Ch.2 - Strategy and Business

Question 1

What is strategy?

Answer 1

• the direction and scope of an organisation over the long term to meet the needs of the markets and to fulfill stakeholder expectations
• looks at how to gain a sustainable competitive advantage

Question 2

What types of strategic approaches are there?

Answer 2

1. rational approach
2. emergent approach
3. resource-based approach
4. positioning approach

Question 3

Explain rational approach + advantages and disadvantages.

Answer 3

• traditional, formal and top-down approach (internal and external analysis, corporate appraisal, mission and objectives, GAP, strategic choice, strategy implementation, review and control)

Advantages:
o Framework, long-term planning, goal congruence, considers needs of stakeholders, optimised use of resources, monitors progress

Disadvantages:
o Lack of evidence that it leads to success, may need to be more dynamic, reduces initiative and innovative thinking, political infighting

Question 4

Explain emergent approach.

Answer 4

• strategies that emerge over time in response to the environment
• they are tried and developed as they are implemented, bottom-up approach
• adopted by organisations in dynamic environments with flexible, decentralised organisational structures

Question 5

Explain resource-based approach.

Answer 5

• focus on developing internal resources and competences that are hard to imitate
• risk of failing to react to long-term industry trends

Question 6

Explain positioning approach.

Answer 6

• focus on analysing external environment to identify customer needs
• forced to constantly evolve and develop new competencies