Chapter 1 - Strategic management (parts 8-15)

Question 1

What are Porter’s 3 generic strategies?

Answer 1

Cost leader
Niche/Focus - CAN BE COMBINED WITH COST LEADER AND DIFFERENTIATOR!!! LOOK AT P. 9
Differentiator

Question 2

What are the 4 parts of Ansoff’s matrix?

Answer 2

Market penetration
Market development
Product development
Diversification

Question 3

Describe vertical integration

Answer 3

Involves buying a supplier or customer
Supplier = backwards vertical integration
Customer = forwards vertical integration

Question 4

Describe horizontal integration

Answer 4

Involves buying a competitor or complementary business (e.g. 2 publishers merging)

Question 5

Strategic implementation - what are the 6 parts required?

Answer 5

Requires a ‘champion’ (senior director who believes in plan)
Champion must be involved from start to end
Communication with stakeholders
Milestones set
Agree resources, targets and responsibilities
Document all relevant issues

Question 6

Review and control - what are the 4 parts required?

Answer 6

Regular review of performance against plan
Continuous monitoring of environment to ensure plan still relevant
KPIs linked to CSFs
Action needed if plan not being met

Question 7

What does the adaptive approach recognise is difficult in developing a strategy? (3 things)

Answer 7

Environmental uncertainty
Complexity (hard to understand everything)
Dynamism (fast changing nature of environment)

Question 8

What is the concept of logical incrementalism?

Answer 8

Recognises that managers tend to make changes only in small steps, even if a radical strategy that requires more drastic action is implemented

Question 9

What is emergent strategy?

Answer 9

A different strategy that emerges from the initial planned strategy.

Example: Pfizer - blood pressure to viagra!

Question 10

What does Richard Daft say organisations must do to thrive?

Answer 10

Reinvent themselves every 20-30 years

e.g. Volkswagen, IBM

Question 11

What do Bartlett and Ghoshal say organisations must do to thrive? (6 things)

Answer 11

Encourage individual initiative
Policy of organisational learning
Aim to continuosly renew the organisation
Support of individuals more important than control
Encourage people to stretch themselves
Trust, Openness and Fairness encourage commitment

Question 12

Define strategic stretch

Answer 12

How an organisation can use its capabilities and core competencies to compete effectively