Strategic Management Chapter 10
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Questions and Answers

What characterizes a sustainable competitive advantage?

  • It relies solely on outdated technology.
  • It is difficult or costly for competitors to imitate. (correct)
  • It is easily replicated by competitors.
  • It is achieved by offering the lowest prices.

    • Which of the following is not listed as a source of competitive advantage?

  • Cost and quality
  • Customer service (correct)
  • Technology
  • Financial resources

    • What is the primary focus of strategic intent in an organization?

  • Allocating resources to various departments.
  • Maximizing short-term financial profits.
  • Developing diverse product lines.
  • Focusing all energies on a unifying and compelling goal. (correct)

    • Which level of strategy is responsible for setting the overall direction for an enterprise?

    <p>Corporate strategy</p> Signup and view all the answers

    Which of the following defines business strategy?

    <p>It determines how a division will compete in its product domain.</p> Signup and view all the answers

    In the context of strategic management, which option describes a comprehensive plan for resource allocation?

    <p>Strategy</p> Signup and view all the answers

    What aspect is essential when evaluating the concept of competitive advantage?

    <p>The proficiency in outperforming competitors consistently.</p> Signup and view all the answers

    Which of the following does not belong to the levels of strategy framework?

    <p>Operational</p> Signup and view all the answers

    What is the primary focus of strategic management?

    <p>Formulating and implementing strategies to achieve long-term goals</p> Signup and view all the answers

    Which component is essential in the process of strategy formulation?

    <p>Assessing existing strategies and environment</p> Signup and view all the answers

    What does strategy implementation primarily involve?

    <p>Allocating resources and activating strategies</p> Signup and view all the answers

    What question does NOT typically belong in a set of strategic questions?

    <p>How can we reduce our costs?</p> Signup and view all the answers

    What is the role of stakeholders in strategic management?

    <p>To influence the mission and support organizational strategies</p> Signup and view all the answers

    A good mission statement should clarify all of the following EXCEPT:

    <p>How to triple profits in one year?</p> Signup and view all the answers

    Which of the following is NOT part of the strategic analysis process?

    <p>Comparing personal employee performance</p> Signup and view all the answers

    To create competitive advantage, strategy formulation must consider:

    <p>Existing market conditions and strategic goals</p> Signup and view all the answers

    What is the primary aim of a differentiation strategy?

    <p>To offer unique products or services</p> Signup and view all the answers

    Which of the following describes focused differentiation?

    <p>A strategy offering unique products to a specific market segment</p> Signup and view all the answers

    What differentiates the focused cost leadership strategy from generic cost leadership?

    <p>It focuses on a specific market segment</p> Signup and view all the answers

    Which of the following is NOT identified as a failure of strategic planning?

    <p>Effective participation from all stakeholders</p> Signup and view all the answers

    What does strategic control primarily ensure?

    <p>That strategies are well implemented</p> Signup and view all the answers

    Which management aspect is crucial for supporting strategy implementation?

    <p>Organizing</p> Signup and view all the answers

    What type of governance is concerned with the control and monitoring of top management?

    <p>Corporate governance</p> Signup and view all the answers

    Which of the following best describes a cost leadership strategy?

    <p>Operating with lower costs than competitors</p> Signup and view all the answers

    What typically represents an organization's core values?

    <p>Broad beliefs about appropriate behavior</p> Signup and view all the answers

    Which of the following is NOT considered a typical operating objective of a business?

    <p>Organizational culture</p> Signup and view all the answers

    What is a core competency?

    <p>A special strength providing competitive advantage</p> Signup and view all the answers

    During a SWOT analysis, which aspect is considered an internal factor?

    <p>Internal weaknesses</p> Signup and view all the answers

    Which of the following best describes an indicator of financial health as an operating objective?

    <p>Net profit margins and cash flow</p> Signup and view all the answers

    Which of the following is NOT one of Porter’s five strategic forces affecting industry competition?

    <p>Market share variance</p> Signup and view all the answers

    In the BCG matrix, which quadrant typically represents business units with low market share but high market growth?

    <p>Question Marks</p> Signup and view all the answers

    Which of the following would be considered a potential core competency for an organization?

    <p>Having superior technology</p> Signup and view all the answers

    In the context of organizational analysis, what does sustainability refer to?

    <p>Long-term viability of the company</p> Signup and view all the answers

    What is the primary objective of using a portfolio planning model in corporate-level strategy formulation?

    <p>Achieve the best mix of investments</p> Signup and view all the answers

    Which of the following describes an aspect of an organization's operating objectives related to product quality?

    <p>Consistent adherence to customer standards</p> Signup and view all the answers

    Which aspect of the BCG matrix helps in assessing the potential success of a business unit?

    <p>Market growth rate</p> Signup and view all the answers

    Which factor influences the bargaining power of customers?

    <p>The availability of substitute products</p> Signup and view all the answers

    What does the intensity of rivalry among firms in an industry primarily indicate?

    <p>The number of competitors in the market</p> Signup and view all the answers

    What would likely reduce the threat of new entrants in an industry?

    <p>High customer loyalty to established brands</p> Signup and view all the answers

    In Porter’s model, which of the following factors increases the bargaining power of suppliers?

    <p>Concentration of suppliers in the industry</p> Signup and view all the answers

    Which of the following is the preferred strategy for Dogs in the BCG matrix?

    <p>Retrenchment/divestiture</p> Signup and view all the answers

    In the BCG matrix, which type of business is described as having a high share and high growth?

