the outcomes.” By knowing it we can see that strategy management is very important for a company. Indeed, strategy is essential for the surviving of the company but also essential to know how the company allocates its resources and how it will achieve its