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| Question | Answer |
| What is strategy? | A comprehensive plan that sets direction and guides the allocation of resources to achieve long term objectives. |
| What is strategic management? | The process of formulating and implementing strategies. -The essence of SM is looking ahead, understanding the environment and organisation, and effectively positioning the organisation for competitive advantage in changing times. |
| Strategic management goals? | Should be super profitability. This creates value for investors in the form of above- average returns. |
| What is competitive advantage? | It allows an organisation to deal with market and environmental forces better than its competitors. |
| When does competitive advantage arise? | When an organisation acquires or develops an attribute or combination of attributes that allow it to outperform its competitors. EG. Access to natural resources. |
| What is sustainable competitive advantage? | It exists through realizing cost and quality, knowledge and speed, creating stronghold and protecting financial resources. It is the hallmark of successful organisations. |
| What is the central strategy of sustainable competitive advantage? | Technological and design leadership. |
| What is the strategic management process? | The process of formulating and implementing strategies to advance an organisations mission and objectives and secure a sustained competitive advantage. |
| What are the two SM responsibilities? | Strategy implementation, the process of creating strategy and also strategy implementation, the process of allocating resources and putting strategies into action. |
| What are the 5 SM process tasks? | 1.Identify organisational mission and objectives. 2. Assess current performance in relation to mission and objectives. 3. Create strategic plans to accomplish purpose and objectives 4.Implement the strategic plans 5.Evaluate results. |
| What are the levels of strategy? | Corporate, business and functional. |
| What is corporate strategy? | Sets long term direction for the total enterprise |
| What does corporate strategy do? | - Describes size of scope of operations. -Sets direction and guides resource allocation for enterprise. -May identify different areas of business in which company intends to complete |
| What is the business strategy? | The strategy for a single business unit or product line. It identifies how a division or strategic business unit will compete in its product or service domain. |
| What is the term strategic business unit? | To describe a single business or a component that operates with a separate mission within the larger enterprise. |
| What are some business strategy decision examples? | Choices about produce/service mix, the location of facilities and new tech. |
| What is a Functional strategy? | It guides the use of organisation resources to implement business strategy. This level of strategy focus on activities within a specific functional area of operations. Eg. Marketing, HR, research and development. |
| What is concentration? | Growth within the same business area |
| What is diversification? | Growth by acquisition of, or investment in, new and different business areas. |
| What is related diversification? | Growth by acquiring new businesses or entering business areas that are related to what the organisation already does. |
| What is unrelated diversification? | Growth by acquiring businesses or entering business areas that are different from what the organisation already does. |
| What are other forms of diversification? | Vertical integration, where a business seeks added value through acquiring suppliers ( backward) or distributes (forward) |
| What is the retrenchment strategy? | Involves reducing the scale of current operations. - most extreme case is liquidation. |
| What term has the definition 'Changes the scale and/or mix of operations to gain efficiency and improve performance" | Restructuring |
| What is one way restructuring can be accomplished? | Downsizing - decreases the size of operations with the intention of becoming more streamlined. |
| What is restructuring by divestiture? | Involves selling off parts of the organisation to - refocus on core competencies - Cuts costs - Improve operating efficiency. |
| What are the two E-Business strategies? | B2B - involves the use of IT and the internet to vertically link organisations with members of their supply chain. B2C- Uses IT and internet to link organisations with their customers via the internet |
| What is Porters 5 forces analysis? | - Supplier - New entrants -Customers -substitute products -Industry competiton |
| What are the 4 porters generic strategies? | - Low cost ( Broad market segment and low price) -Focused low cost ( Narrow and low price source of competitive advantage) -Differentiation (Broad and uniqueness) -Focused differentiation (Narrow and uniqueness) |
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