Module 8 (Lecture 8)

Question 1

Which 6 criteria should be fulfilled for formulating and selecting a strategy?

Answer 1

Suitability (is the strategy a good fit for the company?)
1. Plausibility (does the strategy make sense logically?)
2. Consistency

Acceptability
3. Performance impact
4. Business risk

Feasibility
5. Stakeholder compatibility
6. Internal readiness

Question 2

What does the BCG portfolio matrix look like? (A generic strategy)

Answer 2

Y axis = relative market share
X axis = market growth

Stars = high relative market share, high market growth
Cash cows = high relative market share, low market growth

Question marks = low relative market share, high market growth
Poor dogs = low relative market share, low market growth

Question 3

What does the McK GE portfolio look like? (A generic strategy)

Answer 3

Y axis = competitive strength (choose low, medium, high)
X axis = market attractiveness (choose low, medium, high)

Based on where the firm is in the framework, there are 3 options:
1. Investment/growth strategy
2. Selective strategy
3. Harvest/divestment strategy

Question 4

What is the Product-Market grid? (A generic strategy)

Answer 4

Tool for identifying growth strategies based on your products and market.

Current products + current markets = market-penetration strategy (sell more of your existing products to existing customers)

Current products + new markets = market-development strategy (sell current products to new regions/customer segments)

New products + current markets = product-development strategy

New products + new markets = diversification strategy

Question 5

Information that should be considered for a corporate strategy?

Answer 5

Scope = multiple businesses
Goal = parenting advantage

Advantage creation = corporate management has positive impact on businesses

Comparison = other corporations as potential owners
Primary perspective = owner/ investor

Question 6

Information that should be considered for a business strategy?

Answer 6

Scope = single business
Goal = competitive advantage

Advantage creation = business management creates customer value

Comparison = competitors
Primary perspective = customer

Question 7

Typical process of a successful presentation? (Organising and looking back)

Answer 7

1. Preparation
2. Structure
3. Presentation (how to present yourself)
4. Result analysis

Question 8

6 barriers to strategy execution

Answer 8

1. People barrier = only few managers link incentives to strategy.
2. Resource barrier = most companies do not link budgets to strategy.
3. Skill barrier = many companies don’t have the skills to execute a strategy.
4. System barrier = no formal strategy execution process in place.
5. Leadership barrier = most executive teams barely discuss strategy.
6. Vision barrier = majority of workforce doesn’t understand the strategy.

Question 9

3 drivers that influence employee’s strategy-oriented behavior?

Answer 9

1. “Should” (focus on goals and actions)
2. “Can” (focus on skills and resources)
3. “Want” (focus on incentives and attitudes)

Question 10

What 4 elements must align for effective strategy execution?

Answer 10

1. Strategy
2. Culture
3. Structure (business processes, systems)
4. Environment