Professional Documents
Culture Documents
Assignment A
Question 1: Describe the benefits of Good Strategic Planning? Define and
give examples of key terms of Strategic Management?
Answer:
Strategic planning provides a variety of benefits in the organization. Below are some
of the benefits:
1. Clearly define the purpose of the organization and to establish realistic
goals and objectives consistent with that of the mission in defined time
frame within the organizations capacity for implementation.
2. Communicate those goals and objectives to the organizations employees.
3. Develop sense of ownership of the plan.
4. Ensure the most effective use is made of the organizations resources by
focusing the resources on key priorities.
5. Provides a base from which progress can be measured and establish a
mechanism for informed change when needed.
6. Brings everyones best and most reasoned efforts have an important value
in building a consensus about where an organization is going.
Key terms of Strategic Management
1. Purpose this includes the reason why an organization exists. It includes
a description of its current and future business. The purpose of an
organization is its primary role in society, a broadly defined aim (such as
manufacturing electronic equipment) that it may share with many other
organizations of its type.
2. Mission it is the unique reason of an organization for its existence and
what sets it apart from all others. The organization's mission
describes why the organization exists and guides what it should be doing.
Often, the organization's mission is defined in a formal, written mission
statement. Decisions on mission are the most important strategic
decisions, because the mission is meant to guide the entire organization.
Although the terms "purpose" and "mission" are often used
interchangeably, to distinguish between them may help in understanding
organizational goals.
3. Goals this is the desired future state that the organization attempts to
realize. It is a personal or organizational desired end-point in some sort of
assumed development. Many people endeavor to reach goals within a
finite time by setting deadlines.
4. Objectives refers to specific targets for which measurable results can be
obtained. It also points out to the specific kinds of result the organization
5.
6.
7.
8.
Goals and objectives are often interchanged at each level. Basically it is more geared
towards what the organization would want to be in the future and the means by
which to get there. The means are needed to be quantifiable to gather accurate
interpretations.
Question 3: What should be the key Traits of a CEO? What are the forces
that design the Strategic Management Systems?
Answer:
It is noted that no two persons are alike this is also true with regards to their
personality and how they run their corporations/organizations. However, below are
some of the traits a CEO should possess to effectively run his/her organization.
1.
2.
3.
4.
5.
6.
7.
8.
9.
o
o
Technology
Market reaction time
Question 4: Discuss the various grand strategies at the Corporate Level i.e.
Stability, Growth and Retrenchment.
Answer:
In Growth, the company seeking growth faces different subgroups for it: horizontal
growth (concentration), diversification and vertical growth.
Horizontal growth there are 3 components to horizontal growth. First a
companymay decide to look for new customers. Second, a company may
decide to pursue new product. Third, the company may pursue new locations.
Vertical Integration it is an integration along a supply chain. An example
would be if a retailer now manufactures the products it sells, that is
considered as increasing its level of vertical integration.
Diversification there are 2 types of diversification. First is related
diversification, which is a common core of ones resources and capabilities.
With this, synergy rises because the related activity can increase the value
and economies of scale can save money. Second is the unrelated
diversification where it is used to lower the relative risk. Basically it is like a
portfolio, the more different each portfolio is to each other the better. Another
example is that when a product is released. It is done so over several
markets to hedge risk of failure.
In Stability, when a company is seeking slow growth or stagnation, management
usually seeks strategies geared towards stability. There are 3 elements to which
stability is used to strategize.
Pause if the internal resources are already stretched thin, organizations will
often scale down a bit and focus on control.
Proceeding with caution if there are problems in the macro environment,
the company may opt for a strategy that goes for a formidable growth..
Profit if the company has loyal customers, solid base, the strategy is to go
for research and development.
Retrenchment this strategy revolves around cutting sales. It is also a strategy that
seeks to reduce size or diversity of an organizations operations. Expenditures are
also cut off or minimize to become financially stable. Manpower headcount is also
Company culture
Strategic choices are normally grounded on the culture of the company. This
is brought about by the types of people presently employed or involved in the
organization. Any strategy to be undertaken has to take into consideration if
it is acceptable to the whole organization or it will spell doom as this will not
progress.
Resource allocation
Resources are very important in planning for strategic choices as this will be
considered as the organizations lifeline. Without resources the organization
cannot come up or manufacture products they intend to release to a specific
market. Most strategies are centered on what is the current resource
allocation and is it enough to meet the needs of the organization for
production of goods.
