Important topics to be learnt for the Strategic Management Exam.

1. The Strategic Management Process

2. The external environment

3. The five forces model of competition
• Five forces model is a strategy tool
• Identifies sources of threats and opportunities.

4. Components of internal analysis

5. Value Chain

6. A model of competitive rivalry

7. Five business-level strategies
 8. Value-creating diversification strategies
 Operational and corporate relatedness

9. Mergers, acquisitions and takeovers:

What are the differences?
• Definitions
• a merger is a strategy through which two firms agree to integrate their operations on a
relatively co-equal basis
• an acquisition is a strategy through which one firm buys a controlling, or 100%,
interest in another firm with the intent of making the acquired firm a subsidiary business
within its portfolio
• a takeover is an acquisition strategy wherein the target firm did not solicit the acquiring
firm’s bid.

10. Reasons for acquisitions

1. Increased market power.
2. Overcoming entry barriers.
3. Cost of new product development.
4. Increased speed to market.
5. Lower risk compared to developing new products.
6. Increased diversification.
7. Reshaping the firm’s competitive scope.
11. International corporate-level strategy
Focuses on the scope of the firm’s operations through product and geographic diversification.
• International corporate level strategy is required when firms operate in multiple industries and
multiple countries or regions.
•Some corporate strategies give individual country business units the authority to develop
their own business-level strategies.
•Other corporate strategies dictate business level strategies to standardise products and
share resources across country business units.

International corporate-level strategy (cont.)

12. Strategic controls and financial controls in a balanced scorecard framework

 13. Strategic leadership and the strategic management process

Sample Exam Question:

Question 3

From the perspective of

strategy implementation, explain the benefits from using Balanced
Scorecard. (20 marks)

Question 4

Use at least two strategies to

consider what advice you
would give BIL about their future. Give clear reasons for your
advice using theory to support your answer.