Strategic Management — Part 2 MCQs with Explanations

Communities Banks Suppliers would be classified as a stakeholder. A community bank is a depository institution that is typically locally owned and operated. Community banks tend to focus on the needs of the businesses and families where the bank holds branches and offices. Lending decisions are made by people who understand the local needs of families, businesses and farmers. Employees often reside within the communities they serve.

Direct expansion is following .growth strategy in which growth is achieved.

According to the BCG matrixSBU comprising products in an attractive industry but representing little market share would be referred to as a question mark.

A company offers unique products that are widely valued by customers, it is likely to follow a differentiation strategy. Differentiation strategy, as the name suggests, is the strategy that aims to distinguish a product or service, from other similar products, offered by the competitors in the market.

The following are considered grand strategies, except for Strategic business units. Strategic Business Unit (SBU) implies an independently managed division of a large company, having its own vision, mission and objectives, whose planning is done separately from other businesses of the company.

Analysing the ext environment and the organisations resources are part of the Strategic planning process. Strategic planning is a process undertaken by an organization to develop a plan for achievement of its overall long-term organizational goals.

Threats of technological advances is not one of Porters five competitive forces. Porter's five forces include three forces from 'horizontal' competition--the threat of substitute products or services, the threat of established rivals, and the threat of new entrants--and two others from 'vertical' competition--the bargaining power of suppliers and the bargaining power of customers.

Strategic business units develop their own unique way of competing. A strategic business unit, popularly known as SBU, is a fully-functional unit of a business that has its own vision and direction. Typically, a strategic business unit operates as a separate unit, but it is also an important part of the company. It reports to the headquarters about its operational status.

Marketing current products with possible modifications and range increases is also known as Market development. Market development is a strategic step taken by a company to develop the existing market rather than looking for a new market.

Horizontal integration occurs when When a firm acquires or merges with a major competitor. Horizontal integration is the process of a company increasing production of goods or services at the same part of the supply chain. A company may do this via internal expansion, acquisition or merger. The process can lead to monopoly if a company captures the vast majority of the market for that product or service.

Divestment is an asset-reduction strategy. Divestment is the process of selling subsidiary assets, investments or divisions in order to maximize the value of the parent company. Divestment typically takes a form of spin-off, equity carve-out or direct sale of assets, and the most common reason for deploying this strategy is to eliminate non-core businesses.

Sustained survival implies that a turnaround is achieved but there is little further growth. Sustain means to support something or keep it going. Survival skills are techniques that a person may use in order to sustain life in any type of natural environment or built environment.

In Horizontal integration scenarios a joint venture is likely to be more attractive than acquisition. Horizontal integration is the acquisition of a business operating at the same level of the value chain in a similar or different industry.

McDonalds is deciding whether to expand into manufacturing kitchen equipment in China. At Corporate level this decision is likely to be made.

Corporate governance is concerned with Executive remuneration, disclosure of information, auditing and accounting procedures, and organizations' management structures. Corporate Governance refers to the way in which companies are governed and to what purpose. It identifies who has power and accountability, and who makes decisions. It is, in essence, a toolkit that enables management and the board to deal more effectively with the challenges of running a company.

The slowest way to grow a business is likely to be through Internal development. Internal growth strategy refers to the growth within the organisation by using internal resources. Internal growth strategy focus on developing new products, increasing efficiency, hiring the right people, better marketing etc.

The value chain is subdivided into two main headings. These are primary activities and support activities.

A joint venture can be defined as Two firms come together to form a third, legally separate firm. A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Goals are short-term milestones or benchmarks that organizations must achieve in order for longer term objectives are to be reached. Strategic goals is a term denoting the set of highest goals of the organization or an individual.

Competitive advantage is not a recognized element of corporate strategy. Competitive advantage refers a company's ability to outperform rivals due to unique, high demand, or superior quality products or services.

Strategic Intent refers to the purposes an organization strives to achieve. Strategic Intent can be understood as the philosophical base of the strategic management process. It implies the purpose, which an organization endeavor of achieving. It is a statement, that provides a perspective of the means, which will lead the organization, reach the vision in the long run.

