Strategy Formulation

Question 1

define the term mission and the question it answers

Answer 1

basic purpose of existence of the company.

‘why do we exist?’

Question 2

state 3 characteristics of a mission

Answer 2

1. infinite language (verbs in infinite form)
2. involves little to no fantasy elements
3. better short than long

Question 3

define the term vision and the question it answers

Answer 3

a picture of the company in the future.

‘what do we see?’

Question 4

state 5 characteristics of a vision

Answer 4

1. creative and ambitious, yet achievable
2. finite language (selected timeframe)
3. can involve elements of fantasy
4. very clearly formulated
5. better short than long

Question 5

define the term strategic objectives and what question they anser

Answer 5

end results of planned activities.

‘what is to be accomplised? in what time?’

Question 6

what prerequisites should strategic objectives meet?

Answer 6

1. specific (clear, understandable)
2. measureble (quantified in € and time)
3. achievable (motivating, but attainable)
4. relative (hierarchy)
5. time-bound (defined due date)
   - not mutually exclusive (in conflict with each other)
   - written

Question 7

what are the two approaches to defining strategic objectives?

Answer 7

1. integral (top-down)
   - first, whole company objectives are defined, then smaller ones
   - should be used whenever there is a big change
2. incremental (bottom-up)
   - first, partical objectives are defined of functional and business fields, then the whole company
   - should be used when the issue is concerning a specific area a general manager wouldn’t know much about

Question 8

what is the next step after defining the objectives?

Answer 8

to check whether a strategic gap exists = gap between the current performance and the desired performance (defined by objectives). if it exists, a new strategy is needed.

Question 9

define the term strategy

Answer 9

a master plan of how the company will achieve its vision and strategic objectives

Question 10

define the term strategy formulation

Answer 10

development of long-range strategic plans for effective expoloitation of S, minimisation of W, and reaction to O and T