Assignment B
Question: Explain the concept of Porters five forces Model used for Industry
Analysis? What are the major factors that become barriers to entry in the
New Industry?
Answer:
Porters model draws upon the 5 forces to determine the competitive intensity and
attractiveness of a market. The term attractiveness is descriptive towards the overall
profitability of an industry or organization.
Major factors that become barriers to entry by new players are as follows:
Government Policies with the onset of different government regulations, this poses
as a sort of control over companies that can cause as barriers. Organizations are
required to apply for licenses and permits to operate which also asks them to pay a
rather large sum of money.
Capital considered being one of the important factors that a company/organization
must have for its business to succeed. Capital is already included prior to coming up
with the rest of the organization. This includes: resources to facilities, manpower,
inventory, salaries, and benefits among others. Capital investments differ on the
type of business being planned or put up.
Switching cost this is a cost wherein a customer changes from one supplier or
marketplace to another. The higher these costs are, the more difficult it is to execute
change. Since most of the consumers are bent straight on a product they have
grown accustomed to, when a new product comes along almost the same features,
they tend not to switch as they think it is more costly to learn the basics of the new
product and that it will lead to more time spent on figuring out the new product.
Economies of Scale this comes as a barrier for new entrants because established
companies can produce large scale quantities of their products and sell them much
cheaper than new entrants. In this case, new entrant produces the same product at
a smaller quantity but of higher cost. Suppliers and customers will not do business
with the new entrant due to high cost per product.
Product Differentiation brand loyalty plays a factor to this barrier. Many
customers who have already accepted a specific product as unique tends to cling to
it. New entrants who try to penetrate the market of the said specific product has to
spend more in terms of advertising and enticing the loyal customers to try their
product and hope to get them aboard. This is difficult for new entrants as they need
to have extra resources and capital to make this possible.
Case Study
Question 1: The Company foresees continued growth and expansion in the
coming few years globally driven by its operations in India and hopes to
realign Indias strengths and world-class market capabilities to deliver
services to its customers. Conduct the SWOT Analysis of Haiers foray in to
Indian market in light of facts given in the narration .
Answer:
Strength
Convenient geographic location
Established distribution channel
Understanding of Indian market
Diversification
Huge cash flow
Innovative
Strong mission and vision
Opportunities
Research and Development
Consolidation of other distribution
channels
Aggressive marketing and brand
management
Weaknesses
Not yet well known in India unlike its
competitors.
Threats
Discrimination the company is
identified as a Chinese company.
Low market share
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Assignment C
Objective Questions
1. Which approach to the study of leadership emphasizes the role of situational
factors and how these moderate the relationship between leader traits or
leadership behaviors and leadership effectiveness?
a) Leader-oriented approach.
b) Contingency approach.
c) Transactional approach.
d) Transformational approach
2. Porter has designed a framework to help understand why certain countries
achieve global competitive advantage in certain industries. It also helps
internationalizing firms to make location decisions. The framework is called:
a) Porter's value chain
b) Porter's Five Forces
c) Porter's Generic Strategies
d) Porter's Diamond
3. It is generally agreed that the role of strategy is to:
a) Make best use of resources
b) Make profits for the organization
c) Make the best products and services
d) Achieve competitive advantage
4. Kay (1993) sees the strategy of an organization as matching internal
capabilities with:
a) Its external relationships
b) Its customer needs
c) The industry life cycle
d) The external environment
5. An organization's external environment consists of the general or macro
environment and:
a) The internal environment
b) The competitive environment
c) The specific environment
d) The micro-environment
6. The term 'corporate strategy' concerns strategy and strategic decisions
a) In the private sector only.
b) Developed by the senior management in an organization.
c) In certain types of organizations.
d) At all levels in an organization.
7. A key characteristic of strategic decisions is:
a) They are normally definite decisions about the future of the
organization.
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diversification
current customer retention
distribution enhancement
product simplification
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39. The _____ for PepsiCo is "We believe our commercial success depends upon
offering quality and value to our consumers and customers; providing
products that are safe, wholesome, economically efficient and
environmentally sound; and providing a fair return to our investors while
adhering to the highest standards of quality."
a)
b)
c)
d)
mission
organizational code of conduct
functional code
benefits statement
40. A firm can acknowledge the critical importance of its _____, by having
explicit goals that state its intention to improve work conditions by adding
more lighting and providing the workers with more and better safety
equipment.
a) employee welfare
b) market share
c) sales revenue
d) satisfaction
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