Strategic management

Question 1

Corporate strategy

Answer 1

A long-term plan of action for the whole organisation, designed to achieve a particular goal.

Question 2

Tactic

Answer 2

Short-term policy or decision aimed at resolving a particular problem or meeting a specific part of the overall strategy.

Question 3

Strategic management

Answer 3

The role of management when setting long–term goals and implementing cross-functional decisions that should enable a business to reach these goals.

Question 4

Competitive advantage

Answer 4

A superiority gained by a business when it can provide the same value product/service as competitors but at a lower price, or can charge higher prices by providing greater value through differentiation.

Question 5

Strategic analysis

Answer 5

The process of conducting research into the business environment within which an organisation operates, and into the organisation itself, to help form future strategies.

Question 6

SWOT analysis

Answer 6

A form of strategic analysis that identifies and analyses the main internal strengths and weaknesses and external opportunities and threats that will influence the future direction and success of a business.

Question 7

PEST analysis

Answer 7

The strategic analysis of a firm’s macro-environment, including political, economic, social and technological factors.

Question 8

Mission statement

Answer 8

A statement of the business’s core purpose and focus, phrased in a way to motivate employees and to stimulate interest by outside groups.

Question 9

Vision statement

Answer 9

A statement of what the organisation would like to achieve or accomplish in the long term.

Question 10

Boston Matrix

Answer 10

A method of analysing the product portfolio of a business in terms of market share and market growth.

Question 11

Core competence

Answer 11

An important business capability that gives a firm competitive advantage.

Question 12

Core product

Answer 12

Product based on a business’s core competences, but not directly for final consumer or end user.

Question 13

Ansoff’s matrix

Answer 13

A model used to show the degree of risk associated with the four growth strategies of market penetration, market development, product development and diversification.

Question 14

Market penetration

Answer 14

Achieving higher market shares in existing markets with existing products.

Question 15

Product development

Answer 15

The development and sale of new products or new developments of existing products in existing markets.

Question 16

Market development

Answer 16

The strategy of selling existing products in new markets.

Question 17

Diversification

Answer 17

The process of selling different, unrelated goods or services in new markets.

Question 18

Force-field analysis

Answer 18

Technique for identifying and analysing the positive factors that support a decision (‘driving forces’) and negative factors that constrain it (‘restraining forces’).

Question 19

Decision tree

Answer 19

A diagram that sets out the options connected with a decision and the outcomes and economic returns that may result.

Question 20

Expected value

Answer 20

The likely financial result of an outcome obtained by multiplying the probability of an event occurring by the forecast economic return if it does.

Question 21

Strategic implementation

Answer 21

The process of planning, allocating and controlling resources to support the chosen strategies.

Question 22

Business plan

Answer 22

A written document that describes a business, its objectives and its strategies, the market it is in and its financial forecasts.

Question 23

Corporate plan

Answer 23

This is a methodical plan containing details of the organisation’s central objectives and the strategies to be followed to achieve them.

Question 24

Corporate culture

Answer 24

The values, attitudes and beliefs of the people working in an organisation that control the way they interact with each other and with the external stakeholder groups.

Question 25

Power culture

Answer 25

Concentrating power among just a few people.

Question 26

Role culture

Answer 26

Each member of staff has a clearly defined job title and role.

Question 27

Task culture

Answer 27

Based on cooperation and teamwork.

Question 28

Person culture

Answer 28

When individuals are given the freedom to express themselves fully and make decisions for themselves.

Question 29

Entrepreneurial culture

Answer 29

This encourages management and workers o take risks, to come up with new ideas and test out new business ventures.

Question 30

Change management

Answer 30

Planning, implementing, controlling and reviewing the movement of an organisation from its current state to a new one.

Question 31

Business process re-engineering

Answer 31

Fundamentally rethinking and redesigning the processes of a business to achieve a dramatic improvement in performance.

Question 32

Project champion

Answer 32

A person assigned to support and drive a project forward, who explains the benefits of change and assists and supports the team putting change into practice.

Question 33

Project groups

Answer 33

These are created by an organisation to address a problem that requires input from different specialists.

Question 34

Contingency planning

Answer 34

Preparing and organisation’s resources for unlikely events.