Master of Business Administration-MBA Semester 4

MB0052 – Strategic Management and Business Policy - 4 Credits

Assignment Set- 1 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q.1 What similarities and differences do you find in BCG

business portfolio matrix, Ansoff growth matrix and GE
growth pyramid. (10 marks)

Ans. Strategic Advantage Profile (SAP) shows the strength and weakness
of an organisation. Preparation of SAP is very similar to ETOP analysis.
The five functional areas in most organisations are production or operation,
finance or accounting, marketing or distribution, human resource and
corporate planning, and research and development. These functional areas
are listed to identify their relative strengths and weaknesses in SAP. Very
similar to the ETOP analysis, positive, neutral, and negative signs are
denoted and brief description is written in SAP profile. Each functional area
is very broad and has many constituents.

1 BCG portfolio matrix

The BCG matrix is a portfolio management tool used in product life cycle.
BCG matrix is often used to highlight the products which get more funding
and attention within the company. During a product’s life cycle, it is
categorised into one of four types for the purpose of funding decisions.
Figure below depicts the BCG matrix.

BCG Growth Matrix

new products with potential success, but they need a lot of cash for
development. If such a product gains enough market to become a market
leader, which is categorised under Stars, the organisation takes money
from more mature products and spends it on Question Marks.
Stars (high growth, high market share) are products at the peak of their
product life cycle and they are in a growing market. When their market rate
grows, they become Cash Cows.
Cash Cows (low growth, high market share) are typically products that
bring in far more money than is needed to maintain their market share. In
this declining stage of their life cycle, these products are milked for cash
that can be invested in new Question Marks.

Dogs (low growth, low market share) are products that have low market
share and do not have the potential to bring in much cash. According to
BCG matrix, Dogs have to be sold off or be managed carefully for the small
amount of cash they guarantee.
The key to success is assumed to be the market share. Firms with the
highest market share tend to have a cost leadership position based on
economies of scale among other things. If a company is able to apply the
experience curve to its advantage, it should able to produce and sell new
products at low price, enough to garner early market share leadership.
Limitations of BCG matrix:

• The use of highs and lows to form four categories is too simple
• The correlation between market share and profitability is questionable.
Low share business can also be profitable.

• Product lines or business are considered only in relation to one

competitor: the market leader. Small competitors with fast growing shares
are ignored.
• Growth rate is the only aspect of industry attractiveness

• Market share is the only aspect of overall competitive position

2 Igor Ansoff growth matrix

The Ansoff Growth matrix is a tool that helps organisations to decide about
their product and market growth strategy. Growth matrix suggests that an
organisation’s attempts to grow depend on whether it markets new or
existing products in new or existing markets. Ansoff’s matrix suggests
strategic choices to achieve the objectives. Figure 3.6 depicts Ansoff
growth matrix.

3 McKinsey/GE growth pyramid

The McKinsey/GE matrix is a tool that performs a business portfolio

analysis on the Strategic Business units in an organisation. It is more
sophisticated than BCG matrix in the following three aspects:

• Industry (market) attractiveness – Industry attractiveness replaces market

growth. It includes market growth, industry profitability, size and pricing
practices, among other possible opportunities and threats.

• Competitive strength – Competitive strength replaces market share. It

includes market share as well as technological positions, profitability, size,
among other possible strengths and weaknesses.

• McKinsey/GE growth pyramid matrix works with 3*3 grids while BCG
matrix is 2*2 matrixes.

External factors that determine market attractiveness are the following:

• Market size

• Market growth

• Market profitability

• Pricing trends

• Competitive intensity/rivalry

• Overall risk of returns in the industry

• Opportunity to differentiate products and services

• Segmentation

• Distribution structure (e.g., retail, direct, wholesale)

Internal factors that affect competitive strength are the following:

• Strength of assets and competencies

• Relative brand strength

• Market share

• Customer loyalty

• Relative cost position (cost structure compared to competitors)

• Distribution strength

• Record of technological or other innovation

• Access to financial and other investment resources

Ansoff Growth Matrix

Market penetration – Market penetration is a strategy where the business

focuses on selling existing products into existing markets. This increases
the revenue of the organisation.

Market development – Market development is a growth strategy where the

business seeks to sell its existing products into new markets. This means
that the product is the same, but it is marketed to a new audience.

