Introduction to Business Strategy

Question 1

What are the levels of strategy?

Answer 1

Corporate - board level, long term missions, products, decisions, relations
Business - form strategic business units
Functional/Operational - day-to-day management

Question 2

What are the characteristics of strategic decisions?

Answer 2

Scope of activities
Match activities to capabilities and environment
Revolve around allocation of resources
Set off chain of lesser decisions
Based on values and expectations of senior management
Long term direction
Lead to change in business

Question 3

What are the steps to the rational approach to strategic planning?

Answer 3

External/Internal analysis
Corporate appraisal
Gap
Mission, goals and objectives
Strategic choice
Strategy implementation

Question 4

What are the 3 types of strategies?

Answer 4

Competitive
Product-market
Institutional

Question 5

What are static and dynamic businesses?

Answer 5

Static - slow change, single product/market, simple technology, safe
Dynamic - Fast change, diverse product/market, difficult, dangerous

Question 6

What is the overall/general environment analysis (PESTEL)?

Answer 6

Political policy
Economic factors - interest/exchange rates
Social factors
Technological factors
Ecological - sustainability
Legal

Question 7

What is Porter’s 5 forces analysis?

Answer 7

Threat of new entrants
Bargaining power of suppliers/buyers
Threat of substitutes
Rivalry among existing competitors

Question 8

What are the 4 types of competitor?

Answer 8

Brand - similar products
Industry - similar product, different
Generic - same disposable income
Form - different products for same need

Question 9

What are the 4 competitor reactions?

Answer 9

Laid back - no response
Tiger - aggressive response
Selective - reacts to some threats
Stochastic - unpredictable

Question 10

What makes up internal analysis?

Answer 10

Position audit
Porter’s value chain
Analysis of supply chain
Product life cycle
BCG matrix

Question 11

What are the 9 Ms of a position audit?

Answer 11

Machinery
Make-up
Management
Management information
Markets
Materials
Men and women
Methods
Money

Question 12

What makes up Porter’s value chain?

Answer 12

Support activities - firm infrastructure, human resources, tech development, procurement
Primary activities - inbound logistics, operations, outbound logistics, marketing and sales, services
Minimise cost drivers to increase margin

Question 13

What is the shape and stages of the product life cycle?

Answer 13

Product development - dip in sales
Introduction - rising
Growth - rises
Maturity - peaks
Decline - declines

Question 14

What are the segments of the BCG matrix?

Answer 14

High market share, high market growth - STAR - market leader
High ms, low mg - CASH COW - makes money
Low ms, high mg - ??? - needs money put in or withdraw product
Low ms, low mg - DOG - put down

Question 15

What approaches are used in SWOT analysis?

Answer 15

Positioning-based approach
Resource-based approach

Question 16

What is Mendelow’s power matrix of stakeholder interest?

Answer 16

Low interest, low power - minimal effort
High interest, low power - keep informed
Low interest, high power - keep satisfied
High interest, high power - key player

Question 17

What are Porter’s generic competitive strategies?

Answer 17

Cost leadership - lowest cost
Differentiation - unique product
Focus or niche - restricted activities for segment of market

Question 18

What is Ansoff’s matrix of market/product strategies?

Answer 18

Existing market & product - protect and build
Existing product, new market - market development
New product, existing market - product development
New product & market - diversification