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Questions and Answers
What is the definition of strategy according to the text?
The direction and scope of an organization over the long term, aligning resources with the changing environment to meet stakeholder expectations.
What are the 3 different types of strategy mentioned in the text?
Functional, Business, Corporate.
What is the purpose of Environmental scanning in the Strategic Management Model?
To monitor, evaluate, and disseminate information from the environment to key people within the corporation.
What does Strategy formulation involve?
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What is the goal of Strategy implementation?
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What is the purpose of Evaluation and control in the strategic planning process?
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What are the benefits of a strategic plan, as mentioned in the text?
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What are the 4 main types of business strategies outlined in the text?
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What is Vertical integration in business strategy?
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When is Backward vertical integration effective?
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Study Notes
Strategy Definition and Types
- A strategy is a plan of action designed to achieve a particular goal or set of goals.
Strategic Management Model
- Environmental scanning is the process of gathering and analyzing data about the external environment to identify opportunities and threats.
- Strategy formulation involves developing a strategy by analyzing the internal and external environment, identifying options, and selecting the best option.
- Strategy implementation involves translating the strategy into action by allocating resources, assigning responsibilities, and establishing a timeline.
- Evaluation and control is the process of monitoring and adjusting the strategy to ensure it is achieving its goals.
Benefits of Strategic Planning
- A strategic plan helps to clarify the organization's mission, vision, and objectives.
- It provides a framework for decision-making and resource allocation.
- It helps to identify and prioritize opportunities and threats.
- It enables the organization to respond to changes in the environment.
Business Strategies
- There are four main types of business strategies: cost leadership, differentiation, focus, and integration.
- Cost leadership involves being the lowest-cost producer in the industry.
- Differentiation involves creating a unique product or service that stands out from the competition.
- Focus involves targeting a specific niche or segment of the market.
- Integration involves combining different businesses or operations to create a competitive advantage.
Vertical Integration
- Vertical integration is a business strategy that involves controlling the production and distribution of a product or service.
- Backward vertical integration is when a company controls its suppliers, and it is effective when there are high volumes of production and high switching costs.
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Description
Explore the concept of business strategy and its importance in achieving organizational goals. Learn about the three different types of strategies that businesses can implement to improve performance and increase profits.