Retrenchment Strategy may require a firm to redefine its business and may involve divestment of a major product line or an SBU, abandon some markets or reduce its functions. The Retrenchment Strategy is adopted when an organization aims at reducing its one or more business operations with the view to cut expenses and reach to a more stable financial position.

Formal strategic planning should develop clear and rigid plans for the organization to implement is a false statement. Formal strategic planning is the most sophisticated form of plan- ning. It implies that a firm's strategic planning process involves explicit systematic. procedures used to gain the involvement and commitment of the stakeholders. most affected by the plan.

Expansion strategy is often considered as entrepreneurial strategy where firm develops and introduce new products and markets or penetrate markets to build share. An expansion strategy is synonymous with a growth strategy. A firm seeks to achieve faster growth, compete, achieve higher profits, grow a brand, capitalize on economies of scale, have greater impact, or occupy a larger market share.

Managers understanding the organizations strategy, its effectiveness statements best describes the concept of strategic awareness. Strategic awareness is a space where new ideas and innovation are constantly generated from a heightened non-contextual awareness. With this strategic awareness, leaders operate beyond the goal of competing to actively seize new and different possibilities.

Creating superior value to customers, Exploitation of key success factors and Creating and maintaining strategic fit are associated with successful strategies.

There is no recommendation It can be as long as the management wants is the recommended length of an effective mission statement. To be effective, mission statements need to clarify the intentions of the business while being inspirational and meaningful to customers and employees. Successful mission statements may take time to create, but when they are developed correctly, they provide a company with clear direction and purpose.

Corporate and competitive type of strategies are of particular importance to global companies. Competitive or business strategy defines for a given business the basis on which it will compete. Corporate strategy is typically decided in the context of defining the company's mission and vision, that is, saying what the company does, why it exists, and what it is intended to become.

Two reasons for mergers and acquisitions are to provide improved capacity utilization and to gain new technology. Engaging in the promotional activities, introducing new ways by which product value can be increased, which in turn increases the production rate which leads to maximum capacity utilization.

The pie slices within the circles of a BCG matrix reveal the percent of corporate profits contributed by each division. BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the business brand portfolio and its potential. It classifies business portfolio into four categories based on industry attractiveness (growth rate of that industry) and competitive position (relative market share).

The markets to service of the following is of concern for not-for-profit organizations. Market, a means by which the exchange of goods and services takes place as a result of buyers and sellers being in contact with one another, either directly or through mediating agents or institutions.

Emergent strategy implies an ability to react to events. An emergent strategy is a pattern of action that develops over time in an organization in the absence of a specific mission and goals, or despite a mission and goals. Emergent strategy is sometimes called realized strategy.

The impact of strategies on the general direction and basic character of a company is long range.

Value is the benefits of a product/service as perceived by the customer. A value proposition is a comparison of the benefits offered by a company's products and services to the price it asks customers to pay.

The acronym SWOT stands for Strengths, Weakness, Opportunities and Threats. It is a way of summarizing the current state of a company and helping to devise a plan for the future, one that employs the existing strengths, redresses existing weaknesses, exploits opportunities and defends against threats.

A process consisting of the determination of direction, strategic actions to achieve objectives, the implementation of desired strategy, and monitoring of that strategy statements best describes strategic management. Strategic management is the ongoing planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals and objectives. Changes in the business environment require organizations to constantly assess their strategies for success.

Competition is a key external factors that should be taken into account by a corporate strategy. Strategic competition is a commitment within an organization to make a very large change in competitive relationships.

Product-market is one of the following would not be considered a functional strategy. A product market refers to a place where goods and services are bought and sold.

The two internal elements of SWOT analysis are strength and weaknesses.

Porter's generic strategies are cost leadership, differentiation, cost focus, focus differentiation. Porter's generic strategies describe how a company pursues competitive advantage across its chosen market scope. There are three/four generic strategies, either lower cost, differentiated, or focus.