Product development – Product development is a growth strategy where a

business aims to introduce new products into existing markets. This
strategy may need the development of new competencies and requires the
business to revise products to appeal to existing markets.

Diversification – Diversification is the growth strategy where a business

markets new products in new markets. This is an intrinsically riskier
strategy because the business is moving into markets in which it has little
or no experience.

For a business to adopt a diversification strategy, it should have a clear

idea about what it expects to gain from the strategy and an honest
assessment of the risks.

Market Penetration
Product Development

Market Development

Diversification

New Market Existing Market

Q.2 Discuss the investment strategies applicable for businesses and

methods to rectify faulty investment strategies. (10 marks)

Q.3. a. Distinguish policy, procedure and programmes with

examples. (5 marks)

b. Give a short note on synergy. (5 marks)

Ans. What we have traced so far is society's increasing complexity and the many
indicators that we could now be living through the most dramatic and crucial period
of human history: the progressive integration of human minds into a single living
system—a global brain.

Yet we do not have to look far to see that humanity today is also on the brink of disaster.
Paradoxically, the very same technological, scientific, and social advances that have pushed us
so far forward may also contain the seeds of our demise. We appear to be wavering precariously
between two mutually exclusive directions: breaking through to become a global social
superorganism or breaking down into chaos and possible extinction.

Clearly, given the choice, most people would not opt consciously for catastrophe. Nevertheless,
as a group we seem to be drifting in that direction. Unable to fathom the complexity of the
society we have become, we seem powerless to steer it in the direction we would want it to go.
Why is this? Why are we not more like the organism we have the potential to be?

The answer lies in what characterizes a successfully functioning organism. When we look at
organisms that work—and just about every organism apart from human society does work—we
find that there is one particular quality that they all share: the many components naturally and
spontaneously function together, in harmony with the whole. This characteristic can be seen
operating in organisms as different as a slime mold, an oak tree, or the human body. This
harmonious interaction can be described by the word synergy, derived from the Greek syn-ergos,
meaning "to work together."
Synergy does not imply any coercion or restraint, nor is it brought about by deliberate effort.
Each individual element of the system works toward its own goals, and the goals themselves may
be quite varied. Yet the elements function in ways that are spontaneously mutually supportive.
Consequently, there is little, if any, intrinsic conflict.

The word synergy has sometimes been used in the sense of the whole being greater than the sum
of its parts. But this is not the word's root meaning; this interpretation is a consequence of
synergy in its original sense. Because the elements in a synergistic system, support each other,
they also support the functioning of the system as a whole, and the performance of the whole is
improved.

An excellent example of a system with high synergy is your own body. You are an assortment of
several trillion individual cells, each acting for its own interest, yet each simultaneously
supporting the good of the whole. A skin cell in your finger is doing its job as a skin cell, taking
in various nourishments, getting rid of its waste products, and living and dying as a skin cell. It is
not directly concerned with what is happening to a skin cell in your toe nor to what is happening
to your bone cells, brain cells, or muscle cells. It is simply looking after its own interests. Yet, its
own interests are also the general interests of other cells in the body, and the activity of the
organism as a whole. If it were not for this high degree of synergy, each of us would be just a
mass of jelly, each cell acting only for itself and not contributing to the rest of the body.

Synergy in an organism is the essence of life, and it is intimately related to health. When for
some reason synergy drops and the organism as a whole does not receive the full support of its
many parts, it becomes ill. When synergy is lost altogether, the organism dies. The individual
cell may live on, but the whole, the living organism, no longer exists.

Likewise in social groups, synergy represents the extent to which the activities of the individual
support the group as a whole. Anthropologists studying primitive tribal systems have found that
groups high in synergy tend to be low in conflict and aggression, both between individuals and
between individuals and the group. This does not mean that such societies are full of "do-
gooders" desperately trying to help each other; rather, they are societies in which the social and
psychological structures are such that the activity of the individual is naturally in tune with the
needs of others and the needs of the group.

Viewed as a system, human society today would appear to be in a state of comparatively low
synergy. As we shall see shortly, many of the crises now facing us may be symptomatic of this
deeper, underlying problem. Yet as much as we might want increased synergy in society, it will
not come about simply through desire, intellectual decision, argument, or coercion. The amount
of synergy in a society is a reflection of the way in which we perceive ourselves in relation to the
world around. In order to increase synergy, then, we will need to change some fundamental
assumptions that lie at the core of our thinking and behavior. This will mean evolving inwardly
as much as we have done outwardly.

