Lesson 3

Question 1

Strategic Management/Planning

Answer 1

Decisions and actions used to formulate and execute strategies that will provide competitively superior fit between the organization and its environment to achieve organizational goals

Question 2

Formulating Corporate-Level Strategy: Portfolio Strategy

Answer 2

Use to formulate strategies for SBUs
Strategic Business Units (SBUs) have a unique mission, products, and competitors
Companies manage the mix of SBUs for synergy and competitive advantage Organizations should not become too dependent on one business

Question 3

Formulating Corporate-Level Strategy: The BCG Matrix

Answer 3

Organizes business along two dimensions
* Business growth rate
* Market share
*Four categories for corporate portfolio * The combination of high/low market share and high/low business growth

Question 4

Formulating Corporate-Level Strategy: Diversification Strategy

Answer 4

Moving into new lines of business
* Expand into new valuable products and services *Unrelated diversification is expansion into new lines of business
* Can be a difficult strategy
* Many companies are giving up on unrelated diversification *Vertical integration expands into businesses that supply to the business or are distributors

Question 5

Formulating Business-Level Strategy

Answer 5

Strategy within the business units: How do we compete? Business-level strategies are developed using Porter’s Five Forces
But, web technology is impacting all industries in positive and negative ways

Question 6

Action plans used by major departments

Answer 6

Marketing
Production
Finance
Human Resources Research and Development