Strategic Management Key Terms

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Questions and Answers

What is a key goal for a firm to strive for in strategic management?

Sustained competitive advantage (correct)

Reduced operational costs

Short-term profitability

Increased market share

Who plays a crucial role in an organization's strategic planning?

Strategists (correct)

Shareholders

Employees

Customers

What does a vision statement answer?

What is our business?

What do we want to become? (correct)

How will we achieve our goals?

What are our values?

What are external opportunities and threats related to?

Trends and events that could benefit or harm an organization Signup and view all the answers

What is an example of an external opportunity?

The availability of capital Signup and view all the answers

What is an internal strength?

A controllable activity that an organization performs exceptionally well Signup and view all the answers

What is the main difference between long-term objectives and annual objectives?

Long-term objectives are achieved in more than one year, whereas annual objectives are achieved in one year or less. Signup and view all the answers

What is the primary purpose of strategic management?

To shape the organization's own future and exert control over its own destiny. Signup and view all the answers

What are the means by which long-term objectives will be achieved?

Strategies. Signup and view all the answers

What should long-term objectives be?

Challenging, measurable, consistent, reasonable, and clear. Signup and view all the answers

What is the relationship between annual objectives and long-term objectives?

Annual objectives are short-term milestones that help achieve long-term objectives. Signup and view all the answers

What are the benefits of strategic management?

It allows organizations to be proactive and shape their own future. Signup and view all the answers

What are examples of strategies that organizations may use?

Geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures. Signup and view all the answers

What should policies be focused on?

The means by which annual objectives will be achieved. Signup and view all the answers

What is the primary focus of strategic management?

To make cross-functional decisions that enable an organization to achieve its objectives Signup and view all the answers

What is the result of strategic planning?

A company's game plan Signup and view all the answers

What is the relationship between strategic management and strategic planning?

Strategic management is used synonymously with strategic planning Signup and view all the answers

What is the primary goal of engaging in strategic management?

To achieve long-term objectives Signup and view all the answers

What is NOT a benefit of engaging in strategic management?

Improving short-term profitability Signup and view all the answers

Why do some firms not engage in strategic planning?

Because they do not see the value Signup and view all the answers

What is a pitfall of strategic planning?

Not having a clear vision Signup and view all the answers

What is the connection between business and military strategy?

They share some common principles Signup and view all the answers

Study Notes

Key Terms in Strategic Management

Long-term objectives: specific results an organization seeks to achieve in pursuing its basic mission, typically more than one year, and should be challenging, measurable, consistent, reasonable, and clear.
Strategies: means by which long-term objectives will be achieved, including geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures.

Annual Objectives and Policies

Annual objectives: short-term milestones that organizations must achieve to reach long-term objectives, which should be measurable, quantitative, challenging, realistic, consistent, and prioritized.
Policies: means by which annual objectives will be achieved, established at the corporate, divisional, and functional levels in a large organization.

The Strategic-Management Model

The comprehensive strategic-management model involves strategy formulation, implementation, and evaluation activities.

Benefits of Strategic Management

Strategic management allows an organization to be more proactive than reactive in shaping its own future.
It enables an organization to initiate and influence activities, thus exerting control over its own destiny.
A firm must strive to achieve sustained competitive advantage.

Key Roles and Concepts

Strategists: individuals most responsible for the success or failure of an organization, responsible for gathering, analyzing, and organizing information.
Vision and Mission Statements: a vision statement answers the question “What do we want to become?” while a mission statement answers the question “What is our business?”
External Opportunities and Threats: economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organization.
Internal Strengths and Internal Weaknesses: an organization’s controllable activities that are performed especially well or poorly, determined relative to competitors.

Strategic Management Process

The strategic-management process involves strategy formulation, implementation, and evaluation activities.
Integration of analysis and intuition is necessary in strategic management.
Strategic management enables organizations to achieve their objectives through cross-functional decisions.

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Description

This quiz covers key terms in strategic management, including long-term objectives and strategies. Learn to define and identify these important concepts.