Strategic Management exam questions – Flashcards
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What do we mean by 'Strategic Management'?
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The art & science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives
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What does a STRATEGIST do? (his job function)
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-Track industry and competitive trends -spot emerging market opportunities -identify threats -develop creative plans
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What question goes with 'Mission Statement' ?
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What is our business?
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What question goes with 'Vision Statement' ?
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What do we want to become?
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Give the steps of the strategic management process or model? (from Fred R. David)
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strategy formulation strategy implementation strategy evaluation
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Name 3 non-financial tangible benefits that strategic management offers to companies?
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identifying and prioritizing of opportunities Provides objective view of management problems Control activities
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Mention 4 of the 9 components of Mission Statement...
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Customers (who are the company's customers) Product or services (what is the company's product) Market Technology
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What are the 5 categories of EXTERNAL factors?
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Economic forces Governmental forces Social, cultural forces Technological forces Competitive forces
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Name the Five forces model of Porter that is used for developing strategies?
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Rivalry among competing firms Potential entry of new competitors Potential development of substitute product Bargaining power of suppliers Bargaining power of consumers
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What is the purpose of Porter's Model?
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To determine if the industry is attractive/profitable
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Make an EFE Matrix
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Mention External factors THREATS and OPPORTUNITIES individual WEIGHT (the sum equals 1) individual RATING(1-5)
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Draw a CPM (Critical Profile Matrix)?
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Horizontally all the competitors Vertically the critical success factors (strengths) Individual WEIGHT (the sum equals 1) Per country different RATING (1-5)
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What can you do with an IFE-matrix?
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Summarizes and evaluates the major strengths and weaknesses of the company and evaluating relationships among them
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How would you pay a manager based on short-term and long-term objectives?
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25% short-term / 75% long-term because managers must base their decisions on how the company can be successful in couple of years not this year
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What is meant by "Forward Integration"?
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Gaining control over Distributors or Retailers or selling
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What is meant by "Horizontal Integration"?
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Gaining control over your competitor Merging
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Name 2 of the 6 guidelines for a business to use DIVERSIFICATION strategy?
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When a company is in a no-grow or slow-grow industry When adding new related product increases the sale of CURRENT products
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What are the 3 defensive strategies?
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Retrenchment Divestiture Liquidation
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Why can Porter's DIFFERENTATION strategy be dangerous?
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-Unique product may not be valued highly enough by customers -Competitors can copy the differentating features
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What is a Joint Venture? (Cooperative Arrangements)
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When two companies form a partnership to capitalize on an opportunity
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What are other forms of "cooperative arrangements" ?
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R&D partnerships and Cross-distribution agreement
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What 4 strategies can come from a TOWS matrix?
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SO = use internal strength to make use of opportunity ST = use internal strength to avoid threats or reduce risk WO = improve weakness by taking an opportunity WT = reducing weakness and avoiding threats
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Why do organizations use BCG-matrix?
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They can examine the market share and industry growth rate of each division relative to all divisions
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Draw a BCG - matrix ....
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stars, question mark, cash cows, dogs Horizontal is MARKET SHARE vertical is MARKET GROWTH
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Draw the IE - matrix ....
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Horizontal is "IFE total weighted score" Vertical is "EFE total weighted score" First cell: Grow and Build (backward, forward, horizontal integrations) Middle Cell: Hold and Maintain (product development) Last Cell: Harvest or Divest (retrenchment)
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What is one positive feature of QSPM?
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Unlimited number of strategies can be examined at once
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What is one negative feature of QSPM?
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It is not exact due to intuition
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What input is needed from stage 1 & 2 for QSPM?
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...
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Structure follow strategy or Strategy follows Structure?
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Structure follows strategy! Structure should be designed to facilitate the strategic pursuit of a firm and therefore follows strategy
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Difference between restructuring and reengineering?
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Restructuring is concerned about shareholder well-being rather than employee. (changing the way of work) Reengineering is concerned about employee well-being rather than shareholder (short-term ta
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Organizational Culture, mention 4 elements of CULTURE + Cultural product
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Language (rude or polite) Stories (story about foundation of company) Rituals (Christmas Party) Symbols (huge car, private plane)
