1. Strategy & Strategic Management

Question 1

Definition of strategy:

Answer 1

Strategy is the direction and scope of an organization over the long-term which achieves advantage for the organization through its configuration of resources within a changing environment to meet the needs of markets and to fulfill stakeholder expectations.

OR

The determination of the long-term goals of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.

Question 2

What are the 2 major approaches for strategic management?

Answer 2

1. Market-oriented approach
2. Resource-oriented approach

Question 3

Market-oriented approach:

Answer 3

-External focus
-How to position the product to meet market requirements
-5 Forces of Porter: considering the macro economic environment
-Environment-led (FIT)

Question 4

Resource-oriented approach

Answer 4

-Internal focus
-How to leverage the resources and competences available in the company in an optimal way to achieve market success
-further development to knowledge and capability approaches
-Resource-led (STRETCH)

Question 5

What are the horizons of strategic work? (Graph in the slides)

Answer 5

-Horizon 1 (near future: 1 to 3 years): Extend and defend the core business
-Horizon 2 (medium-term: 2 to 5 years): Build emerging businesses
-Horizon 3 (long-term: 5 to 12 years): Create viable options

Question 6

What are the levels of strategy?

Answer 6

-Corporate level strategy
-Business level strategy
-Functional strategies

Question 7

Corporate level strategy:

Answer 7

Corporate level strategy deals with the overall purposes and scope of an organization and how value will be added to the different business units of the company.

Question 8

Business level strategy:

Answer 8

Business level strategy is all about how to compete successfully in particular markets.

Question 9

Functional strategies:

Answer 9

Functional strategies deal with how the component part of an organization deliver effectively the corporate and business level strategies in terms of resources, processes and people.

Question 10

Mission:

Answer 10

A mission statement provides employees and stakeholders with clarity about what the
organization is fundamentally there to do
ex: Be healthy and fit

Question 11

Vision/strategic intent:

Answer 11

A vision statement is concerned with the future the organization seeks to create. It should be ambitious but hypothetically possible.
ex: To run the London marathon

Question 12

Goal:

Answer 12

General statement of aim or purpose.
ex: Lose weight and strenghten muscles.

Question 13

Objective:

Answer 13

Quantification (if possible) or more precise statement of the goal.
ex: Lose 5kg by Septemner 1st.

Question 14

Strategic capability:

Answer 14

Resources, activities and processes. Some will be unique and provide “competitive advantages”.
ex: proximity to a fitness center, a successful diet.

Question 15

Strategies:

Answer 15

Long-term direction.
ex: Exercise regularly, stick to the diet…

Question 16

Business model:

Answer 16

How product, service and information “flow” between participating parties; how value is created, delivered and captured.

Question 17

Control:

Answer 17

Control is the monitoring of actions to:
-Assess the effectiveness of strategies and actions
-Modify as necessary strategies and/or actions
ex: monitor weight

Question 18

Why do companies need strategies?

Answer 18

Strategies help define and express the purpose of an organization to stakeholders.

Question 19

Stakeholders:

Answer 19

Stakeholders are those individuals or groups of people that depend on an organization to fulfill their own goals and on whome, in turn, the organization depends.

Question 20

What is the “Stakeholders Map”?

Answer 20

The stakeholder map is a tool to analyse and prioritise different stakeholders.

Question 21

Why is the stakeholder map useful?

Answer 21

The stakeholder map identifies stakeholder power and attention in order to understand political priorities.

Question 22

Why is the SMART framework a useful tool?

Answer 22

The SMART framework is an acronym used as a mnemonic device to establish criteria for effective goal-setting and objective development.

Question 23

What are the individual components of the SMART framework?

Answer 23

Specific
Measurable
Attainable
Relevant
Time-bound

Question 24

Network effect:

Answer 24

Network effect is a phenomenom whereby an increased number of participants improve the value of a good/service.

Question 25

Values:

Answer 25

Statements of corporate values communicate the underlying and enduring core principles that guide an organization’s strategy and define the way that the organization should operate.

Question 26

Objectives:

Answer 26

Objectives are statements of specific outcomes that are
to be achieved.