Q1. A company’s strategy and its quest for competitive advantage are tightly connected because:
- crafting a strategy that yields a competitive advantage over rivals is a company’s most reliable means of achieving above-average profitability and financial performance.
- without a competitive advantage a company cannot have a profitable business model.
- how a company goes about trying to please customers and outcompete rivals is what enables senior managers to choose an appropriate strategic vision for the company.
- without a competitive advantage a company cannot become the industry leader.
- a competitive advantage is what enables a company to achieve its strategic objectives.
Q2. In crafting a company’s strategy:
- managers are well-advised to be risk-averse and develop a “conservative” strategy—”dare-to-be-different” strategies rarely are successful.
- managers have comparatively little freedom in choosing the “hows” of strategy.
- managers need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals.
- management’s biggest challenge is how closely to mimic the strategies of successful companies in the industry.
- managers are wise not to decide on concrete courses of action in order to preserve maximum strategic flexibility.
Q3. The objectives of a well-crafted strategy require management to strive to:
- develop lasting success that can support growth and secure the company’s future over the long term.
- realign the market to provoke change in rival companies.
- match rival businesses products and quality dimensions in the marketplace.
- build profits for short-term success.
- re-create their business models regularly.
Q4. A company’s strategy is a “work in progress” and evolves over time because of:
- the ongoing need to imitate the new strategic moves of the industry leaders.
- the ongoing need of company managers to react and respond to changing market and competitive conditions.
- the need to make regular adjustments in the company’s strategic vision.
- the importance of developing a fresh strategic plan every year (which also has the benefit of keeping employees from becoming bored with executing the same strategy year after year).
- the frequent need to modify key elements of the company’s business model.
Q5. A company’s business model:
- details the ethical and socially responsible nature of the company’s strategy.
- sets forth the actions and approaches that it will employ to achieve market leadership.
- is management’s storyline for how the strategy will result in achieving the targeted strategic objectives.
- zeros in on the customer value proposition and its related profit formula.
- explains how it intends to achieve high profit margins.
Q6. How can one tell a winning strategy from a strategy that is mediocre or a loser?Unlike a mediocre strategy, the winning strategy will pass three tests:
First one is the fit test (external, internal, and dynamic consistency).
Second test is the Performance test which includes the outstanding financial and market performance.
The third test is the Competitive Advantage, which should be durable competitive advantage.
Q8. Explain why a company’s strategy cannot be completely planned out in advance and why crafting a company’s strategy cannot be a one-time, once-and-for-all managerial exercise. Identify at least three factors that account for why company strategies evolve.
The company’s strategy typically evolves over time, starting to evolve forming a blend of proactive deliberate actions on the section of company managers to enhance the strategy as well as reactive emergent responses to unanticipated developments and new market conditions.
Q9. List six things to look for in identifying the components of an organization’s strategy.
2- Mission Statement
3- Goals and Objectives
5- Suppliers and customers
6- sustainable advantage
Q10. Should a company’s strategy be tightly connected to its quest for competitive advantage? Why or why not? What difference does it make whether a company has a sustainable competitive advantage or not?
Yes, a company’s strategy should be tightly connected to its quest for competitive advantage because if it has sustainable advantage, then that means it would persist and prosper despite the best efforts of competitors to surpass this advantage.
Q11. Which one of the following is NOT an accurate attribute of an organization’s strategic vision?
- Describing the company’s future product-market-customer-technology focus.
- Outlining how the company intends to implement and execute its business model.
- Providing a panoramic view of “where we are going”.
- Pointing an organization in a particular direction and charting a strategic path for it to follow.
- Helping mold an organization’s character and identity.
Q12. The key duties of a company’s board of directors in the strategy-making, strategy-executing process include:
- taking the lead in developing the company’s business model and strategic vision.
- overseeing the company’s financial accounting and financial reporting practices and evaluating the caliber of senior executives’ strategy-making/strategy-executing skills.
- coming up with compelling strategy proposals of their own to debate against those put forward by top management.
- taking the lead in formulating the company’s strategic plan but then delegating the task of implementing and executing the strategic plan to the company’s CEO and other senior executives.
- approving the company’s operating strategies, functional-area strategies, business strategy, and overall corporate strategy.
Q13. Adopting a set of “stretch” financial and “stretch” strategic objectives:
- helps convert the mission statement into meaningful company values.
- challenges company personnel to execute the strategy with greater enthusiasm, proficiency, and understanding.
- is a widely held method for creating a “scorecard” for moderating company performance.
- pushes the company to strive for lesser but adequate profitability levels, because the stretch objectives are considered unattainable.
- is an effective tool for pushing the company to perform at its full potential and deliver the best possible results.
Q14. Which one of the following is NOT a characteristic of an effectively worded strategic vision statement?
- Consensus-driven (commits the company to a “mainstream” directional path that almost all stakeholders will enthusiastically support).
- Focused (provides guidance to managers in making decisions and allocating resources).
- Graphic (paints a picture of the kind of company management is trying to create and the market position(s) the company is striving to stake out).
- Directional (is forward-looking, describes the strategic course that management has charted that will help the company prepare for the future).
- Easy to communicate (is explainable in 5-10 minutes, and can be reduced to a memorable slogan).
Q15. A “balanced scorecard” that includes both strategic and financial performance targets is a conceptually strong approach for judging a company’s overall performance because:
- it entails putting equal emphasis on good strategy execution and good business model execution.
- financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities, whereas strategic performance measures are leading indicators of a company’s future financial performance and business prospects.
- it forces managers to put equal emphasis on financial and strategic objectives.
- it assists managers in putting roughly equal emphasis on short-term and long-term performance targets.
- a balanced scorecard approach pushes managers to avoid setting objectives that reflect the results of past decisions and organizational activities.
Q16. An organization’s strategic plan consists of the actions which management plans to take in the near future. True or false? Explain and justify your answer.
True. The strategic plan involves actions that will be taken in the near future in order to align the company on its track for the long time goals and future status. Those near future actions will work to satisfy the company’s purpose as a guide the pursuit of the vision and mission. This would guide actions at the organization, and communicates to stakeholders aspirations for the company’s future.
Q17. Identify the key characteristics of a well-stated organizational objective.
The key characteristics of a well stated organizational objective is when that objective spells out how much of what kind of performance by when. Thus, it could include the financial objectives and strategic objectives, which will provide an accurate approach for measuring company performance.