3MARKS

(1)What are the different levels of strategy?

The three different level of strategy are

 Corporate level:
Corporate level strategy is concerned with the overall
purpose and scope of an organization and how value will be added to the
different parts of the organization.
 Business level:
It encompasses the business’s overall competitive theme, the
way it positions itself in the marketplace to gain a competitive advantage, and
the different positioning strategies that can be used in different industry
settings. For example cost leadership, differentiation, focusing on a particular
niche or segment of the industry, or some combination of these.
 Functional level:
This level directed at improving the effectiveness of
operations within a company, such as manufacturing, marketing, materials
management, product development, and customer service.

(2)What is strategy? How is it different from a plan?

A strategy is management’s game plan for growing the business, staking
out a market position, attracting and pleasing customers, competing successfully,
conducting operations, and achieving targeted objectives.

A plan is typically any procedure used to achieve an objective. It is a set of intended

actions, through which one expects to achieve a goal.

Plans can be formal or informal:

 Structured and formal plans, used by multiple people, are more likely to occur in
projects, diplomacy, careers, economic development, military campaigns, combat, or
in the conduct of other business.
 Informal or ad-hoc plans are created by individuals in all of their pursuits.
 In other words a company strategy consists of the competitive moves and
business approaches that managers employ to attract and please customers, compete
successfully, grow the business, conduct operations, and achieve targeted objectives.

A plan is basically "what to do" while a strategy is "how to do it". In business

Strategy is the combination of thought and action for the purpose of succeeding in an
operation. This consists of a conscious, deliberate and informed mixture to act on a
operation. Strategy is the projection of intelligence into the sphere of action.
Where as plan regroups the various steps used for the efficient execution of the
strategy at various stages.

(3)State the characteristics of strategic management.

Characteristics of strategic management-

 Likely to be concerned with the long-term direction of an organization

 Normally concerned with trying to achieve sustainable competitive advantage
 Concerned with the scope of an organization’s activities
Matching of the resources and activities of an organization to the environment in
which it operates.

(4)Write any three definitions of strategy.

Strategy definition-
 A strategy is a plan of action designed to achieve a particular goal.
 A company’s strategy is managements action game plan for growing the business,
staking out a market position, attracting and pleasing customers and achieving the set
objectives.
 Strategy is the direction and scope of an organization over the long-term, which
achieves advantage for the organization through its configuration of resources within
a changing environment and to fulfill stakeholder expectations.

(5)Identify the fundamental purpose of a business firm.

The fundamental purposes of a business firm are.

 To earn profit.
 Create value.
 Customer satisfaction.
 Long term sustainability.
 Stakeholders welfare.
 The fundamental purpose of any business firm is to make profits or get
adequate returns in order to be in business. Companies managers have 3
central questions - where are we now? Where do we want to go? And how will
we get there?
  For this reason, management sets a few fundamental principles that it would
follow in order to carry out its objectives & goals most successfully. Long and
short term plans, which are aided with set of action plans, are called as
strategic and tactical & operational respectively.
 The fundamental purpose differs from firm to firm. They are generally in tune
with the strategy of the firm. Generally manufacturing firms aim at providing
quality and services oriented firm aim at achieving highest possible levels of
customer satisfaction.

10 MARKS
 (1) Discuss the components of the strategic management model.
Strategic management model refers to the pattern or mode of strategic
management. According to the strategic management model, a number of steps are
taken to achieve the objectives of a company. Different strategic management models
are chosen by various companies according to their conveniences.

Strategic management model is also known as strategic planning model. A

strategic planning model is selected for the purpose of formulating and implementing the
strategic management plan of a particular organization. Nevertheless, it has been proved that
no strategic planning model is perfect. Every company designs its own strategic planning
model frequently by choosing a model and transforming it as the company advances into
formulating its strategic management plan procedures.

The components of strategic management model are

 The strategic position.
 The strategic choices.
 The strategy into action.

The strategic position:

The strategic position is concerned with impact on strategy
of the external environment, internal resources and competences, and the
expectations and influence of stakeholders.

The key influencing factors of strategic position are

 The environment.
 The expectations and purposes.
 The resources and competences.

The strategic choices:

Strategic choices involve understanding the underlying bases
for future strategy at both the corporate and business unit level and the options
 for developing strategy in terms of both the directions in which strategy might
move and the methods of development.

The key influencing factors of strategic choices are

 Corporate level strategies.
 Business level strategies.
 Development directions and methods.

The strategy into action:

Strategic into action is concerned with ensuring that
strategies are working in practices. A strategy is not a just a good idea, a statement or
a plan. It is only meaningful when it is actually being carried out. How this occurs
typically thoughts of in terms of
 Organizing.
 Enabling.
 A model of the elements of strategic management

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7 MARKS

(1) what are the major elements of the hierarchy of strategic intent and how do they
support one another?
The hierarchy of strategic intent includes five types of elements ranging
from
 Vision.
 Mission.
 Goals.
 Objectives.
 Plans.

Vision
A vision or strategic intent is the desired future state of the organization.

Mission
A mission is a general expression of the overall purpose of the organization,
which ideally, is in line with the values and expectations of major stockholders and
concerned with the scope and boundaries of the organization.

Goals
A Goal usually means a general aim in line with the mission. The strategic
goals identified by most organization share several features:
 They address both financial and nonfinancial issues.
 They facilitate reasoned trade-offs.
 They can be reached with a stretch.
 They cuts across functional areas.
Objectives
Objective is more likely to be quantified, or at least to be a more
precise aim in line with the goal. The most helpful objectives have the following
characteristic.
 They can be measured.
  They incorporate a time dimension.
 They reduce the conflict.
Plans
The lowest level of the hierarchy of strategic intent deals with the
plans that a manager develops to help accomplish higher level intentions.
This plan scribe specific tactics, assign responsibilities, identify how
resources will be allocated schedule activities and efforts, and specify
various targets.

