Strategic Management exam questions

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

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