Introduction to strategic management

Question 1

What is strategy

Answer 1

the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals

Question 2

What is competitive strategy?

Answer 2

. It means deliberately choosing a different set of activities to deliver a unique mix of value

Question 3

What are the three elements of strategy 1 a,b,c 2,3

Answer 3

1. The long term
   Three horizons framework - organizations should think of their businesses or activities in terms of different ‘horizons’, defined by time
   a.Current core activities - defending and extending
   b.emerging activities that should provide new future sources of profit
   c.Possibilities – more open and for which outcomes are uncertain e.g. risky research and development (R&D) projects, start-up ventures, test-market pilots which generate profits a few years from the present
   Can be used to assess the sustainability of an organization’s strategy
2. Strategic direction – based on long-term objectives e.g. profit maximization, service delivery etc.
3. Organisation – stakeholder interest and views (management of relationships), determination of external boundaries (what to include within the organization and manage relationships outside

Question 4

what are the four ways of defining an organization’s purpose

Answer 4

1. A mission statement aims to provide employees and stakeholders with clarity about what the organization is fundamentally there to do – “What business are we in?”
2. A vision statement is concerned with the future the organization seeks to create - ‘What do we want to achieve?’
3. Statements of corporate values communicate the underlying and enduring core ‘principles’ that guide an organization’s strategy and define the way that the organization should operate.
4. Objectives are statements of specific outcomes that are to be achieved e.g. precise financial terms (level of sales, profit, etc.), quantifiable market-based objectives (market share), basis of competitive advantage

Question 4

What are the 8 corporate goals and objectives

Answer 4

Profitability (net profits)
Growth/sustainability (increase in total assets, etc.)
Utilization of resources (ROE or ROI)
Market leadership (market share)
Cost efficiency
Product Quality
Innovation
Social responsibility

Question 5

Name the 2 characteristics of strategy statements.
1 a,b,c 2.

Answer 5

1. should have three main themes:
   a. the fundamental goals (mission, vision, or objectives) that the organization seeks;
   b. the scope or domain of the organization’s activities; (customers or clients; geographical location; and extent of internal activities (‘vertical integration’); and
   c. the particular advantages or capabilities it has to deliver all of the above (how the organization will achieve the objectives it has set for itself in its chosen domain e.g. competitive advantage).
2. Should be brief - not be longer than 35 words

Question 6

what are the three levels of strategy?

Answer 6

1. Corporate-level strategy - concerned with the overall scope of an organization and how value is added to the constituent businesses of the organizational whole - geographical scope, diversity of products or services, acquisitions of new businesses, and how resources are allocated between the different elements of the organization.
2. Business-level strategy - how the individual businesses should compete in their particular markets (often called ‘competitive strategy’) - such as innovation, appropriate scale, and response to competitors’ moves.
3. Functional strategies are concerned with how the components of an organization deliver effectively the corporate and business-level strategies in terms of resources, processes and people e.g. raising finance, decisions taken, activities are undertaken, etc.

Question 7

Three ways to explore strategy framework

Answer 7

1. Understanding the strategic position of an organization – Macro Environment, Industry, resources, stakeholders, culture;
2. 3. Assessing strategic choices for the future – Business strategy, corporate strategy, international strategy; and

Managing strategy in action – evaluating strategies, organizing, leadership, and change, processes.