(2) Explain the various dimension of strategic decision making.

The various dimension of strategic decision making are

 Complex in nature
 Made in situations of uncertainty
 Will demand an integrated approach to managing the organization
 May change relationships and networks outside the organization
 Will very often involve change within the organization

(3) Bring out the relationship between a company’s strategy and its business model.

Relationship between company strategy and business model.

Company Strategy deals with a company’s competitive initiatives and business approaches,
towards its consumers and market.

Business Model concerns whether revenues and costs flowing from the company strategy
demonstrate the business can be amply profitable and viable.

A company’s business model sets forth the economic logic of how an

enterprise’s strategy can deliver value to customers at a price and cost that yields acceptable
profitability .A company’s business model thus is management’s storyline for how and why
the company’s product offerings and competitive approaches will generate a revenue stream
and have an associated cost structure that produces attractive earnings and return on
investment.
Companies that have been in business for a while and are making
acceptable profits have a “proven” business –model there is clear evidence that their strategy
is capable of profitability and that they have a viable business models.
 (4) “Strategic Management has immense importance and relevance in today’s corporate
world.” Discuss in detail.
Importance and relevance of strategic management in today’s
corporate world.-

Crafting and executing strategy are top priority managerial tasks for two very big reasons –

1) There is a compelling need for managers to proactively shape the company’s

business.

2) A strategy-focused organization is more likely to be a strong bottom line performer.

Although senior managers have lead responsibility for crafting and executing a company’s
strategy, it is the duty of board director’s to exercise strong oversight and see that the five
tasks of strategic management are done in a manner that benefits the shareholders or
stakeholders in watching over management’s strategy-making and actions making sure that
executive actions are not only proper but also aligned with the interests of stakeholders, a
company’s board of directors have three obligations to fulfill

1) Be inquiring critics and overseers.

Board members must ask probing questions and draw on their business
acumen to make independent decisions about strategy proposals
2) Evaluate caliber of senior executive’s strategy making and executing skills-the board
has the responsibility of determining whether the current CEO is doing the right job or
not.

3) Institute a compensation plan for top executives that reward them for the actions and
result than serving the stakeholders.
 (2) Explain the Strategic Management Process
Strategy-Making, Strategy-Executing Process-

1) Developing a Strategic Vision-

Phase 1 of the Strategy-Making Process

 Involves thinking strategically about

 Future direction of company
 Changes in company’s product-market-
customer-technology to improve
 Current market position
 Future prospects

A strategic vision is a road map showing the route a company intends to take in
developing and strengthening its business. It paints a picture of a company’s
destination and provides a rationale for going there.

Key Elements of a Strategic Vision-

 Delineates management’s aspirations for the business –

 Charts a strategic path for the future
“Where are we going?”
 Steers energies of employees
in a common direction
 Molds organizational identity
 Is distinctive and specific to
a particular organization
 Avoids use of generic language
 Triggers strong emotions
 Is challenging, uncomfortable, nail biting
Example-

Red Hat Linux

To extend our position as the most trusted Linux and open source provider to the
enterprise. We intend to grow the market for Linux through a complete range of
enterprise Red Hat Linux software, a powerful Internet management platform, and
associated support and services.

2) Setting Objectives-

Phase 2 of the Strategy-Making Process

 Purpose of setting objectives

 Converts vision into specific performance targets
 Creates yardsticks to track performance
 Pushes firm to be inventive, intentional, and
focused in its actions
 Setting challenging, achievable
objectives guards against
 Complacency
 Internal confusion
 Status quo performance

3) Crafting a Strategy-
Phase 3 of the Strategy-Making Process

 Strategy-making involves entrepreneurship –

searching for opportunities
 To do new things or
 To do existing things in new or better ways
 Strategizing involves
 Picking up on happenings in the external environment and
 Steering company activities in new directions dictated by shifting market
conditions

Activities Involved in Crafting a Strategy-

 Studying market trends and actions of competitors

 Listening to customers, anticipating their changing needs
 Scrutinizing business possibilities
based on new technology
  Building firm’s market position
via acquisitions or new products
 Pursuing ways to strengthen
firm’s competitive capabilities

4) Implementing and Executing Strategy

Phase 4 of the Strategy-Making Process-

 Action-oriented, operations-driven activity aimed at shaping performance of core

business activities in a strategy-supportive manner
 Tougher and more time-consuming
than crafting strategy
 Key tasks include
 Improving efficiency of the strategy being executed
 Showing measurable progress in achieving targeted results

What Does Strategy Implementation Involve?

 Building a capable organization
 Allocating resources to strategy-critical activities
 Establishing strategy-supportive policies
 Instituting best practices and programs for
continuous improvement
 Installing information, communication, and operating systems
 Motivating people to pursue the target objectives
 Tying rewards to achievement of results
 Creating a strategy-supportive corporate culture
 Exerting the leadership necessary to drive the process forward and keep improving

5) Evaluating Performance and Making Corrective Adjustments

Phase 5 of the Strategy-Making Process

 Tasks of crafting and implementing the strategy are not a one-time exercise
 Customer needs and competitive conditions change
 New opportunities appear; technology
advances; any number of other
outside developments occur
 One or more aspects of executing the
strategy may not be going well
  New managers with different ideas take over
 Organizational learning occurs
 All these trigger the need for corrective actions and adjustments on an as-needed
basis

INTRODUCTION TO STRATEGIC MANAGEMENT

QUESTION BANK I

By :

AKSHAY.T.SHAH
AMIT KUMAR JAIN
ANAND RAHUL