Business Strategy

Question 1

What are Mintzbergs 5 types of strategy

Answer 1

Intended: result of a deliberate process
Deliberate: intended plans put into action
Unrealised: not all planned strategies are implemented
Emergent: strategies created by unforeseen circumstances
Realised: result from a balance of the other types of strategy

Question 2

What should objectives be

Answer 2

Specific
Measurable
Achievable
Relevant
Time-bound

Question 3

What are the three broad types of stakeholder

Answer 3

Internal: sources of HR
Connected: sources of finance
External: all other interested parties

Question 4

Give Mendelow’s relationship between power and interest for stakeholers

Answer 4

Power/Interest
L/L - minimal effort
L/H - keep informed
H/L - keep satisfied
H/H - key players

Question 5

What model should be used for understanding the external environment

Answer 5

PESTEL

political, economic, social, technological, environmental, legal

Question 6

Where is scenario planning useful

Answer 6

long term view of strategy needed
firm operates in a turbulent environment
several factors influence the success of a strategy

Question 7

What is porters competitive advantage of nations model

Answer 7

Factor conditions
Firm strategy
Demand conditions - how firms perceive, interpret and respond to buyer needs
Related and supporting industries eg. proximity of suppliers

Question 8

What are basic factors for the competitive advantage of nations model

Answer 8

Natural resources, climate, unskilled labour. Anything inherited, or whose creation requires little investment

Question 9

What are some measures used to discourage international trade [3]

Answer 9

Tariffs or customs duties
Embargoes
Subsidiaries for domestic producers

Question 10

What is Porters five forces model

Answer 10

Used to analyse the state of competition in an industry

• suppliers
• customers
• substitute
• potential entrants
• competition between existing firms

Question 11

Give some limitations of the five-forces model [3]

Answer 11

• ignores role of the state
• not helpful for not-for-profits
• assumes management only seeks to maximise shareholder wealth

Question 12

What are the main stages of the industry life cycle

Answer 12

Introduction, Growth, Shakeout, Maturity, Decline

Question 13

What are the 9M’s

Answer 13

Summarises the resources and sources of competences
Men and woman
Money
Machines
Marketing
Materials
Management
Methods
Management information systems
Make up

Question 14

What is the value chain

Answer 14

The sequence of business activities by which value is added to the products or services produced by an entity

Question 15

What are the primary activities of the value chain

Answer 15

Inbound logistics
Outbound logistics
Operations
Marketing and sales
Service

Question 16

What are the considerations when thinking about outsourcing [5]

Answer 16

• can the firm do it them self
• can risk be managed better by outsourcing
• can the activity be controlled by a contract
• track record of the company looking to outsource to
• quality/cost of relationship

Question 17

What is harmon’s process-strategy matrix

Answer 17

Strategic importance vs process complexity
L/L: automate/outsource
L/H: outsource
H/L: automate
H/H: improve

Question 18

What is the BCG matrix

Answer 18

%rate of market growth / relative market share
H/H: star
H/L: Question mark
L/H: cash cow
L/L: Dog

Question 19

Limitations of the BCG matrix [3]

Answer 19

• other factors affect cash flow
• doesn’t consider risk
• difficulties in forecasting growth

Question 20

What are the three tests for ethics

Answer 20

Transparency, Effect, Fairness

Question 21

What is SWOT analysis

Answer 21

A method of corporate appraisal
Internal to the company; strengths / weaknesses
External to the company: opportunities / threats

Question 22

What are the three competitive strategies Porter argues are necessary

Answer 22

1. Cost leader; high profit, low costs
2. Stuck in the middle: low profit, high costs
3. Differentiator: high profit, high costs

Question 23

What is Porter’s generic strategies matrix

Answer 23

Competitive scope vs competitive basis
Broad/low cost: Cost leadership
Narrow/low cost: Cost focus
Broad/differentiation: Differentiation
Narrow/differentiation: Differentiation focus

The focus ones are on a specific niche area that they concentrate on

Question 24

What is Ansoff’s product matrix

Answer 24

Based on product vs market
Current/Current: market penetration
Current/New: market development
New/current: product development
New/New: diversification

Question 25

Benefits/reasons of organic growth [4]

Answer 25

• Gives them better understanding of the market and the product
• no suitable target for acquisition
• less disruption and resistance to change
• provides career opportunities for managers

Question 26

Drawbacks of organic growth [3]

Answer 26

• may intensify competition
• no synergies
• may be prohibitive barriers to entry in new markets

Question 27

Motives for acquiring companies [7]

Answer 27

Marketing advantages
Production advantages
Finance and management
Risk-spreading
Retain independence
Overcome barriers to entry
Outplay rivals

Question 28

Advantages/disadvantages for the franchiser [4/3]

Answer 28

Advantages

• rapid expansion and increasing market share
• franchisee has local knowledge and unit supervision
• franchiser has limited capital so low financial risk
• economies of scale

Disadvantages

• franchisee is largely independent so less control
• clash between local needs and strategy of the franchiser
• franchisees may break away as independent rivals

Question 29

What is a good way of evaluating strategies according to Johnson, Scholes and Whittington

Answer 29

Suitability , Acceptability (to shareholders), Feasibility (can it be implemented)

Question 30

What is return on capital employed and residual income

Answer 30

ROCE = profit for the period / average capital employed

RI = profits - (net assets x required rate)

Question 31

What are the 4 aspects of the balanced scorecard

Answer 31

Customer
Internal business
Innovation and learning
Finance

Question 32

Qualities of good information

Answer 32

Accurate
Complete
Confidential
User-friendly
Relevant
Authoritative
Time specific
Easy to use

Question 33

4 V’s of Big Data

Answer 33

Volume
Velocity
Veracity
Variety

Question 34

Different categories of cyber security [6]

Answer 34

Prevention / detection / deterrence / recovery procedures / correction procedures / threat avoidance

Question 35

What is Lewin’s Iceberg model

Answer 35

Identifies the key steps for implementing change

1. Unfreeze; recognise the need the change and sell it to the individuals
2. Move; ascertain the changes needed and adopt the new culture.
3. Refreeze; consolidate the changes and reinforce them

Question 36

Types of change

Answer 36

According to Johnson, Scholes and Whittington
Management role vs Nature of change
Proactive/incremental: tuning
Proactive/non-incremental: planned
Reactive/incremental: adaptation
Reactive/non-incremental: forced

Question 37

What is market segmentation

Answer 37

the division of the market into homogeneous groups of potential customers who may be treated similarly for marketing purposes

Question 38

How would we measure the attractiveness of a market segment

Answer 38

MASS D
Measurable
Accessible
Stable
Substantial
Defensible