IIM AHMEDABAD - PGPX (2020-21) Term 2

STRATEGIC MANAGEMENT – Quiz 2

TIME: 45 Minutes Name: Eshesh Gupta MAX MARKS: 30

Section: A Roll no: XC20200038

Q.1  What are strategic assets? What role do they play in helping the firms diversify? (10 marks)

1. Strategic assets are the unassailable and unique competitive strengths which are put in force by a
company in action to overtake the competition. They help to answer the question whether the
diversification will help the company or result in loss of the strategic advantage of the company

2. They also help to understand whether we will catchup with competition or leapfrog at it, and also
improve the learning potential and curve of the company by diversifying.

3. The strategic assets during diversification help to understand by answering 6 questions for
diversification success and the results aid the company to align all the strategic assets in a way that will
help the company take the decision on diversification. It also provides answers whether the company will
be like a new entrant in a market or emerge as a market leader.

Q.2 A diversified corporation has a corporate advantage when it is more than the sum of its parts. How
can it achieve this corporate advantage? (10 marks)

1. The company can achieve its corporate advantage by using resource continuum framework, wherein
they need to refer to nature of resources (general or specialised), scope of business (wide or narrow),
coordination mechanism (transferring or sharing), control systems (financial or operational), size of
corporate office (small or big). The diversification strategy will involve looking at this continuum and find
out which of these is misaligned related to the diversification strategy and requirement of a corporation.

2. Furthermore, the company has to look at the triangle of corporate strategy which showcases
relationship of organization, business and resources via competitive advantage, control and coordination at
its nodes. This relationship is very important to join at the nodes for any company to have a good
corporate strategy for execution

3. Furthermore, the learning curve while implementing the corporate strategy via mergers,
acquisitions, or self-diversification provides the much needed ammo for the top management to align the
company needs and avoid pitfalls.

Q.3  Is strategy execution important or formulating a good strategy is enough? What role does
strategy map and balanced scorecard play in strategy execution? (10 marks)

1. A strategy formulation without execution is like all talk and no results. The efforts which go into
strategy planning and formulation needs to be implement with equal fervour to get expected results to the
least.
 2. The strategy map helps to identify various perspective which can quantified (using top down
approach), starting from financial perspective, to customer perspective to internal process perspective to
learning and growth perspective. This all are interrelated and lead to the end results via quantifying various
stages in accordance to the strategy and also the interdependent relationship at each stage.

3. The balance scorecard is a strategy map and it helps the company identify the major gaps seen while
implementing a strategy at lower levels in the organization, thereby helping the management nip them in
the bud itself. The balance score card or BSC, helps the management to communicate the strategy along
entire company, thereby aligning the synergies of the entire talent pool towards the main aim itself.