Strategic Management Chapter 4 Quiz

Chapter 4: The Internal Assessment

• The chapter focuses on internal assessments for strategic management.
• Internal assessments examine a firm's internal strengths and weaknesses.

Learning Objectives (Page 2)

• 4.1: Describe the nature and role of internal assessment in formulating strategies.
• 4.2: Discuss the nature and role of management in formulating strategies.
• 4.3: Discuss the nature and role of marketing in formulating strategies.
• 4.4: Discuss the nature and role of finance and accounting in formulating strategies.
• 4.5: Discuss management information systems (MIS) in terms of formulating strategies.
• 4.6: Explain how to develop and use an Internal Factor Evaluation (IFE) Matrix.

The Process of Performing an Internal Audit (Page 5)

• Gathering, assimilating, and prioritizing information about management, marketing, finance, accounting, production/operations, research and development (R&D), and management information systems operations.
• Provides opportunities for participants to understand how their jobs, departments, and divisions fit into the overall firm.

The Resource-Based View (RBV) (Pages 6-8)

• (1 of 3): Internal resources are more important than external factors in achieving and sustaining competitive advantage.
• (2 of 3): Organizational performance is primarily determined by internal resources, classified as tangible (e.g., physical assets) or intangible (e.g., trademarks).
• (3 of 3): For a resource to be valuable, it must be rare, hard to imitate, or not easily substitutable. These characteristics are termed empirical indicators.

Key Internal Forces (Page 9)

• Distinctive competencies: Firm strengths that competitors cannot easily match or imitate.
• Building competitive advantage relies on leveraging distinctive competencies.

Management (Page 10)

• Management consists of four basic activities: planning, organizing, motivating, and controlling.

The Basic Functions of Management (Pages 11-12)

• Planning: Forecasting, establishing objectives, devising strategies, and developing policies.
• Organizing: Organizational design, job specialization, job descriptions, span of control, coordination, job design, and job analysis.
• Motivating: Leadership, communication, work groups, behavior modification, delegation of authority, job enrichment, job satisfaction, needs fulfillment, organizational change, employee morale, and managerial morale.
• Controlling: Quality control, financial control, sales control, inventory control, expense control, analysis of variances, rewards, and sanctions.

Production/Operations (Page 13)

• Production/operations function encompasses activities transforming inputs into goods and services.
• Production/operations management deals with inputs, transformations, and outputs that vary across industries and markets.

Integrating Strategy and Culture (Page 14)

• Organizational culture significantly influences planning activities.
• If strategies capitalize on cultural strengths (e.g., strong work ethic), management can readily implement changes.

Organizational Culture (Page 15)

• Organizational culture is a behavioral pattern developed as an organization learns to handle external and internal issues.
• It is considered valid and taught to new members as the correct way to perceive, think, and feel.

Table 4.4 Aspects of Organizational Culture (Page 16)

• A table showcasing various dimensions of organizational culture, ranging from low to high on a scale.

Management Audit Checklist (Pages 17-18)

• A checklist of questions focusing on strategic-management concepts, objective/goal measurability, managerial planning/delegation, and organizational structure appropriateness.
  • Additional questions address employee morale, turnover, absenteeism, and organizational reward/control systems effectiveness.

Marketing (Page 19)

• Marketing is the process of defining, anticipating, creating, and fulfilling customer needs and wants.

Five Basic Activities in Marketing (Page 20)

• Marketing research and target market analysis.
• Product planning.
• Pricing products.
• Promoting products.
• Placing or distributing products.

Marketing Research and Target Market Analysis (Page 21)

• Marketing research systematically gathers, records, and analyzes data concerning the marketing of goods and services.
• Target market analysis examines and evaluates consumer needs and wants, uncovering strengths and weaknesses.

Product Planning (Page 22)

• Product planning includes test marketing, product/brand positioning, warranties, packaging, determining product options/features/style/quality, deleting old products, and customer service.
• Crucial when pursuing product development or diversification.

Pricing (Page 23)

• Pricing determines the amount an individual exchanges for a product offering.
• Pricing strategies often depend on costs, demand, competition, and customer needs.

Promotion (Page 24)

• Promotion encompasses marketing activities like advertising, sales promotion, public relations, personal selling, and direct marketing.
• Common promotional tools include TV advertising, magazine ads, billboards, websites, and public relations.

Channels of Distribution (Page 25)

• Channels of distribution involve intermediaries that move a product from producer to end customer.
• Examples include wholesalers, retailers, brokers, facilitators, agents, and distributors.

Marketing Audit Checklist (Pages 26-27)

• A checklist of questions covering market segmentation, positioning among competitors, distribution reliability/cost effectiveness, market research, product/service quality/customer service, pricing appropriateness, promotional strategy effectiveness, and internet presence.

Finance/Accounting Functions (Pages 28-31)

• (1 of 4): Finance/accounting decisions comprise investment, financing, and dividend decisions.
• (2 of 4): Investment decisions (capital budgeting) involve allocating and reallocating resources to projects, products, assets, and divisions.
• (3 of 4): Financing decisions determine the optimal capital structure and methods of raising capital.
• (4 of 4): Calculating and evaluating financial ratios (e.g., return on assets, return on equity, times interest earned.) to ascertain a company's financial strength, industry comparisons, and competitive trends.

Figure 4.2 Financial Ratio Trend Analysis (Page 32)

• Contains financial ratio trend graphs.

Table 4.9 A Summary of Key Financial Ratios (Pages 33-35)

• Summarizes key financial ratios, including liquidity, leverage, activity, and profitability ratios, along with their calculations, definitions, and typical uses.

A Summary of Key Financial Ratios (Pages 35-36)

• Provides a summary of key financial ratios, their calculations, and the insights they provide about profitability, activity, and growth.

Finance/Accounting Audit Checklist (Pages 37-38)

• Questions for assessing a company's financial condition, including financial strength, short-term/long-term capital needs, working capital, capital budgeting, dividend policies, investor relations, financial manager experience, and debt levels.

Management Information Systems (Page 39)

• Management Information Systems receive input from both internal and external evaluations to improve organizational decision-making by collecting, coding, storing, synthesizing, and presenting appropriate information.

Business Analytics (Page 40)

• Business analytics utilizes software to analyze large data sets to aid executive decision-making.
• Also known as predictive analytics, machine learning, or data mining.

The Internal Factor Evaluation (IFE) Matrix (Page 41)

• A process to evaluate a company's internal factors, including assigning weights and ratings to factors to create insights and overall weighted scores.

Figure 4.3 How to Gain and Sustain Competitive Advantages (Page 42)

• A cyclical model representing how a company can achieve and sustain competitive advantages through strategic planning, implementation, evaluation, and monitoring.

This quiz focuses on internal assessment as discussed in Chapter 4 of strategic management. You'll explore the various roles of management, marketing, finance, and information systems in formulating effective strategies. Test your understanding of the Internal Factor Evaluation (IFE) Matrix and its significance in strategic planning.