STRATEGY

Question 1

what is strategic planning? what are it’s characteristics?

Answer 1

SP aka long term planning/ corporate planning.
-it considers the longer term (horizon of 5 years or beyond)
-considers the whole organisation

-gives direction
-considers all stakeholders
-looks at how to gain a sustainable competitive advantage
-relates to organisation, resources and environment

Question 2

define strategy

Answer 2

pattern of activities that seek to achieve the objectives of organisation and adapt it’s scope, resources and operations to environmental changes in long term.

Question 3

advantages of strategic planning?

Answer 3

-forces organizations to look ahead
-improved fit with the environment
-better use of resources
-gives direction /vision
-helps monitor progress
-ensures goal congruence

Question 4

disadvantages of strategic planning?

Answer 4

-time consuming
-difficult in rapidly changing markets
-can become a straightjacket
-some unplanned for opportunities may be missed
-less relevant in a crisis
-can become bureaucratic (over concerned with procedure at the expense of efficiency/ common sense)

Question 5

when is strategic planning important?

Answer 5

-long lead times
-business needs to be turned around
-high capital expenditure
-many stakeholders are affected

Question 6

what are the three levels of strategic planning?

Answer 6

1) corporate- looks at organisation as a whole
2) business- looks at individual business unit (eg. specific region/ product line)
3) functional /operational/ tactical: looks at a single function (marketing, HR etc)

Question 7

what is the johnson, scole, whittingotn model of strategic planning?

Answer 7

The Johnson, Scholes, and Whittington model provides a comprehensive framework for organizations to
-assess their strategic position
-make informed strategic choices
-and effectively implement and adapt their strategies as needed.

it is widely used to guide strategic planning and decision-making.

Question 8

three elements of JSW model of strategic planning are?

Answer 8

1) strategic position/ analysis
2) strategic choices
3) strategy into action (implementation)

Question 9

what is strategic analysis/ position and how is it done?

Answer 9

The Strategic Position: This element focuses on analyzing an organization’s external environment and internal resources and capabilities.

it is done by analysing:

-PESTEL: environmental variables
-resource availability, strengths and weaknesses
-expectations of stakeholders
-culture, as it affects environment and resources
-industry- assessing competition using porter’s five forces model

Question 10

what is pestel and how is it carried out?

Answer 10

PESTEL is the model for analysing environmental variables that affect the organisation

-Political
-Economic
-Social
-Technological
-Environmental
-Legal.

how it’s done:
-look at the historical/present environmental effects
-expected changes
-environmental variables can give rise to opportunities or threats, so important to analyse.

Question 11

two problems of pestel analysis?

Answer 11

-to distill out the main environmental impact, is difficult
-list of factors is too great, not possible to identify/analyse each one.

Question 12

how are resources of the organisation analysed?

Answer 12

-consider stregnths and weaknesses
-competitive advantage/disadvantage
-consider resource areas
-expectations of stakeholders
-culture

Question 13

how are expectations of stakeholders analysed?

Answer 13

in profit making business, there is a choice of:
-high risk/high return strategy and low risk low return. so consider which one SH want

in non profit:
eg. animal rescue, consider what donors want, how much should go into TNR, how much in rescue? etc

Question 14

what are the three elements in strategic choice?

Answer 14

-generate strategic options (growth, acquisition ,diversification, concentration)
-evaluate the options
-select the option to pursue

Question 15

what are the two ways of pursuing a strategy?

Answer 15

-internal development: organic growth
-external development: merger/ acquisition, license, franchise ,Joint venture

Question 16

what is a strategic drift?

Answer 16

it is a phenomena where a business faces decline in it’s financial performance, might even lead to business closure.

this phenomena occurs when organisation fails to keep up with changes in external environment

Response :

Johnson, Scholes and Whittington suggest that the challenge for managers is to stand apart from their own experience and organisational culture so that they are able to recognise the emerging strategic issues which they face. They also suggest that a second challenge relates to the management of strategic change. New strategies might require actions outside the scope of the existing culture. Thus people within the organisation are required to substantially change their core assumptions and their ways of doing things. The senior management at TMZ were warned about the possible effect of digital downloading, but they were unable to change their basic assumptions about how the music industry worked.

Question 17

4 stages of strategic drift are

Answer 17

phase 1- incremental change- firm takes small steps to stay ahead and develop competitive advantage

phase 2- strategic drift- market change speeds up, firm is left behind

phase 3- Flux- there is a need to take a big action, if not successfully done, busines might go into state of flux, no direction, damaged performance

Phase 4- transformational change or demise- there is a crisis

Question 18

causes of strategic drift

Answer 18

-new tech
-power structure within organisation
-cultural influences
-organisational policies

all these create resistance to change or lack of focus to changes occurring in external environment. or lack of belief of changes.
organisation becomes too slow and drifts away from what market wants.

Question 19

how can strategic drift be avoided?

Answer 19

-regularly assess environment (both in current and expected future changes)
-create a flexible system for reacting to changes
-break down barrier to change, by creating a culture that copes with change.
-clear idea of mission and objectives, understand where u want to be in future
-strong leaders willing to make changes to direction and strategy

Question 20

What to do when asked to evaluate a proposed strategy?
-acquiring company
-opening restaurant in another city
-adding new product line

Answer 20

Use SFA framework
SUITABILITY: concerned with whether a strategy addresses the issues identified when considering the strategic position of the company.
SHOULD I DO IT, does it make sense
Para 1: home country environment
2 : target country environment, opportunities
3: target company, culture clash

FEASIBILITY : do i have the resources to do it, can i afford, like money,ppl,technology
Para 1: Human Resource/ experience
2- financial, funds
3- technology and brand

ACCEPTABILITY : return and risk levels, stakeholders acceptance , culture , financial analysis

Question 21

Competencies vs key success factors

Answer 21

distinctive competences are those things which an organisation does particularly well

Key success factors are those requirements which it is essential to have if one is to survive and prosper in a chosen industry/environment.