The spearhead of evolution is now self-reflective consciousness. If evolution is indeed to push on

to yet higher levels of integration, the most crucial changes will take place in the realm of human
consciousness. In effect the evolutionary process has now become internalized within each of us.
To see what this means, and how we may evolve inwardly, let us start by looking at how our
internal model of ourselves governs our perception, thinking, and action.

Q.4. Select any established Indian company and analyse the different
types of strategies taken up by the company over the last few years.
(10 marks)

Q. 5 Why do you think it is necessary for organisations to have vision

and mission statements and also core competencies? Support your
answer with relevant examples. (10 marks)

Ans. An organizational mission is an organization's reason for existence. It often

reflects the values and beliefs of top managers in an organization. A mission statement
is the broad definition of the organizational mission. It is sometimes referred to as a
creed, purpose, or statement of corporate philosophy and values. A good mission
statement inspires employees and provides a focus and direction for setting lower level
objectives. It should guide employees in making decisions and establish what the
organization does. Mission statements are crucial for organizations to prosper and grow.
While studies suggest that they have a positive impact on profitability and can increase
shareholder equity, they also support that almost 40 percent of employees do not know
or understand their company's mission.

Not only large corporations benefit from creating mission statements but small
businesses as well. Entrepreneurial businesses are driven by vision and high aspirations.
Developing a mission statement will help the small business realize their vision. Its
primary purpose is to guide the entrepreneur and assist in refining the planning process.
By developing a strategic plan that incorporates the mission statement, entrepreneurs
are more likely to be successful and stay focused on what is important. The mission
statement encourages managers and small business owners alike to consider the nature
and scope of the business. Business Week attributes 30 percent higher return on several
key financial measure for companies with well-crafted mission statements.

COMMON ELEMENTS
While mission statements vary from organization to organization and represent the
distinctness of each one, they all share similar components. Most statements include
descriptions of the organization's target market, the geographic domain, their concern
for survival, growth and profitability, the company philosophy, and the organization's
desired public image. For example:

Our mission is to become the favorite family dining restaurant in every neighborhood in
which we operate. This will be accomplished by serving a variety of delicious tasting and
generously portioned foods at moderate prices. Our restaurants will be clean, fun, and
casual. Our guests will be served by friendly, knowledgeable people that are dedicated to
providing excellent customer service.

This mission statement describes the target market, which are families and the
geographic domain of neighborhoods. It clearly states how it expects to be profitable by
offering excellent customer service by friendly, knowledgeable people. When defining
the mission statement it is important to take into account external influences such as the
competition, labor conditions, economic conditions, and possible government
regulation. It is important to remember however, that mission statements that try to be
everything to everybody end up being nothing to anybody.

Companies should have mission statements that clearly define expected shareholder
returns and they should regularly measure performance in terms of those expected
returns. If the major reason for a business's existence is to make a profit then it stands
to reason that expectations of profit should be included in the organization's mission.
This means that management should reach a consensus about which aspects of the
company's profit performance should be measured. These might include margin growth,
product quality, market share changes, competitive cost position, and capital structure
efficiency.

A mission statement sets the boundaries for how resources should be allocated and what
strategic and operational goals should be set. The mission statement should
acknowledge the company's strengths and then inform employees where to direct their
efforts in order to take advantage of those strengths. Before writing a mission statement
organizations should take a look at how they are different from the competition,
whether it is in technology, image and name brand, or employees. It can often be
thought of as a recipe for success because it not only defines the organization's
accomplishments but it also provides employees with directions to help them develop
plans and look for opportunities for improvement.

The organization defines what is acceptable behavior through the mission statement.
Values and beliefs are the core of a strong mission statement. For example:

Quality and values will secure our success. We will live by our values, have fun, and take
pride in what we do. Our values are to maintain a work environment where people enjoy
coming to work, to serve our guests and exceed their expectations, and to be profitable
and result oriented.

This mission statement is simple and straightforward. It does not, however, specify the
products or target market. The mission statement also provides meaning to the
organization by stating not only what goals the company wants to achieve but also why it
wants to achieve these goals. It is not effective unless it is challenging and forces
workers to establish goals and means to measure the achievement of those goals. A
mission statement should inspire employees and get them involved in the organization.
It has been called the glue that holds the organization together through shared values
and standards of behavior. A mission statement should be relevant to the history,
culture, and values of the company.

