Important Questions and answers: Strategic Management - Strategy and Process

STRATEGY AND PROCESS

1. What is business strategy?

―Strategy is the determination of the basic long goals and objectives of an enterprise and the adoption of the course of action and the allocation of the resources necessary for carrying out these goals‖. It‘s a comprehensive master plan stating how the corporation will achieve its mission and objectives of maximizes the competitive advantage and minimizes the competitive disadvantage.

2. What is strategic management?

Strategic management is that set of managerial decisions and actions that determine the long-run performance of a corporation of includes environmental Scanning, strategy formulation strategy implementation and evaluation and control. The study of strategic management therefore emphasizes the monitoring and evaluating of external opportunities and threats in the light of corporation‘s strengths and weaknesses.

3. What is corporate strategy?

Corporate strategy describes a company‘s overall direction in terms of its general altitude towards growth and the management of its various businesses and product lines. Corporate strategy is composed of directional strategy, portfolio analysis and parenting strategy, corporate strategies typically fit within the three main categories of stability, growth and retrenchment.

4. Define Ethics?

Ethics specify what good, true, is fair, just, right and proper in business. Businesses his relate to the behaviour of a business man in a business situation. They are concerned primarily with the impacts of decisions on people within and without the organization. Business ethical behaviour is conduct that is fair and just over and above the various rules and regulations.

5. What do you mean by strategic myopia?

While identifying the external strategic factors, the managers sometimes miss or ignore crucial new developments. Personal values and functional experiences of a corporation‘s manager as well as the success of current strategies bias both their perception of what they important to monitor in the external environment and the interpretations of what they perceive. This willingness to reject unfamiliar as well as negative information is called strategic myopia.

6. What is core- competency?

Core-competencies are the things that a corporation can do exceedingly well. It is the combination of an organization‘s resources and capabilities if the core competency of an organization is superior to that of its competitors it is called distinctive competency.

7. What is Distinctive competency?

Distinctive competencies are firm‘s specific strengths that allow a company to differentiate its products and achieve substantially lower costs than its rivals and thus gain competitive advantage competencies arise from two complementary sources resources and capabilities.

8. Define joint venture?

Joint ventures are partnerships in which two or more firms carryout a specific project or corporate in a selected area of business. Joint ventures can be temporary or long term. Ownership of the firm remains unchanged. Every joint venture has a scheduled life-cycle, which will end sooner or later every joint venture has to be dissolved when it has outlived its life-cycle. Changes in the environment forces joint ventures to be redesigned regularly.

9. What is conglomerate diversification?

When firms create new businesses that are unrelated to its original business, it is called conglomerates diversification. The benefits of conglomerate diversification are reductions of risks, economics of large scale operations, financial stability, increase in profits and attain managerial competence.

10. What are barriers to Entry?

An entry barrier is un obstruction that make it difficult for a company to enter an industry Established companies already operating in an industry often attempt to discourage the potential competitors by creation. High Entry barriers, such as rand Loyalty, absolute cost advantages, economics of scale customer switching cost, product differentiation etc.

11. Distinguish between hostile takeover and friendly takeover?

Takeover can be defined the ownership or control over the other firm. Of one firm acquires the ownership against the wishes of hi others management it is called hostile takeover. Of the acquisition is through the mutual consent of both the parties it is called friendly takeover.

12. What is Horizontal Expansion?

It‘s a growth strategy. Of a firm fries to expand its business by creating other firms in their same line of business it is called horizontal expansion. The aim of horizontal expansion is to increase market Shane. To reduce cost of production through large scale economic, to take advantage of synergy and to promote products and services more efficiently to a larger audience.

13. Define strategic Group?

Strategic group is a set of business units or firms that pursue similar strategies with similar resources. Categorizing the firms in an industry into a set of strategic groups is very useful for the better understanding of the competitive environment. Because a corporation‘s structure and culture reflect the kinds of strategies it follows.

Companies or Business units belonging to a particular strategic group within the same industry tend to be strong rivals and tend be more similar to each other than to competitors in other strategic group within the same industry.

14. Define corporate governance

Corporate governance refers to the relationship between the board of Directors, top management and the investors or shareholders in defer mining the direction and performance of the corporation.

15. What is backward integration?

When a company or firm acquire or create another firm which provides raw material component parts or other input for the original firm, it is called backward integration. 16. Define strategic outsourcing

Strategic outsourcing refers to the separation of some the company‘s value creation activities within the business and as letting them be performed by a specialist in that activity strategic outsourcing will lower the cost-structure of the company and increase its profitability. Moreover strategic outsourcing of non-core activities helps the company to focus management attention on those activities that one most important for its long term competitive position.

17. Distinguish between programs and procedures.

A program is a statement of the activities or steps needed to accomplish single use plan of makes the strategy action-oriented of my involve restructuring the corporation changing the company‘s internal structure or beginning a new research effort.

Procedures are a system of sequential steps or techniques set describe in detail how a particular job or task is to be done. They typically detail the various activities that must be carried out for completion of the corporations programs.

18. What is Entrepreneurial mode?

It is a type of strategic decision making. In this mode, the strategy is developed by one powerful individual. The focus is on opportunities and problems are secondary, strategy is guided by the founders own vision or direction and is exemplified by large, bold decisions. The dominant goal is growth of the corporation..

19. What is Adaptive mode?

This is a decision making mode sometimes referred to as ―muddling through‖. This is characters by reactive solutions to exiting problems rather than a proactive search for new opportunities strategy is fragmented and is developed to move the corporation forward in incremental steps.

20. What is planning mode?

This mode of strategic decision making the systematic gathering of appropriate information for situation malice, the generation of feasible alternative strategies. And the rational selection of the most appropriate strategy. This mode includes both the pro-active search for new opportunities and the reactive solution of exiting problems.