Podcast
Questions and Answers
Aligning organizational factors to implement ______ is crucial.
Aligning organizational factors to implement ______ is crucial.
strategy
Articulating specific ______ is fundamental for deliberate strategy formulation.
Articulating specific ______ is fundamental for deliberate strategy formulation.
objectives
The ______ part of the strategy formulation process involves responding to emerging ideas and learning.
The ______ part of the strategy formulation process involves responding to emerging ideas and learning.
emergent
Strategic thinking involves evaluating actions and events in terms of their impact on the business's pursuit of ______ performance.
Strategic thinking involves evaluating actions and events in terms of their impact on the business's pursuit of ______ performance.
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The ______ environment analysis seeks to identify opportunities and threats.
The ______ environment analysis seeks to identify opportunities and threats.
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Developing options that build on strengths and correct weaknesses is part of the ______ environment analysis.
Developing options that build on strengths and correct weaknesses is part of the ______ environment analysis.
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Making adjustments to strategy or implementation is difficult because ______ is difficult.
Making adjustments to strategy or implementation is difficult because ______ is difficult.
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Human decision processes suffer from ______ due to bounds on rationality.
Human decision processes suffer from ______ due to bounds on rationality.
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Strategic management involves managing an entire ______ or a corporation to achieve sustained superior performance.
Strategic management involves managing an entire ______ or a corporation to achieve sustained superior performance.
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Superior performance in strategic management is typically measured by ______ and profit growth.
Superior performance in strategic management is typically measured by ______ and profit growth.
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Sustained superior performance refers to achieving superior results over a ______ period, not just a short-term gain.
Sustained superior performance refers to achieving superior results over a ______ period, not just a short-term gain.
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Increased profitability and profit growth are directly linked to increasing ______ wealth.
Increased profitability and profit growth are directly linked to increasing ______ wealth.
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While profitability and profits are crucial, they are not the only ______ that matter to a business.
While profitability and profits are crucial, they are not the only ______ that matter to a business.
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The two core elements of strategic management are ______ strategy and implementing strategy.
The two core elements of strategic management are ______ strategy and implementing strategy.
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Business strategy focuses on actions within a company's ______ to achieve sustained superior performance.
Business strategy focuses on actions within a company's ______ to achieve sustained superior performance.
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Corporate strategy deals with questions about which ______ to be in and managing the relationships between them.
Corporate strategy deals with questions about which ______ to be in and managing the relationships between them.
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ROA stands for ______ on assets.
ROA stands for ______ on assets.
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The formula for calculating ROA is net income divided by ______ assets.
The formula for calculating ROA is net income divided by ______ assets.
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When analyzing a company's performance, it is important to consider both ROA and ______ growth.
When analyzing a company's performance, it is important to consider both ROA and ______ growth.
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To calculate profit growth, the general formula is [(Net Income for this year - Net Income for last year)/Net Income for last year] * ______.
To calculate profit growth, the general formula is [(Net Income for this year - Net Income for last year)/Net Income for last year] * ______.
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When last year's profits are negative, a ______ formula should be used to calculate profit growth.
When last year's profits are negative, a ______ formula should be used to calculate profit growth.
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The revised formula for calculating profit growth when last year's profits are negative is [(Net Income for this year + absolute value of Net Income for last year)/absolute value of Net Income for last year] * ______.
The revised formula for calculating profit growth when last year's profits are negative is [(Net Income for this year + absolute value of Net Income for last year)/absolute value of Net Income for last year] * ______.
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A company can have declining ROIC and declining profit growth yet perform ______ to competition.
A company can have declining ROIC and declining profit growth yet perform ______ to competition.
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Tesla Inc. is used as an example for illustrating the calculation of ______ growth when prior year profits are negative.
Tesla Inc. is used as an example for illustrating the calculation of ______ growth when prior year profits are negative.
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Flashcards
Deliberate Strategy Formulation
Deliberate Strategy Formulation
A structured approach including setting objectives and analysis of environments to guide strategic actions.
External Environment Analysis
External Environment Analysis
Evaluating external factors to identify potential opportunities and threats affecting the business.
Internal Environment Analysis
Internal Environment Analysis
Assessing internal strengths and weaknesses to inform strategic choices.
Emergent Strategy
Emergent Strategy
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Strategic Thinking
Strategic Thinking
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Decision-Making Biases
Decision-Making Biases
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Sustained Superior Performance
Sustained Superior Performance
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ROIC (Return on Invested Capital)
ROIC (Return on Invested Capital)
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Strategic Management
Strategic Management
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Superior Performance
Superior Performance
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Shareholder Wealth
Shareholder Wealth
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Elements of Strategic Management
Elements of Strategic Management
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Corporate Strategy
Corporate Strategy
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Responsibilities in Strategy Formulation
Responsibilities in Strategy Formulation
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When to Formulate Strategies
When to Formulate Strategies
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ROA
ROA
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Profit Growth Formula
Profit Growth Formula
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Revised Profit Growth Formula
Revised Profit Growth Formula
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Declining ROIC
Declining ROIC
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Net Income (NI)
Net Income (NI)
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Graphing ROIC
Graphing ROIC
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Identifying Competitors
Identifying Competitors
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Tesla Net Income Example
Tesla Net Income Example
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Study Notes
Introduction to Strategic Management
- Strategic management is managing a business or corporation to achieve sustained superior performance.
- Superior performance means profitability (ROIC) and profit growth greater than most competitors in the industry, consistently over several years (5-7).
- Profitability and profit growth increase shareholder wealth.
- Business goals extend beyond profitability, including social responsibility and ensuring stakeholder interests are not ignored.
- Strategic management involves formulating and implementing strategy.
What is Corporate Strategy?
- Business strategy focuses on actions within an industry to achieve sustained superior performance.
- Corporate strategy focuses on which businesses to be in and managing the interdependencies between those businesses.
Strategy Formulation and Implementation
- Business leaders are primarily responsible for formulating strategy; various functions contribute.
- The CEO has ultimate responsibility for corporate strategy, corporate officers and business heads support.
- The board of directors often has oversight.
- Strategy is formulated periodically, or in response to significant events like large opportunities, threats, or leadership changes.
- Deliberate strategy formulation involves defining objectives (e.g., increase ROIC), analyzing the external and internal environments (opportunities, threats, strengths, weaknesses), and selecting options to exploit opportunities and avoid threats.
- Emergent strategy elements develop as a result of evolving situations, learning, or new ideas.
Strategy Implementation
- Aligning organizational elements is key to effective strategy implementation.
- Ongoing management and adaptation are crucial for success as conditions evolve.
Strategic Thinking
- Viewing actions and events through the lens of sustained superior performance is critical for strategic thinking.
Factors Affecting Success
- Difficulties in achieving sustained superior performance include imperfect information, and bounded rationality—biases in decision-making processes.
Evaluating Business Performance
- Calculating Return on Assets (ROA) and Profit Growth over multiple years provides insights into business performance and competitiveness.
- Using the correct profit growth calculation formula is crucial, especially if prior-year profits were negative. The revised formula should be used in such cases.
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Description
This quiz covers the fundamentals of strategic management, focusing on achieving sustained superior performance and profitability. It delves into corporate strategy, business strategy, and the roles of leaders in formulating and implementing effective strategies. Prepare to explore the essential concepts that drive successful business practices.
