Basic Model of Strategic Management Quiz
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Questions and Answers

What is the main focus of the rational planning model in strategic management?

  • Crafting the corporate mission
  • Evaluating the internal environment of the corporation
  • Analyzing and predicting changing situations accurately (correct)
  • Setting achievable objectives for the corporation

    • What is the purpose of environmental scanning in the strategic management process?

  • Setting financial targets for the corporation
  • Monitoring and evaluating competitors' strategies
  • Implementing policies to reduce environmental impact
  • Identifying external and internal elements relevant to strategic decisions (correct)

    • Which phase of strategic management involves investigating, analyzing, and making decisions to provide a competitive advantage?

  • Crafting the corporate mission
  • Environmental scanning
  • Strategy formulation (correct)
  • Setting achievable objectives

    • How does the rational planning model suggest corporations should respond to increasing environmental uncertainty?

    <p>Analyze and predict changing situations more diligently</p> Signup and view all the answers

    In strategic management, what is the role of identifying weaknesses according to the text?

    <p>Impacting the company's ability to grow</p> Signup and view all the answers

    What does strategy formulation involve in the context of strategic management?

    <p>Crafting the corporate mission</p> Signup and view all the answers

    What is the main purpose of a strategic audit?

    <p>To identify problem areas and provide solutions through critical questioning</p> Signup and view all the answers

    What is the role of strategic leadership in a company?

    <p>To manage the strategy-making process to enhance company performance</p> Signup and view all the answers

    How do managers achieve superior performance for their firms?

    <p>By selecting and implementing strategies that aim to achieve competitive advantage</p> Signup and view all the answers

    What is the central task of managers in an organization?

    <p>To pursue strategies to attain superior performance, measured by profitability and profit growth</p> Signup and view all the answers

    What does the strategy-making process aim to achieve in a company?

    <p>To increase the value of the enterprise to its owners and shareholders</p> Signup and view all the answers

    Why is a strategic audit not considered all-inclusive?

    <p>Because it raises critical questions for detailed strategic analysis</p> Signup and view all the answers

    What is the main purpose of strategy implementation?

    <p>Putting strategies into action</p> Signup and view all the answers

    Who is typically involved in the implementation of a strategy?

    <p>Middle- and lower-level managers</p> Signup and view all the answers

    What is the final major element of strategic management?

    <p>Evaluation and control</p> Signup and view all the answers

    Why is it important for managers to obtain clear, prompt, and unbiased information for evaluation and control?

    <p>To compare actual performance with desired performance</p> Signup and view all the answers

    What does a strategic audit involve as part of strategy evaluation?

    <p>Assessing whether strategies are designed appropriately and effectively</p> Signup and view all the answers

    How does evaluation and control contribute to the strategic management process?

    <p>By pinpointing weaknesses in implemented strategies and stimulating the process to begin again</p> Signup and view all the answers

    What may help a firm to maximize shareholder value over time?

    <p>Developing a strong business model and associated strategies</p> Signup and view all the answers

    What can influence a company's performance in addition to its business model and strategies?

    <p>Characteristics of the industry in which it competes</p> Signup and view all the answers

    What might characterize industries with stable technology?

    <p>Technological change</p> Signup and view all the answers

    What could be a consequence of high profitability among incumbent companies in an industry?

    <p>Decreased prices and profits due to new entrants</p> Signup and view all the answers

    What effect might rapid demand growth have on an industry?

    <p>Increased competition</p> Signup and view all the answers

    Which factor might make new entry into an industry difficult?

    <p>High profitability among incumbent companies</p> Signup and view all the answers

    What does a firm need to do to achieve sustained competitive advantage?

    <p>Continually adapt to changes in external trends and effectively formulate strategies</p> Signup and view all the answers

    How does having a sustained competitive advantage impact a company's profits compared to its competitors?

    <p>Leads to faster profit growth than competitors</p> Signup and view all the answers

    What is the significance of different strategies in creating competitive advantage?

    <p>Different strategies create activities that make a company unique</p> Signup and view all the answers

    What does a business model encompass according to the text?

    <p>How all strategies pursued by the company work together</p> Signup and view all the answers

    Which of the following is NOT part of a business model as mentioned in the text?

    <p>Acquiring customers but not keeping them</p> Signup and view all the answers

    Why is understanding competitive advantage crucial for a firm?

    <p>It enables a firm to consistently outperform competitors</p> Signup and view all the answers

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