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Question 1

what is Strategy

Answer 1

The adoption of courses action and the allocation of resources necessary to achieve the goal.

Question 2

What does “imperative” mean

Answer 2

A variable that dictates structure.

Question 3

How does an organisation determine its strategy?

Answer 3

Planning mode strategy as an explicit and systematic set of guidelines developed in advance.
It reduces the determination of a strategy to a well thought out process where rationality plays a significant role.

Question 4

What is Corporate level strategy:

Answer 4

• attempts to define the nature of businesses in which the firm seeks to operate
• If a corporation is more then one line of business it will need a corporate level strategy.

Question 5

What is Business level strategy:

Answer 5

• refers to those strategies adapted by business units of the organisation.
• seeks to answer the question: How should we compete in each of our businesses?

Question 6

What is Chandlers Thesis?

Answer 6

-About relationship between an organisations strategy and its structure
-concluded that changes in an organisations strategy led to change in its structure.
- “unless structure follows strategy, inefficiency results
“

Question 7

What are Miles and Snow four strategic types:

Answer 7

Defender
Prospector
Analyser
Reactors

Question 8

Define Defender strategic type, and some characteristics

Answer 8

Organisations whose strategy is to produce a limited set of products directed at a narrow segment of the total potential market.
Seek stability.
Prevent competitors from taking market share.
High Horizontal differentiation.

Question 9

Define Prospector strategic type, and some characteristics

Answer 9

Organisations whose strategy is to find and exploit new market and product opportunities.
Innovation may be more important then high profit.
Prospectors success depends on developing and maintaining the capacity to survey a wide range of environmental conditions, trends and events and introduce new products based on that research.
Structure must be flexible.
There will be numerous decentralised units.
Structure low in formalisation.

Question 10

Define analyser strategic type, and some characteristics

Answer 10

Organisations whose strategy is to move into new products or markets only after their viability has been proven.
Minimise risk by adopting innovations after they’ve been proven by others.
Seek flexibility and stability.
Seek structures that can accommodate both stable and dynamic areas of operation.

Question 11

Define Reactor strategic type, and some characteristics

Answer 11

A residual strategy that describes organisations that follow inconsistent and unstable flow patters.
In general reactors respond inappropriately and perform poorly.
Management has failed to shape the organisations structure properly to the strategy.

Question 12

What are porters competitive strategies

Answer 12

Cost leadership
Differentiation strategy
Focus strategy
Stuck in the middle

Question 13

What is Cost leadership strategy in relation to porter

Answer 13

Aims to achieve the lowest cost within an industry.

Question 14

What is Differentiation strategy in relation to porter

Answer 14

Aims to achieve unique position in an industry in ways that are widely valued by buyers.

Question 15

What is Focus strategy in relation to porter

Answer 15

Aims at cost advantage or differentiation management.

Question 16

What is “Stuck in the middle” in relation to porter

Answer 16

Organisations that are unable to gain a competitive edge through one of the various strategies.

Question 17

Commonly required skills and resources of porters Cost leadership strategy

Answer 17

• Sustained capital investment and access to capital
• Process engineering skills
• Intense supervision of labour
• Products designed for ease of manufacture
• Low cost distribution system

Question 18

Commonly required skills and resources of porters Differentiation strategy

Answer 18

• Strong marketing abilities
• Product engineering
• Creative flair
• Strong capabilities in basic research
• Corporate reputation for quality or technological leadership
• Long tradition in the industry or unique combination of skills drawn from other businesses
• Strong cooperation from channels

Question 19

Commonly required skills and resources of porters focus strategy

Answer 19

Combination of Differentaition and Cost leadership strategy policies directed at the particular strategic target

Question 20

Common organisational requirements of porters Differentiation strategy

Answer 20

Strong coordination among functions in R&D, product development and marketing
Subjective measures and incentives instead of quantitative measures
Amenities to attract highly skilled labour, scientists or creative people

Question 21

Common organisational requirements of porters Cost leadership strategy

Answer 21

Tight cost control
Frequent, detailed control reports
Structured organisation and responsibilities
Incentives based on meeting strict quantitative targets

Question 22

Common organisational requirements of porters focus strategy

Answer 22

Combination of requirements of differentiation and cost leadership

Question 23

Who wrote a thesis relevant to strategy and globalization

Answer 23

Ghosal and Bartlett

Question 24

What is Ghosal and Bartletts theory

Answer 24

Bartlett and Ghosal proposed a theory that linked global strategy and structure;
they claim that the strategy adopted when entering the overseas markets depends on the:
- interaction of cost pressures found in the market with the pressures of local responsiveness.