Many statements refer to the social responsibility of the organization. For example, a
company can show their concern for the community in the following:

To be involved as good corporate citizens wherever we are around the world. We will
treat customers and distributors with honesty, courtesy, and respect. We will respect
and preserve the environment. Through all of this we will prove to be the worldwide
leader in industry trade.

One important issue in organizations today is the concern with diversity. While it is not
a traditional point included in mission statements, more and more companies are
including it because of the globalization of the economy and the increased diversity of
the workforce.

Before writing a mission statement, leaders in the organization must have an idea of
what is in store for the future. This vision is the foundation for the mission statement.
The vision provides a strategic direction, which is the springboard for the mission and
its related goals. A vision statement differs from a mission statement. Vision statements
are a view of what an organization is striving to become. For example:

To bring back to neighborhoods all over America the importance of family unity. We will
view ourselves as a family so these attributes will be carried over into our service.

They guide an organization into the future while mission statements are a reflection of
the present. Because vision statements are a glimpse into the future, they are often not
realized for several years. Organizations go through many changes and can face times of
confusion and uncertainty. Changes are not always expected or easy, so a well thought
out vision statement will help everyone stay focused and meet the organization's goals.

Some examples of well-known companies' mission statements:

• Wal-Mart: "To give ordinary folk the chance to buy the same thing as rich
people."
• 3M: "To solve unsolved problems innovatively."
• Walt Disney: "To make people happy."

Historically, these may have seemed arrogant. But consider the outcome of the following
mission statements from each company's early days:

• Ford Motor Company: "Ford will democratize the automobile."

• Sony: "Become the company most know for changing the world-wide poor-
quality image of Japanese products."
• Wal-Mart: "Become a $125 billion company by the year 2000."
 • WRITING A MISSION STATEMENT
• When creating a mission statement there are a few simple guidelines that can be
followed. It is important to remember the basics so the mission statement stays
simple and straight to the point. Some researchers agree that it should be kept to
between 30 and 60 words, while others believe it does not necessarily have to be
that brief. Some organizations have mission statements that are only one
sentence, while others are a paragraph. An example of a mission statement that is
limited to one sentence is "Our business is selling houses and our mission is total
customer satisfaction." At a minimum, each mission statement should answer the
following three questions: (1) What are the opportunities or needs the
organization addresses? (2) What does the organization do to address those
needs? and (3) What principles and values guide the organization? In other
words, defining the organization's purpose, business and values.
• Avoiding jargon and buzzwords will keep the mission statement clear and easy to
understand. It should be universal and simple to comprehend for all employees
in the organization. It should be unique and identify the organization. A mission
statement is often what sets one company apart from the competition. It should
outline the organization's competitive advantages and differentiate it from
everyone else. Specific products/services offered as well as markets or customers
should be included. Also a general business definition, behavioral standards, and
desired competitive position can be added to a strong mission statement.

CORE BELIEFS AND VALUES

Just as they underlie organizational culture, beliefs and values are a critical part of
guiding philosophy and therefore vision. One CEO expressed the importance of core
values and beliefs this way:

I firmly believe that any organization, in order to survive and achieve success, must have a sound set of
beliefs on whichit premises all its policies and actions. Next, I believe that the most important single factor
in corporate success is faithful adherence to those beliefs. And, finally, I believe [the organization] must
be willing to change everything about itself except those beliefs as it moves through corporate life.
(Collins and Porras 1991)

Core values and beliefs can relate to different constituents such as customers,
employees, and shareholders, to the organization's goals, to ethical conduct, or to the
organization's management and leadership philosophy. Baxter Healthcare Corporation
has articulated three Shared Values: Respect for their Employees, Responsiveness to
their Customers, and Results for their Shareholders, skillfully linking their core values to
their key constituencies and also saying something about what is important to the
organization. The key, however, is whether these are not only stated but also
operating values.

Collins and Porras have provided examples of core values and beliefs from a survey of
industry they conducted, and cite the following examples, among others:

• About People

Marriott: "See the good in people, and try to develop those qualities."

• About Customers

L.L. Bean: "Sell good merchandise at a reasonable price; treat your customers like you
would your friends, and the business will take care of itself."

