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Strategic Mgmt 1&2
Strategic Mgmt 1
| Question | Answer |
|---|---|
| What is strategy? | A company's strategy is its action plan for outperforming its competitors and achieving superior profitability. |
| What is a sustainable competitive advantage and how does it relate to strategy? | A company achieves a competitive advantage when it provides buyers with superior value compared to rival sellers. The advantage is sustainable if it persists despite the best efforts of competitors to surpass this advantage. |
| What is a company's business model and does it differ from strategy? | Business models sets forth the logic for how strategy will create value for customers, while at the same time generate revenues sufficient to cover costs and realize a profit. Business models are about making money, and strategies are about direction. |
| Identify and describe the 5 tasks of strategic management. | 1. Develop a strategic vision (and mission). 2. Setting objectives. 3. Craft a strategy to achieve objectives and vision. 4. Implement and execute strategy. 5. Monitor, evaluate, and take corrective actions. |
| What is a strategic vision? | A strategic vision describes management's aspirations for the future and delineates the company's strategic course and long-term direction. |
| What is a mission statement? | A company's mission describes its purpose and its present business (who we are, what we do, and why we are here) |
| How are strategic visions and mission statements different? | A strategic vision portrays a company's aspirations for its future, whereas a company's mission describes its purpose and its present business |
| Why is it important to develop a strategic vision? | page 23 |
| Why is communicating your strategic vision important? | An effectively communicated vision is a valuable management tool for enlisting the commitment of company personnel to engage in actions that move the company forward in the intended direction. |
| What are company values and why should they be linked to a company's vision? | A company's values are the beliefs, traits, and behavioral norms that management has determined should guide the pursuit of its vision and mission.They should be linked to the vision because value-based behavioral norms contribute to the company's success |
| What are objectives? | Objectives are an organization's performance targets - the specific results management wants to achieve. |
| What is the purpose of setting objectives? | To convert the vision and mission into specific performance targets. |
| Why is it important to set objectives? | 1. They focus efforts and align actions throughout the organization. 2. they serve as yard-sticks for tracking a company's performance and progress 3. they motivate employees to expend greater effort and perform at a higher level |
| What are strategic objectives? | goals concerning a company's marketing standing and competitive position |
| What are financial objectives? | communicate management's goals for financial performance |
| Explain the need for a balanced scorecard in terms of setting objectives. | It provides a company's employees with clear guidelines about how their jobs are linked to the overall objectives of the organization, so they can contribute most productively and collaboratively to the achievement of these goals. |
| What is strategic intent, and how does it relate to a company's objectives? | Strategic intent is when a company relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective. |
| What are short-term objectives? | Short-term objectives focus attention on delivering performance improvements in the current period and satisfy shareholder expectations for near-term progress. |
| What are long-term objectives? | Long-term objectives force managers to consider what to do now to put the company in position to perform better later. |
| Why are objectives needed at all organizational levels? | Employees within various functional areas and operating levels will be guided much better by narrow objectives relating directly to their departmental activities than broad organizational level goals. Objective-setting is a top-down process. |
| What is strategy and what does a company's strategy consist of? | A strategy is a company's action plan for outperforming its competitors and achieving superior profitability. See figure 1.1. |
| Why is strategy important? | A company's strategy provides direction and guidance, in terms of not only what the company should do but also what it should not do. |
| What is a strategic plan and what 3 strategic management tasks does it consist of? | A company's strategic plan lays out its future direction, performance targets, and strategy.It consists of developing a strategic vision, setting objectives, and crafting a strategy. |
| What is strategy formulation? | The process of developing the strategy. |
| Who is responsible for crafting and executing strategy? | Managers. |
| Identify and explain the 4 different levels of a company's strategy making hierarchy. | 1. Corporate - for the set of businesses as a whole. 2. Business - one for each business the company has diversified into. 3. Functional - within each business. 4. Operating - within each functional area. Figure 2.2 |
| What are core competences? | A core competence is an activity that a company performs proficiently that is also central to its strategy and competitive success. |
| What are distinctive competences? | A distinctive competence is a competitively important activity that a company performs better than its rivals - it thus represents a competitively superior internal strength. |
| What is a competitive advantage? | A company achieves a competitive advantage when it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost to the firm. |
| Identify and explain the 3 basic tests of a winning strategy. | 1. fit test - How well does the strategy fit the company's situation? 2. competitive advantage test - Can the strategy help the company achieve a sustainable competitive advantage? 3. performance test - Is the strategy producing good company performance? |
| What is strategy execution/implementation and what does it involve? | Developing a strategic vision, setting objectives, crafting a strategy, executing the strategy, and (monitoring developments, evaluating performance, and initiating corrective adjustments) |
| What is involved with evaluation, review, and adjustment and why is this 5th task important? | It is the trigger point for deciding whether to continue or change the company's vision and mission, objectives, strategy, and/or strategy execution methods. |
| Who performs the five tasks of strategic management? | senior managers adn the board of directors |
| What is the role of the board of directors? | to exercise strong oversight and see that the five tasks of strategic management are conducted in a manner that is in the best interests of shareholders and other stakeholders. |
| Why is it important to link strategy with ethics/social responsibility? | |
| Why are good strategy making and strategy execution the most trustworthy signs of good management? | The better conceived a company's strategy and the more competently it is executed, the more likely the company will be a standout performer in the marketplace. |
Created by:
bp1189