    <p>Stars</p> Signup and view all the answers

    What is the primary focus of concentration strategies in growth?

    <p>Expanding within the same business area</p> Signup and view all the answers

    Which strategy would be suitable for a promising question mark in the BCG matrix?

    <p>Growth</p> Signup and view all the answers

    What does Chapter 11 bankruptcy primarily protect a firm from?

    <p>Creditors while reorganizing</p> Signup and view all the answers

    Which of the following is NOT a method of retrenchment?

    <p>Reinvestment</p> Signup and view all the answers

    What is the main goal of diversification strategies?

    <p>Growing by acquiring new business areas</p> Signup and view all the answers

    Which of the following strategies is a form of vertical integration?

    <p>Acquiring suppliers</p> Signup and view all the answers

    Study Notes

    Chapter 10: Strategy and Strategic Management

    • This chapter discusses the process and importance of strategic management
    • Strategic management is the process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage
    • It involves identifying essential elements in strategic analysis
    • Alternative corporate strategies are compared, along with business-level strategies
    • The foundations for strategy implementation are described

    Strategic Management (Concepts)

    • Strategy is a comprehensive plan guiding resource allocation to achieve long-term organizational goals
    • Strategic intent focuses all organizational energies on a unifying and compelling goal
    • Competitive advantage is the ability to outperform competitors
    • Sustainable competitive advantage is difficult or costly for competitors to imitate

    Strategic Management (Sources of Competitive Advantage)

    • Technology
    • Cost and quality
    • Knowledge and speed
    • Barriers to entry
    • Financial resources

    Levels of Strategies

    • Corporate: Sets long-term direction for the entire enterprise
    • Business: Specifies how a division or strategic business unit will compete in its specific product or service domain
    • Functional: Guides the use of resources within a specific area of operation

    Strategic Management Process

    • Strategic analysis: Analyzing the organization, the environment, its competitive positioning, and current strategies
    • Strategy formulation: The process of developing a new or revised strategy; involves assessing existing strategies and the organization and environment to create new strategies
    • Strategy implementation: The process of allocating resources and putting strategies into action
    • All organization and management systems must be mobilized to support and reinforce the accomplishment of strategies

    Essentials of Strategic Analysis

    • Strategic Questions:
      • Mission
      • Customers
      • Customer value
      • Results
      • Plan
    • Analysis of mission focuses on the reason for an organization's existence and addresses:
      • What are we moving towards?
      • What is our dream?
      • What kind of difference do we make?
      • What do we want to be known for?
    • Stakeholders: Individuals and groups affected by the organization.
    • Core values are broad beliefs about appropriate behavior.
    • Organizational culture reflects the predominant value system.
    • Operating objectives are results organizations try to achieve.
    • Typical operating objectives include profitability, sustainability, social responsibility, financial health, cost efficiency, customer service, product quality, market share, human capacity, and innovation.
    • Core competency is a special strength that gives the organization a competitive advantage.
    • SWOT analysis examines internal strengths and weaknesses and external opportunities and threats.
    • Porter's model of five strategic forces affects industry competition:
      • Bargaining power of suppliers
      • Bargaining power of customers
      • Threat of new entrants
      • Threat of substitute products
      • Level of competition/rivalry among firms in the industry

    Corporate-Level Strategy Formulation

    • Portfolio planning seeks the best mix of investments among alternative business opportunities
    • BCG Matrix analyzes business opportunities according to market growth rate and market share

    Growth Strategies

    • Concentration strategies: Grow within the same business area
    • Diversification strategies: Acquire or invest in new and different business areas (Related and Unrelated)
    • Integration: Acquire suppliers or distributors (Vertical integration)

    Retrenchment and Restructuring Strategies

    • Liquidation: Business closes and sells assets to pay creditors
    • Downsizing: Decreases the size of operations
    • Divestiture: Sells off parts to refocus on core business areas
    • Turnaround strategy: Tries to fix specific performance problems

    Global Strategies

    • Globalization: Standardising products and advertising across a global market
    • Multidomestic: Customising for local markets
    • Transnational: Balancing global efficiencies with local market responsiveness.

    Cooperative Strategies

    • Strategic alliances: Partnerships between two or more organizations to pursue mutual interest
    • Types of alliance:
      • Sourcing alliances.
      • Distribution alliances.
      • Supplier alliances.

    Co-opetition

    • Working with rivals on projects of mutual benefit

    Business-Level Strategy Formulation

    • Porter's competitive strategies (Gaining Competitive Advantage):
      • Differentiation strategy (uniqueness)
      • Cost leadership strategy (lower cost than competitors)
      • Focus strategy (focused differentiation / focused cost leadership)

    Strategy Implementation

    • Supporting strategies in every aspect of management (planning, controlling, organizing, leading)
    • Strategic control (implementing strategies and modifying poor strategies)
    • Corporate governance (control and monitoring of management)
    • Strategic leadership (inspiring people to continually adapt, refine, and improve strategy implementation) -Critical tasks for strategic leadership: Maintaining strategic control, being the guardian of trade-offs, creating a sense of urgency, ensuring everyone understands the strategy, being a teacher

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    Management - Chapter 10 Strategy & Strategic Management (5th Canadian)

    Description

    This quiz covers Chapter 10 on Strategy and Strategic Management, focusing on the process of strategic management and its importance in achieving long-term goals. You'll explore concepts such as strategic intent, competitive advantage, and the sources that contribute to a sustainable competitive edge. Test your understanding of key elements in strategic analysis and the foundations of strategy implementation.

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