MODULE 4 – THE COMPETITIVE ENVIRONMENT

Q1: What is meant when we refer to strategy and a strategic perspective?

Answer: All firms exist in a competitive environment, with competitors trying to attract the
same customers. Therefore, a firm implements a strategy that its competitors are unable to
implement.

Q2: What are the things that a company must do in order to have a competitive advantage?

Answer: Firm can hire the right people, train them to be effective, place them in the right
jobs, motivate them to work hard, and retain them.

Q3: What is an organization’s purpose?

Answer: It is the organization’s basic reason for existence.

Q4: What is an organization’s mission?

Answer: It is the organization’s statement of how it intends to fulfill its purpose.

Q5: What is a Top Management Team?

Answer: The organization’s group of senior executives responsible for the overall strategic
operation of the firm.

Q6: What is Corporate Strategy?

Answer: It deals with determining what businesses the corporation will operate.

Q7: What is Business Strategy?

Answer: It deals with how the firm will compete in each market where it conducts business.

Q8: What is Functional Strategy?

Answer: It deals with how the firm will manage each of its major functions (such as
marketing, finance, and human resources).

Q9: What is Growth Strategy?

Answer: It focuses on growing and expanding the business, which can be pursued through
joint ventures or acquisitions.

Q10: What is Retrenchment Strategy?

Answer: It occurs when an organization’s operations are not effective and changes are
required.
Q11: What is Stability Strategy?

Answer: It is the strategy that maintains the status quo.

Q12: What is Diversification Strategy?

Answer: It occurs when an organization adds new products and services.

Q13: What is Related Diversification?

Answer: It occurs when a firm achieves synergy among the various businesses it owns.

Q14: What is Unrelated Diversification?

Answer: It is used when a firm operated several unique businesses in different unrelated
markets.

Q15: What is the Adaptation Model?

Answer: It is an approach to business strategy where a firm seeks ways to adapt to its
environment.