• About Products

Sony: "We should always be the pioneers with our products--out front leading the
market. We believe in leading the public with new products rather than asking them
what kind of products they want."

• About Management and Business

Motorola: "Everything will turn out alright if we just keep in motion, forever moving
forward."

Q. 6. What is SBU? Explain its features, functions and roles. Mention

some of the successful SBU of MNC’s. (10 marks)

Ans. Strategic Business Unit (SBU) is necessary when corporation starts to

provide different products and hence, need to follow different strategies.

SBUs are also known as strategy centers, Independent Business Unit or

even Strategic Planning Centers.

Strategic Business Unit (SBUs) is necessary when corporation starts to

provide different products and hence, need to follow different strategies. To
ease its operation, corporate set different groups of product/product line
regarding the strategy to follow (in terms of competition, prices,
substitutability, style/ quality, and impact of product withdrawal). These
strategic groups are called Strategic Business Units (SBUs).

SBUs are also known as strategy centers, Independent Business Unit or

even Strategic Planning Centers.

Each Business Unit must meet the following criteria:

1. Have a unique business mission, independent from other SBUs.

2. Have clearly definable set of competitors.
3. Is able to carry out integrative planning relatively independently of
other SBUs.
4. Should have a Manager authorized and responsible for its operation.

Features
 Assignment Set- 2 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q.1 Explain with respect to policies – steps in framing business policy

and stages of policy cycle. Will these help in decision making? (10
marks)

Q.2 Assess the challenges involved in Strategic Management in the

near future. (10 marks)

Q.3 Four years back, Pure Ltd. was a newly started company. It deals
in designer fabrics. Its top management comprises mainly of young
talented persons. They would to know to make the company follow
ethical codes and practice CSR as the company moves ahead. They
are also interested in meeting its business obligations. Could you
suggest to the management on how to go about it? (10 marks)

Q.4. What is BCP? Discuss its importance and influence on strategic

management. How contingency planning is related to BCP? (10
marks)

Ans. Business continuity planning (BCP) is “planning which identifies

the organization's exposure to internal and external threats and synthesizes
hard and soft assets to provide effective prevention and recovery for the
organization, whilst maintaining competitive advantage and value system
integrity”.[1] It is also called Business continuity & Resiliency planning
(BCRP). The logistical plan used in BCP is called a business continuity
plan. The intended effect of BCP is to ensure business continuity, which is
an ongoing state or methodology governing how business is conducted.

In plain language, BCP is working out how to stay in business in the event
of disaster. Typical incidents include local events like building fires, regional
incidents like earthquakes or floods, or national incidents like pandemic
illnesses. However, it is not limited to just that. Any event that could cause
the potential for loss of business should be considered, including any event
that the business is dependent on, such as loss of source of supply, loss of
critical infrastructure (a major piece of machinery or computing/network
resource), or the result of theft or vandalism. As such, risk management
must be incorporated as part of BCP.

BCP may be a part of an organizational learning effort that helps reduce

operational risk. This process may be integrated with improving security
and corporate reputation risk management practices.

Q. 5 Mention any 5 successful strategic alliances and discuss the key

aspects concerned with it. What kinds of problems were faced by
companies that were involved in these strategic alliances? (10 marks)

Q. 6 Give a note on strategic evaluation and strategic control. (10

marks)

Ans. The basic premise of strategic management is that the chosen

strategy will achieve the organization's mission and objectives.

A firm's successive strategies are greatly affected by its past history and
often take shape through experimentation and ad hoc refinement of current
plans, a process James Quinn has termed "logical incrementalism".
Therefore, the reexamination of past assumptions, the comparison of
actual results with earlier hypotheses have become common features of
strategic management.

This chapter describes the nature of control, strategic controls and explains
a how to set them up. It them explains key operational control systems
necessary to support strategic control.

Management control refers to the process by which an organization

influences its subunits and members to behave in ways that lead to the
attainment of organizational objectives. Management control is a
systematic effort to set performance standards with planning objectives, to
design information feedback systems, to compare actual performance with
these predetermined standards, to determine whether there are any
deviations and to measure their significance, and to take any action
required to assure that all corporate resources are being used in the most
effective and efficient way possible in achieving corporate objectives.

Management can implement controls before an activity commences, while

the activity is going on, or after the activity has been completed. The three
respective types of control based on timing are feedforward, concurrent,
and feedback. Feedforward control focuses on the regulation of inputs
(human, material, and financial resources that flow into the organization) to
ensure that they meet the standards necessary for the transformation
process.

