Formulating Strategy

Question 1

Decisions of strategy long term effects

Answer 1

• quality
• high technology
• raw materials
• good labour relations

Question 2

decisions of strategy short term effects

Answer 2

• product line
• manufacturing process
• merchandising
• styling

Question 3

formulation

Answer 3

• logical approach to identify the opportunities and threats in the environment - attach some estimate of risk to the alternatives
• apply the companys strengths and weaknesses and assess which is best course of action
• when the opportunity and corporate capability are combined at all acceptable level of risk - economic strategy

Question 4

implementation

Answer 4

• good plan can fail due to poor implementation

- poor plan can succeed due to good implementation

Question 5

relating opportiunities to resources

Answer 5

technology, ecology, economics, industry society and politics

1. what are the essential economic, technical and physical characteristics of the industry
2. what trends suggesting further change in economic and technical characteristics are apparent
3. what is the nature of the competition
4. what are the requirements for success in competition

Question 6

identifying coprorate competance and resource

Answer 6

capability = demonstrated ability + potential ability

Question 7

sources of capability

Answer 7

power of company comes from its experience in marketing its product/ service through the following:

• strengths and weaknesses of individuals
  2. individual activity in common tasks
  3. quality of coordination in individual and group tasks

experience in developing one project may help open new areas

Question 8

identifying strengths

Answer 8

• look for skills that underlie success

- HUNDRUM: effective application of tried and tested ideas

Question 9

Matching opportunity and competance

Answer 9

degree of imbalance equates to degree of risk

• distinctive competence an other resource areas ( people and money) points the way to strategy development
• at the advanced stages of strategy development, money frequently seems less of a problem than people

Question 10

how to analyse strategy

Answer 10

• strategy concerned with the selection of goals and objectives
• easier to set goals than to evaluate them

Question 11

principles of strategy evaluation

Answer 11

strategies must be tested. 4 forms:

1. consistency: strategy must not present inconsistent goals and policies
2. consonance strategy must present and adaptive response to external environment and to critical changes occurring
3. advantage: strategy must provide for creation/ maintenance of a competitive advantage
4. feasibility: strategy must neither over tax the available resources or create unsolvable sub problems