Strategy Formulation in Strategic Management
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Questions and Answers

What is the primary goal of the retrenchment strategy discussed in the text?

  • To expand the company's resources
  • To promote overstaffing
  • To increase competition within the industry
  • To reduce waste and cut costs (correct)

    • In what situations might a company adopt a retrenchment strategy according to the text?

  • When facing tough competition (correct)
  • In situations of excessive resource availability
  • During periods of stable growth
  • During a period of economic prosperity

    • What does a business turnaround strategy aim to achieve?

  • Encourage prolonged challenges
  • Promote external interference
  • Maintain financial distress
  • Restore profitability and resilience (correct)

    • Which of the following correctly describes the role of an outside specialist in a turnaround strategy?

    <p>Assist in helping the company overcome challenges temporarily</p> Signup and view all the answers

    When might a retrenchment strategy be considered necessary for a company?

    <p>During a recession or scarcity of resources</p> Signup and view all the answers

    What is the key difference between retrenchment and business turnaround strategies discussed in the text?

    <p>Targeted outcomes</p> Signup and view all the answers

    Which statement is true about the success of the retrenchment strategy as per the text?

    <p>Success depends on banks and other financing institutions</p> Signup and view all the answers

    When should the outside specialist be employed in a business turnaround strategy?

    <p>When the current chief executive steps back</p> Signup and view all the answers

    Which scenario makes the adoption of the retrenchment strategy necessary according to the text?

    <p>Economic recession and fierce competition</p> Signup and view all the answers

    What would primarily motivate a company to implement a turnaround strategy over retrenchment?

    <p>To enhance long-term sustainability</p> Signup and view all the answers

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