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PRACTICE MCQs

Links for reference https://www.examveda.com/manag


ement/practice-mcq-question-on-
strategic-management/?section=1

1. http://bookboon.com/

2. https://hbr.org/topic/strategy?cm_sp=Article-_-
Modules-_-Associated%20Topics

3. http://www.mbaskool.com/

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Books_Recommended

• https://books.google.co.in/books?id=mrRqCgAAQBAJ
&printsec=frontcover&dq=Azhar+Kazmi,+Adela+Kaz
mi+McGraw-
Hill+Education&hl=en&sa=X&ved=0ahUKEwiU-
ISb0ePOAhXDpo8KHfs7CYYQ6AEIHDAA#v=onepag
e&q=Azhar%20Kazmi%2C%20Adela%20Kazmi%20
McGraw-Hill%20Education&f=false

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Books

• Page-29/Business Policy and Strategic Management,2e, By


Azhar Kozami
• https://books.google.co.in/books?id=7bbTVYIXstMC&pg=PA2
9&dq=various+levels+of+strategy&hl=en&sa=X&ei=jJNAVe2i
DYuRuASct4CABg&redir_esc=y#v=onepage&q=various%20l
evels%20of%20strategy&f=false
• Strategic Mgmt & Bus Policy 3E
• By Kazmi
• http://books.google.co.in/books?id=J8YGhhK5keUC&printsec
=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage
&q&f=false

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https://en.wikiped
ia.org/wiki/Policy

What is Business Policy?

The term "Business Policy" comprises of two words, Business and


Policy.
Business : "Business means exchange of commodities and services
for increasing utilities."
Policy : Policies may be defined as "the mode of thought and the
principles underlying the activities of an organization or an institution."
Policies are plans in they are general statements of principles which
guide the thinking, decision-making and action in an organization.
Business policy as a principle or a group of related principles, along
with their consequent rule (s) of action that provide for the successful
achievement of specific organization / business objectives. Accordingly,
a policy contains both a "principle" and a "rule of action." Both should
be there for the maximum effectiveness of a policy.
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STRATEGY:
1. https://en.wikipedia.org/wiki/Strategy
2. https://en.wikipedia.org/wiki/Strategic_management

Strategy (from Greek strategia/strategos,


"art of troop leader; office of general,
command, generalship“

The term came into use in the 6th century


AD in East Roman terminology.

In the 20th century, the word "strategy"


came to denote "a comprehensive way to try
to pursue political ends, including the threat
or actual use of force, in a dialectic of wills"
in a military conflict, in which both
adversaries interact.
STRATEGY

A strategy describes how the ends


(goals) will be achieved by the means
(resources)

Max McKeown (2011) argues that


"strategy is about shaping the future"

The human attempt to get to "desirable


ends with available means"
STRATEGY: Definitions

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Henry Mintzberg described five definitions of strategy in 1998:
• Strategy as plan – a directed course of action to achieve an intended set of goals; similar to the
strategic planning concept.
• Strategy as pattern – a consistent pattern of past behavior, with a strategy realized over time rather
than planned or intended. Where the realized pattern was different from the intent, he referred to the
strategy as emergent.
• Strategy as position – locating brands, products, or companies within the market, based on the
conceptual framework of consumers or other stakeholders; a strategy determined primarily by factors
outside the firm.
• Strategy as ploy – a specific maneuver intended to outwit a competitor.
• Strategy as perspective – executing strategy based on a "theory of the business" or natural extension
of the mindset or ideological perspective of the organization.

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Strategies in Game Theory • http://www.econp
ort.org/econport/r
equest?page=ma
n_gametheory_in
• In game theory, a strategy refers to tro1
the rules that a player uses to choose
between the available actionable
options. Every player in a non-trivial
game has a set of possible strategies
to use when choosing what moves to
make. • https://en.wikipedi
a.org/wiki/Strateg
y_(game_theory)

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EVOLUTION OF STRATEGIC MANAGEMENT

• Hofer enumerated FOUR stages of evolution of business strategy and policy.

• First phase:Mid 1930s,ad-hoc policy making,singleproduct line, limited geographical area, informal control & coordination, policies to
guide managerial action

• Second Phase:1930s-40s,planned policy formulation, integration of functional areas

• Third Phase:1960s,complexity and changes in business environment, relationship with environment, concept of strategy

• Fourth Phase: Current since 1980s,strategic processes of business firms, responsibilities of general management

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STRATEGY: MILITARY PARLANCE

The father of Western modern strategic


study, Carl von Clausewitz, defined military
strategy as “The employment of battles to
gain the end of war.“

Eastern military philosophy : The Art of


War by Sun Tzu dated around 500 B.C
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• Professor Richard P. Rumelt (2011) described strategy as a type of problem solving tool.
• He described that good strategy has an underlying structure he called a kernel.

