SG 8 Strategic Process - Formulation

Question 1

What are strategic alternatives?

Answer 1

Choices of resource allocations that show potential for achieving overall objective

Question 2

What are corporate level strategies?

Answer 2

Strategies that affect the entire organization

Question 3

What is a forward vertical/downstream integration strategy?

Answer 3

Expanding business to include next step in the value chain

Question 4

What is a backward vertical integration strategy (upstream)?

Answer 4

Expanding business to include preceding steps in value chain

Question 5

How does horizontal integration work?

Answer 5

Business increases capacity at some point along value chain

Question 6

What is it called when a company reduces involvement integration?

Answer 6

Dis-integration.

Question 7

Financial analysis of vertical integration strategies uses which two forms of analysis

Answer 7

Make or buy

Cost/benefit

Question 8

Define concentric diversification

Answer 8

Adding new products or services that are related to current business, as they build on same skills and expertise.

Question 9

Define horizontal diversification

Answer 9

Addition of new products or services that are not related to current product but likely appeal to same target market

Question 10

Define conglomerate diversification

Answer 10

Adding new products or services that are completely unrelated to current product offering

Question 11

When are defensive strategies usually undertaken?

Answer 11

When an entity needs to respond to external conditions, usually in form of competitive pressures.

Question 12

Define divestitture

Answer 12

When a business segment is closed or sold off

Question 13

Define retrenchment

Answer 13

Reorganization of business activities to reduce assets and expenses

Question 14

How are intensive strategies undertaken?

Answer 14

Grow business by increasing sales volume through marketing strategies

Question 15

Define market penetration strategy

Answer 15

Obtain or increase market share. Usually involves decreasing selling price or increasing perceived value of product

Question 16

Define market development

Answer 16

Increasing sales by entering new region or market, or finding a new use for existing product and creating a new market

Question 17

Define product development strategy

Answer 17

Modifying or improving an exisitng product, using R&D

Question 18

What three levels are busniess level-strategies at?

Answer 18

Business-unit, profit-centre and/or product-line

Question 19

What do business level strategies require?

Answer 19

Deep understanding of what customers want and need

Question 20

What step is crucial in developing a business-level strategy?

Answer 20

Understanding target market

Question 21

What does the CVP answer?

Answer 21

Why does my ideal customer buy this product or use this service rather than those of the competitor?

Question 22

How does the CVP align with mission/strategy/values

Answer 22

It needs to be unique to a particular target market, but still be in line with overall vision/mission/values of company

Question 23

Major goal of business-level strategy

Answer 23

Create and maintain competitive advantage

Question 24

3 different generic strategy

Answer 24

Low cost - operational excellence
Differentiation - customer intimacy
Differentiation - product leaders

Question 25

What companies are ideal for low-cost strategy?

Answer 25

High-volume, standardized production with no need for differentiation

Question 26

What does customer intimacy allow for?

Answer 26

Customized solutions, customer-centricity. often expensive.

Question 27

Goal of product leadership

Answer 27

Bring superior products to market. Requires corporate culture of excellence, problem solving and teamwork with commitment to R&D.

Question 28

How do functional (departmental) strategies align with business strategies?

Answer 28

Addresses how the business strategies will actually be carried out and supported (e.g. reporting/a+p/qc strategies)