1. Strategy process Flashcards
1
Q
Advantages of a strategy process?
A
- Long-term planning (forces to plan ahead)
- Improved control
- Identifies risks
- Creativity
2
Q
Disadvantages of a strategy process?
A
- Conflict between corporate goals vs. own benefits (e.g. profit maximation -> fire yourself)
- Expensive process
- Long-term planning but managers are struggling with short-term problems
- Distrust in the process/methods
- Hard to forecast correctly / in detail
- Not flexible -> “meet goals at all costs” mentality
- Insufficient or incorrect analysis -> basis for strategy process/decisions
3
Q
Levels of strategy & focus areas of each level?
A
- CORPORATE
company as a whole
what industry
in which markets - BUSINESS
strategic business units
how to succeed in the chosen markets
how to gain competitive advantage
how to meet customer needs - FUNCTIONAL
day-to-day management (HRM/marketing/info-tech-operational strategy)
4
Q
Types of strategy?
A
- Rational/formal planning
analysis
external
internal
stakeholder
gap analysis
choice
implementation - Incrementalism
- Freewheeling opportunism
- Emergent approach
5
Q
Which type of strategy to choose?
A
- Formal planning (rational/emergent)
stable industries
inexperienced managers
time to analyse/prepare
no need to make quick changes - Informal approach (freewheeling/incrementalism)
Dynamic/fast paced environments
Experienced & innovative managers
No need for significant external financing
Investors typically require detailed plan for the future
6
Q
NFPs: 3Es
A
- Efficiency (input/output maximiation -> doing things right)
- Economic (small input as possible)
- Effectiveness (big output as possible -> doing the right things)
7
Q
Perspectives to strategic planning?
A
- Traditional approach (stakeholders)
- Market-led (positioning) approach
- Resource-based (competence-led) approach
8
Q
Strategic management accountant focuses on?
A
- External focus
- Forward-looking