Question 25

What are the four strategies relevant to Bartlett and ghosals theory

Answer 25

International strategy
Multi domestic strategy
Global strategy
Transnational strategy

Question 26

What does International strategy require

Answer 26

• transfer valuable skills and product knowledge to overseas market.
• Some customisation may take place for local markets. –R&D is centralised in the home market,
• manufacturing, distribution and marketing is all carried out locally.
• Generally head office maintains tight control over key technologies.

Question 27

What does a multi domestic strategy aim for

Answer 27

A multi domestic strategy:

-Aims to achieve maximum local responsiveness with products customised to meet local conditions.

Question 28

What does a global strategy features

Answer 28

A global strategy:

• Adopted where a product can be sold in most markets with very little modification.
• Firms adopting this strategy work very hard at lowering costs by locating activities where they make the most sense.

Question 29

What does a transnational strategy want to achieve

Answer 29

Transnational strategy:
Attempts
- maximum local representatives
- worldwide economies of scale.

Question 30

Structural characteristics of International Strategy

Answer 30

• Centralisation of core competencies
• Knowledge and strategy developed at the centre and transferred to local units.
• Local operations aimed at adapting and leveraging parent company competencies.
• Moderate need for coordination
• Moderate need for culture control.
• divisionalisation based on product.

Question 31

Structural characteristics of Transnational Strategy

Answer 31

• Mixed centralised and decentralised form with integrates worldwide operations.
• Knowledge jointly shared and developed worldwide.
• Units are dispersed, interdependent and specialised.
• Very high need for coordination and extensive coordinating mechanisms.
• Predominant structural form is a world wide matrix.

Question 32

Structural characteristics of Multi domestic Strategy

Answer 32

• Decentralised and nationally self sufficient units which sense and exploit local opportunities.
• knowledge is developed and contained within each unit.
• Low need for coordination with almost no integration mechanisms.
• Low need for a common culture.
• Predominant structure form is divisionalisation based on geographic area.

Question 33

Structural characteristics of Global Strategy

Answer 33

• Centralisation of most operating decisions.
• Knowledge developed and retained at the centre.
• Global scale of operation leads to requirement for extensive coordination and integration mechanisms.
• Extensive effort to promote a common culture.
• Predominant structure forms based on worldwide product divisions.

Question 34

Miles and snow VS Bartlett and Ghosal

Answer 34

Miles and Snow, and Porter focus on a strategy aimed a single market.
Barlett and Ghosal develop strategies appropriate to internationalising firms.
The theories both agree, strategy causes structure

Question 35

What is the Industry- Structure relationship

Answer 35

The Industry- Structure relationship.
The role of industry as a determinant of structure.
Industry–> Strategy –> Structure

Question 36

What is networking

Answer 36

Group of organisations that pool their resources in various ways

Question 37

What are the different approaches as to how strategy is determined

Answer 37

• Planning mode which views strategy as a plan or explicit set of guidelines developed in advance. In other words, it views strategy as the outcome of a rational deliberation process.
• Evolutionary mode which acknowledges the unpredictable processes involved in strategy formation. It views strategy as a stream of significant decisions evolving over time. In other words, it views strategy as emerging from a string of minor incremental decisions.

Question 38

What is Chandlers argument

Answer 38

Alfred Chandler argued that organizations typically begin as single-product companies, which do only one thing (e.g. manufacture cars). Depending on the size of the company, the appropriate structure for this strategy would be a simple structure or a machine bureaucracy. Thus, the efficient structure for an organization with a single-product strategy is one that is high centralization, low formalization and low complexity.

Question 39

role of industry as a determinant of structure

Answer 39

Type A industries which are characterized by high capital requirements for entry and high product-innovation rates (e.g. telecommunication firms);
Type B industries which are characterized by low capital requirements for entry and high product-innovation rates (e.g. computer software manufacturers);
Type C industries which are characterized by high capital requirements for entry and low product-innovation rates (e.g. appliance manufacturers);
Type D industries which are characterized by low capital requirements for entry and low product-innovation rates (e.g. bicycle manufacturers).

Question 40

What is networks of companies in terms of strategy

Answer 40

Strategy is implemented not only by individual companies, but also by combinations of firms that are so closely connected and mutually dependent that the boundaries between them are difficult to identify, not so much in the legal sense, but in the operational sense

Question 41

What are different forms of networks and strategic alliances

Answer 41

• industrial networks – this is when there is a dominant company which clearly leads a group of subcontractors;
• clusters – in those cases there is no leading company or project manager to offer direction or control (e.g. in the personal computer industry) networks of this type are generally coordinated by market forces.
• strategic alliances – this is when two or more companies cooperate in a venture by each contributing their distinctive skills while maintaining their independence.