• The kernel has three parts:


A. A diagnosis that defines or explains the nature of the challenge.
B. A guiding policy for dealing with the challenge.
C. Coherent actions designed to carry out the guiding policy.

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http://www.slides
LEVELS OF STRATEGY hare.net/wicaksa
na/strategic-
management-
series-at-diff-
levels

Operational Levels or Hierarchies Strategic Levels

Societal Strategies

Profit centers,
Strategic
Business Units

SBA-Strategic
Business Area

Operational Level Strategies

Sales,Distribution,pricing,Product
,Advertising etc.

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SBU

Panacea Biotech

Critical care Diacar PRO GROW Best on Health

Diabetes & Therapeuti Natural


Nephrology Cardiovascular c products
Clinician
products

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http://www.slate.com/
articles/news_and_p
olitics/explainer/2000
/01/whats_the_differe
nce_between_ceos_
and_chairmen.html
Strategists and Their Role

Board of directors
Chief executive officer (CEO)
Senior management
SBU-level executives
Corporate planning staff consultant
Consultant
Middle-level managers

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Role of a Strategist

• Forecaster
• Sculptor
• Diplomat
• Guru
• The Jail Buster

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Strategic Decision Making
PROCESS OF DECISION MAKING
• The decision making is the process 1. Objectives to be achieved are
of selecting a course of action from determined
among many alternatives
2. Alternative ways of achieving the
objectives are identified
3. Each alternative is evaluated in
terms of its objectives achieving
ability
4. The best alternative is chosen

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Some important issues related to
Decision Making

1. Criteria for decision 4. Variability in decision


making making
2. Rationality in decision 5. Person related factors in
making decision making
3. Creativity in decision 6. Individual versus group
making decision making

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Strategic Management

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Strategic Management Process

FOUR PHASES IN STRATEGIC MANAGEMENT PROCESS

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Model of Strategic management Process

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Activities undertaken under Strategic Management Process

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*Strategic Planning : A Process

Identify the Explain the


Process Consent organizational mission & define
capability the company

Identify key
Strategic analysis
constituents & Environmental
& choice & setting
stakeholders & analysis
corporate goal
their Expectations

Implementation & Strategic control &


Formulating the
monitoring the continuous
corporate strategy
strategy improvement

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PHASE I:ESTABLISHMENT OF STRATEGIC INTENT

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STRATEGIC INTENT

VISION
MISSION
BUSINESS DEFINITION
OBJECTIVES

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• The strategy statement of a The main constituents of a
firm sets the firm’s long-term strategic statement are as
strategic direction and broad follows:
policy directions.
• Vision Sets the broad, long
term direction, purpose and
goals of the organization.

Vision Healthy People in a Healthy World • Mission Describes the path to


reaching it.
Mission To promote health and quality of life
by preventing and controlling disease, injury, • Values Are the guidelines for
and disability day to day activity on this path

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Purpose of Vision, Mission & Values

According to Kris Cole,  Who the organization is?


together, an organization’s
vision, mission and values
achieve six things:  What it stands for?
• Help the organization  What it will achieve in
position itself in the broad terms?
marketplace
• Help employees focus on  How it will achieve it?
what’s important
 Enhance an organization’s
• Provide a framework for the reputation and help it
business plan
attract like minded
• Guide day to day activities employees.
and act as a reference point
for decision making
• Send a clear message to all
stakeholders about:

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Henry Ford: Affordable vehicle to the masses

Walt Disney: Making people happy

Vision
Jamshedji Tata: A self reliant India

• The vision is like a company The first step in establishing


dream.
an organization begins with
a dream.
• Visualization of what is
wanted and it comes alive.
• The owner should be the
one with the vision. And it
should include goals to
attaining, (short and long).

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Where are we headed?

The key questions to ask yourself here


are:
What, in broad terms do we do?
What do we aspire to become in the
future?

Microsoft’s Vision
To empower people through great software,
any time, any place, or any device.”
Wal-Mart’s Vision
To become worldwide leader in retailing.

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http://www.stockerpartnership.com/
blog/vision-values-and-purpose-
according-to-collins-and-porras/

The Process of Envisioning

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https://en.wi
kipedia.org/
wiki/Mission
_statement

MISSION

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• Mission statement is the statement of the role by which an
organization intends to serve it’s stakeholders.
• It describes why an organization is operating and thus provides
a framework within which strategies are formulated.
• It describes what the organization does (i.e., present
capabilities), who all it serves (i.e., stakeholders)
• What makes an organization unique (i.e., reason for existence).
• A mission statement differentiates an organization from others
by explaining its broad scope of activities, its products, and
technologies it uses to achieve its goals and objectives. It talks
about an organization’s present (i.e., “about where we are”).