Feedforward controls are desirable because they allow management to

prevent problems rather than having to cure them later. Unfortunately,
these control require timely and accurate information that is often difficult to
develop. Feedforward control also is sometimes called preliminary control,
precontrol, preventive control, or steering control.

However, some authors use term "steering control" as separate types of

control. This types of controls are designed to detect deviation some
standard or goal to allow correction to be made before a particular
sequence of actions is completed. Concurrent control takes place while an
activity is in progress. It involves the regulation of ongoing activities that are
part of transformation process to ensure that they conform to organizational
standards. Concurrent control is designed to ensure that employee work
activities produce the correct results.
Since concurrent control involves regulating ongoing tasks, it requires a
through understanding of the specific tasks involved and their relationship
to the desired and product.

Concurrent control sometimes is called screening or yes-no control,

because it often involves checkpoints at which determinations are made
about whether to continue progress, take corrective action, or stop work
altogether on products or services.

Each organization has its own approach to evaluation. There are not
absolute answers as to the proper evaluation standards. However, there
are three basic questions to ask in strategy evaluation:

1.Is the existing strategy any good?

2.Will the existing strategy be good in the future?

3.Is there a need to change a strategy?

The first question may need additional detailing to indicate whether the
current strategy is useful and beneficial to the organization.

Seymour Tilles has written a classic article on the qualitative assessment of

organizational performance. This article serves several particular questions
to be asked for evaluation. These questions are:

1.Is the strategy internally consistent? Internal consistency refers to the

cumulative impact of various strategies on the organizations. According to
Tilles, a strategy must be judged not only in relationships to other
strategies.

2.Is organizations strategy consistent with its environment? An important

test of strategy is whether the chosen strategy in consistent with
environment (constituent demands, competition, economy, product /
industry life cycle, suppliers, customers) - whether the really make sense
with respect to what is going on outside.

3.Is the strategy appropriate in view of available resources? Resources are

those things that company is or has and that help it to achieve its corporate
objectives. Included are money, competence, facilities and other. Without
appropriate resources, organization simply cannot make strategic work.

4.Does the strategy involve an acceptable degree of risk? Strategy and

resources, taken together, determine the degree of risk which the company
is undertaken. Each company must determine the amount of risk it wishes
to incur. This is a critical managerial choice. In attempting to assess the
degree of risk associated with a particular strategy, management must
assess such issues as the total amount of resources a strategy requires,
the proportion of the organization's resources that a strategy will consume,
and the amount of time that must be committed.

5.Does the strategy have an appropriate time horizon? A significant part of

every strategy is the time horizon on which it is based. For example, a new
product developed, a plant put on stream, a degree of market penetration,
become significant strategic objectives only if accomplished by a certain
time. Management must ensure that the time necessary to implement the
strategy is consistent. Inconsistency between these two variables can
make it impossible to reach goals in a satisfactory way.

6.Is the strategy workable?

E. P. Learned and others, building on the Tilles model, suggest that the
following are also proper evaluative questions:

7.Is the strategy identifiable? Has it been clearly and consistently identified
and are people aware of it?

8.Is the strategy appropriate to the personal values and aspirations of key
managers?
9.Does strategy constitute a clear stimulus to organizational effort and
commitment?

10.Is the strategy socially responsible?

11.Are there early indications of the responsiveness of markets and market

segments to the strategy?

J. Argenti adds:

12.Does the strategy rely on weakness or do anything to reduce them?

13.Does the strategy exploit major opportunities?

14.Does it avoid, reduce, or mitigate the major threats? If not, are there
adequate contingency plans?

All these questions can by applied as the strategy progresses through its
various stages, including implementation. The answers can provide
guidelines as to how the strategy should be altered or changed.

The second basic question "Will the existing strategy be good in the
future?" seeks to ascertain if the strategy would continue to satisfy the
firm's objective in the future. The answer to this is based upon
unforeseeable changes in the organization's environment or resources, or
changes in its mission, goals, or objectives.

The answer to the third question "Is there a need to change the strategy?"
will provide direction toward a strategy formation task.Qualitative
measurements methods can be very useful, but their application involves
significant amounts of human judgment. Thus, conclusions based on such
methods must be drawn carefully