Business Strategy

Question 1

What is strategy?

Answer 1

The direction and scope of an whole organisation over the long term

Question 2

What is a strategic business unit?

Answer 2

A section within a larger business responsible for planning, developing, producing and marketing

Question 3

What is corporate strategy?

Answer 3

Strategies determine for the business as a whole at the high level

Question 4

What are business strategies?

Answer 4

Strategies for the SBU’s and individual markets

Question 5

What are the functional strategies?

Answer 5

Strategies for the main functions within the SBU

Question 6

What are the four stages of strategic planning?

Answer 6

Analysis, choice, implementation, review and control

Question 7

What is the rational approach?

Answer 7

It comprises internal and external analysis

Question 8

What is a resource based approach? What is the risk?

Answer 8

Inside out - focuses on developing the internal things

Might fail in the long term to react to what is going on around it

Question 9

What is a positioning based approach?

What is the risk?

Answer 9

Focuses on the external environment and then adapts to meet them - and outside in approach
Customers needs constantly change so you have to constantly struggle to keep up

Question 10

What are emergent strategies?

Answer 10

Strategies which EMERGE over time in response to the environment. There is a lot of trial and error with this as the end goal is not clear, hence you must assess them often.

Question 11

What is external analysis?

Answer 11

Looking at factors outside the business which present both opportunities or threats.

Question 12

What is the task environment?

Answer 12

This relates to factors of particular relevance to the business e.g competitors, customers and suppliers

Question 13

What is the general environment?

Answer 13

Considers all outside influences that the business operates in.

Question 14

What is the difference between static and dynamic environments?

Answer 14

Static environments are slow to change and simple. Dynamic environments are dangerous and difficult and change often

Question 15

What is pestel?

Answer 15

The outside political, econ, social, tech, ecological and legal factors to consider that influence a business

Question 16

What are the five forces?

Answer 16

New entrants, bargaining power (of suppliers or customers, substitutes, the intensity of competition

Question 17

What are the four types of competitor?

Answer 17

Brand, industry, generic and form

Question 18

What are the four types of reaction?

Answer 18

Laid back, tiger, selective and stochastic (hard to predict)

Question 19

What is internal analysis?

Answer 19

Looking at factors inside the business - the strengths and weaknesses

Question 20

What does a resource audit look at?

Answer 20

Men, machines, money, material, markets, make up, management, methods, MIS (thinking of new ideas). these are known as the 9 m’s, where gaps are exposed it is often the case that they must be filled

Question 21

What is the value chain analysis?

Answer 21

It measures the sequence of business activities which add value to products or services - so the cost of the activity is weighed against the sales revenue

Question 22

What are primary activities in the value chain?

Answer 22

They are activities that create value and are directly concerned with the product or service

Question 23

What are support activities in the value chain?

Answer 23

They are activities that enable the primary activities to take place with maximum efficiency

Question 24

What is the product lifecycle?

Answer 24

It applies the life cycle theory to products and services
Decelopment - lots of money in
Introduction - low revenue and high marketing costs
Growth - start to benefit from econ of scale
Maturity - you reach critical mass
Decline - you end up with extra and have to take measures to shift it - run it’s course

Question 25

What is the BCG matrix?

Answer 25

It Andalusia product portfolio to assess growth and market share and classifies products as one of the following
Problem child with negative cash flow
Star with good performance but constant risk of new entrants
Cash cow with a positive cash flow and less risk
Dog question of when not if to dump

Question 26

What is the SWOT technique?

Answer 26

It involves looking at strengths opportunities weaknesses and threats to perform a corporate appraisal and assess the strategic position. This can then be used to create other strategies

Question 27

What is stakeholder mapping?

Answer 27

It categorises stakeholders in to four categories and establishes a way of keeping them satisfied with strategy stems from interest and power of the stakeholders

Question 28

What are porters generic strategies and what are they used for?

Answer 28

They are used to determine how to compete. They focus on how a business can find a position that can’t be replicated - so differentiation or cost leadership.