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How will we get there?

Peter Drucker says the fundamental questions to ask when


preparing mission statements are:
What is our business?
Who is the customer?
What is value to the customer?
What will our business be?
What should our business be?
The mission underpins the vision and describes how it will
be realized.
This means that it needs to be more specific and reflect the
organization’s standards in areas such as customer service,
employee relations, product or service quality and reliability,
and profitability.

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Philip Kotler

"Organisations develop mission


statements to share them with their
managers, employees, and customers. A
well worked out mission statement
provides company employees with a
shared sense of purpose, direction and
opportunity. The company mission
statement acts as an 'invisible hand'
that guides geographically dispersed
employees to work independently and
yet collectively toward realizing the
organizations goals”.

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Characteristics

A good mission statements  Product and applications


have three major scope
characteristics:  Competence scope
1. Focus on a limited  Market segment scope
number of goals
 Vertical (distribution
2. Stress the major policies channel) scope
and values that the
 Geographical scope
company wants to
honour
3. Define the major
competitive scopes within
which the company will
operate i.e.

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Examples

• Microsoft’s mission is to help people and businesses throughout the world to realize their
full potential.
• Wal-Mart’s mission is “To give ordinary folk the chance to buy the same thing as rich
people.”

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Characteristics of a Mission Statement

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Characteristics of a Mission Statement

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VALUES
What do we stand for?
The key questions to ask here are:
What do we believe is important?
What are the internal principles that guide our
actions and the behaviour of our employees?
What do we stand for?
An organizations values show it how to do
business and respond to a crisis and shows
its employees how to behave every day.
They link with and support its vision.

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Concept of Business

• Definition
• Nature of business
• Types of business activity

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Definitions of Business

• Stephenson defines • According to Dicksee,


business as, "The regular "Business refers to a form
production or purchase of activity conducted with
and sale of goods an objective of earning
undertaken with an profits for the benefit of
objective of earning profit those on whose behalf the
and acquiring wealth activity is conducted."
through the satisfaction of
human wants." • Lewis Henry defines
business as, "Human
activity directed towards
producing or acquiring
wealth through buying and
selling of goods.“

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Characteristics of Business
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 Economic activity
 Production and acquisition of goods and
services
 Creation of utilities
 Profit making-Selling them for profit
(exchange takes place in monetary term)
 Continuous activity
 Risk/Uncertainty

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Dimension of business definition

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Business Model

• Business Model can be defined as a representation of a firm’s underlying core logic and strategic choices for creating and capturing
value within a value network.

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Objectives
Objectives or Goals are the end towards which
activity is aimed.
Sometimes Objectives and Goals are
interchangeable.
They are the ends toward which effort and action
are directed or coordinated.
Although it is the aim or an end, it is not necessarily
the final achievement. That’s the mission.
Objectives and goals include whats, not hows, but
they are smaller than a mission.
There can be a number of objectives and goals to
be achieved in order to achieve a mission, but
there is usually only one mission.

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http://www.hydratemarketing

Characteristics of Objectives
.com/blog/the-importance-
of-setting-smart-goals

SMART objective
George T Doran (1981)

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Difference between Goal & Objective
Goal Objective

Something that one's efforts or actions are


The purpose toward which an
Meaning intended to attain or accomplish; purpose;
endeavor/effort is directed.
target.

I want to achieve success in the field


I want to complete my thesis on genetic
Example of genetic research and do what no one
research by the end of December 2018.
has ever done.

Action Generic action Specific action

Goals may not be strictly measurable or


Measure Must be measurable and tangible.
tangible.

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Time frame Longer term Mid to short term
Goals and Objectives

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WHAT OBJECTIVES?

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Balanced Scorecard Approach to Objective Setting

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Balanced Scorecard Approach to Objective Setting

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• http://balancedscorecard.org/Resources/About-the-Balanced-Scorecard

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Strategy Map

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Critical Success Factor

• Concept of “Success Factor” – D. Ronal Daniel of McKinsey & Company


• Refined to “Critical Success Factor” between 1979-1981- John F Rockart

• KPI=number of new customers.( measurable, quantifiable)


• CSF= installation of a call center for providing superior customer service

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Critical Success Factor

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KEY PERFORMANCE INDICATORS

• Vision- “to be the most profitable • Pre tax profit,EBIDTA,shareholder


company in ur industry” equity
• Shoe manufacturing _CSF_High
quality/Cost Efficiency
• KPI-Metrics or measures
• KPI-recall rate after
delivery/product rejection rate/on
time delivery/number of compalians
etc.

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