Strategic Management | List and discuss the different types of corporate strategies

List and discuss the different types of corporate strategies.

Robbins / Coulter, MANAGEMENT, 12th edition, Pearson, 2014

www.pearson.co.uk

This is a guidance answer ... your actual answer during the exam should be longer than this answer ...

Strategic Management | List and discuss the three levels of strategy that a large organization must develop

List and discuss the three levels of strategy that a large organization must develop.

Robbins / Coulter, MANAGEMENT, 12th edition, Pearson, 2014

www.pearson.co.uk

This is a guidance answer ... your actual answer during the exam should be longer than this answer ... 

Strategic Management | Describe the strategic management process and identify the six stages in the process

Describe the strategic management process and identify the six stages in the process.

Robbins / Coulter, MANAGEMENT, 12th edition, Pearson, 2014

www.pearson.co.uk

This is a guidance answer ... your actual answer during the exam should be longer than this answer ...

Strategic Management | Explain strategic management and why it is important?

Explain strategic management and why it is important.

Robbins / Coulter, MANAGEMENT, 12th edition, Pearson, 2014

www.pearson.co.uk

Strategic Management | List and discuss the three competitive strategies, according to Michael Porter. Include specific examples of companies that pursue each of the three competitive strategies

List and discuss the three competitive strategies, according to Michael Porter. Include specific examples of companies that pursue each of the three competitive strategies.

Answer

a.     Cost leadership strategy—when an organization sets out to be the lowest-cost producer in its industry, it’s following a cost leadership strategy. A low-cost leader aggressively searches out efficiencies in production, marketing, and other areas of operation. Overhead is kept to a minimum, and the firm does everything it can to cut costs. For example, at Wal-Mart’s headquarters in Bentonville, Arkansas, office furnishings are sparse and drab, but functional. Although low-cost leaders don’t place a lot of emphasis on “frills,” the product or service being sold must be perceived as comparable in quality to that offered by rivals or at least be acceptable to buyers. Examples of companies that have used the low-cost leader strategy include Wal-Mart, Hyundai, and Southwest Airlines.

b.     Differentiation strategy—the company that seeks to offer unique products, which are widely valued by customers is following a differentiation strategy. Sources of differentiation might be exceptionally high quality, extraordinary service, innovative design, technological capability, or an unusually positive brand image. The key to this competitive strategy is that whatever product or service attribute is chosen for differentiation must set the firm apart from its competitors and be significant enough to justify a price premium that exceeds the cost of differentiation. Practically any successful product or service can be identified as an example of the differentiation strategy: Nordstrom (customer service), Sony (reputation for quality and innovative design), Coach handbags (design and brand image), and Kimberly-Clark’s Huggies Pull-Ups (product design)

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c.      Focus strategy—the aim of the focus strategy is at a cost advantage or a differentiation advantage in a narrow segment. That is, managers select a market segment or group of segments in an industry and don’t attempt to serve the broad market. The goal of a focus strategy is to exploit a narrow segment of a market. These segments can be based on product variety, type of end buyer, distribution channel, or geographical location of buyers. Research suggests that the focus strategy may be the most effective choice for small businesses because they typically do not have the economies of scale or internal resources to successfully pursue one of the other two strategies.

Source: Management, 11e (Robbins/Coulter)

Strategic Management | Discuss the concept of competitive advantage. Include specific examples of companies and their respective competitive advantages to support your answer

Discuss the concept of competitive advantage. Include specific examples of companies and their respective competitive advantages to support your answer.

Answer

Competitive advantage is what sets an organization apart, that is, its distinctive edge. That distinctive edge comes from the organization’s core competencies, which might be in the form of organizational capabilities—the organization does something that others cannot do or does it better than others can do it. For example, Dell has developed a competitive advantage based upon its ability to create a direct-selling channel that’s highly responsive to customers. Southwest Airlines has a competitive advantage because it is skilled in giving passengers what they want—quick, convenient, and fun service. Or those core competencies that lead to competitive advantage also can come from organizational assets or resources—the organization has something that its competitors do not have. For instance, Wal-Mart’s state-of-the-art information systems allows it to monitor and control inventories and supplier relations more efficiently than its competitors, which Wal-Mart has turned into a price advantage.

Source: Management, 11e (Robbins/Coulter) 

Strategic Management | 3 Main Types of Corporate Strategies

List and discuss the different types of corporate strategies.  

Answer: 

The three main types of corporate strategies are growth, stability, and renewal.

a. Growth - A growth strategy is when an organization expands the number of markets served or products offered, either through its current business(es) or through new business(es). Because of its growth strategy, an organization may increase revenues, number of employees, or market share. Organizations grow by using concentration, vertical integration, horizontal integration, or diversification.

b. Stability - A stability strategy is a corporate strategy in which an organization continues to do what it is currently doing. Examples of this strategy include continuing to serve the same clients by offering the same product or service, maintaining market share, and sustaining the organization's current business operations. The organization does not grow, but does not fall behind, either.

c. Renewal - When an organization is in trouble, something needs to be done. Managers need to develop strategies, called renewal strategies, that address declining performance. The two main types of renewal strategies are retrenchment and turnaround strategies. 

Source: Management, 11e (Robbins/Coulter)

Strategic Management | Explain Strategic Management & Why It Is Important

Explain strategic management and why it is important. 

Answer: 

Strategic management is what managers do to develop the organization's strategies. It is an important task involving all the basic management functions—planning, organizing, leading, and controlling.

There are three reasons as to why strategic management is important.

The most significant one is that it can make a difference in how well an organization performs. Generally, there is a positive relationship between strategic planning and performance. Generally, organizations that use strategic management have higher levels of performance.

Another reason it is important has to do with the fact that managers in organizations of all types and sizes face continually changing situations. They cope with this uncertainty by using the strategic management process to examine relevant factors and decide what actions to take.

Finally, strategic management is important because organizations are complex and diverse. Each part needs to work together toward achieving the organization's goals; strategic management helps do this.

Today, strategic management has become so important that both business organizations and not-for-profit organizations use it. 

Source: Management, 11e (Robbins/Coulter)