Strategy

Question 1

What is strategy?

Answer 1

Determining the direction and scope over the long term.

Strategy dictates the resources an organisation requires and how resources should be configured to meet the needs of markets and stakeholders.

Question 2

What are the 3 levels of strategy?

Answer 2

Corporate - defines the organisation (identifies markets to focus on)

Business - how we need to compete in the market (quality, price, positions etc)

Operational - is concerned with how different business functions support business strategy and corporate strategy.

Question 3

What are the 3 levels of strategic management?

Answer 3

1. Strategic Analysis (Position) - where are we. Analysing at opportunities, key influences within the environment
2. Strategic Choice (Course of Action) - Understanding how strategy options are generated, how the options are evaluated.
3. Put Strategy into action (Managing the change) -

by the structure of the organisation, planning of resources and by the management of the change

Question 4

What is Pestel?

Answer 4

… a model which forces the management of a company to look at all aspects of the environment surrounding them.

To help understand their position within it, and what opportunities/threats may occur.

Question 5

What does Pestel stand for?

Answer 5

Political - Changes in Policy (affects our industry), Reduced Bureaucracy.

Economic - Business Cycles, Interest Rates, Inflation.

Social - Tastes, Fashion, Demographics

Technological - Impact in production industry, research spending on new discoveries.

Ecological - Pollution impacts world (have a duty to manage the environmental impact).

Legal - Operate in system of general and specific rules. constraint the way we operate.

Question 6

What is Strategic Drift?

Answer 6

is the departure from the strategic plan over time by a range of small actions moving away from the original desired outcome.

This particularly affects organisations which have experienced a long period of relative continuity during which strategy has remained relatively unchanged.

Question 7

Why would Strategic Drift occur?

Answer 7

• organisation planned to take steps to change ahead of market and develop competitive advantage.
  - however, change in the market speeds up and the firm is left behind.
• managers look to expand in to new markets, but using the same strategy. If not successful, strategy development loses direction, further damaging performance.

Question 8

What are the 4 elements of Porters Diamond?

Answer 8

• Firm Strategy, Structure & Rivalry
• Factor Conditions (transport, climate)
• Demand Conditions (Strong, sophisticated local demand)
• Related &I Supported Industries (supporting specialists)

Question 9

Porters 5 forces - as a means of examining the competition @ SBU level.

What are these elements?

Answer 9

• Potential Entrants (Threat of Entry)
• Suppliers (Bargaining Power)
• Buyers (Bargaining Power)
• Substitutes (Threat of Substitutes)
• Competitive Rivalry

Question 10

Johnson & Scholes SAF Model, what is this?

Answer 10

• Suitable (does it fit)
• Acceptable (to various stakeholders)
• Feasible (resources available)