what is strategy and strategic management?

explain the benefits of strategic

management. (6 marks)

Definition of Strategy and Strategic Management

1. Strategy : Strategy is a long-term plan that organizations develop to

achieve competitive advantage and organizational goals. It involves
making key decisions on resource allocation, market positioning, and
business operations. According to Thompson & Strickland, strategy is "a
coordinated set of actions managers take to outperform competitors and
achieve superior profitability."

2. Strategic Management: Strategic management is the process of

formulating, implementing, and evaluating strategies to achieve
business success. It involves analyzing the external and internal
environment, setting objectives, and making strategic decisions to
sustain growth and profitability.

Benefits of Strategic Management

1. Provides Direction and Focus

o Helps businesses define their vision, mission, and long-term goals.
o Aligns employees and management towards a common objective.
2. Enhances Competitive Advantage
o Enables organizations to identify opportunities and threats in the
market.
o Helps develop unique strengths to outperform competitors.
3. Improves Decision-Making
o Provides a structured approach to analyzing market trends and
business risks.
o Encourages proactive rather than reactive decision-making.
4. Boosts Organizational Efficiency
o Ensures optimal resource allocation and process improvements.
o Reduces wastage and enhances productivity.
5. Facilitates Adaptability to Change
o Helps organizations respond to changing market conditions and
customer needs.
 o Supports innovation and technological advancements.
6. Increases Profitability and Growth
o Leads to better financial performance by maximizing market
opportunities.
o Encourages sustainable growth and long-term success.

What is Strategy and How is it Different from Policy?

Definition of Strategy:
Strategy refers to a comprehensive plan formulated by an organization to achieve
its long-term goals and competitive advantage. It involves making critical
decisions about resource allocation, market positioning, and business operations to
ensure sustainable success. According to Thompson & Strickland, strategy is "the
coordinated set of actions that managers take to outperform competitors and
achieve superior profitability."

Definition of Policy:
A policy is a set of guiding principles or rules established by an organization to
govern decision-making and ensure consistency in operations. Policies help in
implementing strategies by providing a structured framework for decision-making
at various levels of the organization.

Differences Between Strategy and Policy:

Basis Strategy Policy

A long-term plan to achieve A set of guidelines for
Definition competitive advantage and decision-making within an
organizational goals. organization.
Future-oriented, focusing on Focuses on consistency in
Focus competitive positioning and decision-making and internal
resource allocation. operations.
Narrower and specific to
Broad and dynamic, affecting the
Scope certain functions or
entire organization.
departments.
Relatively stable, providing a
More flexible and subject to
Flexibility fixed framework for
change based on external factors.
operations.
Implementation Executed through specific actions Provides rules and principles
 Basis Strategy Policy
and initiatives. to guide those actions.

While both strategy and policy are essential for organizational success, strategy
focuses on long-term competitive advantage, whereas policy provides the rules and
framework to ensure consistency in decision-making.

Define and explain the process of strategic management? 6 marks

Definition of Strategic Management

Strategic management is the process of formulating, implementing, and evaluating

strategies to achieve an organization's long-term goals and competitive advantage.
It involves analyzing internal and external environments, setting objectives, and
making decisions to ensure business success.

Process of Strategic Management

The strategic management process is a systematic approach that organizations use

to define their direction, allocate resources, and implement actions to achieve long-
term goals. According to Thompson & Strickland and Hill & Jones, the strategic
management process consists of the following key steps:

1. Strategic Analysis (Situation Analysis)

 This step involves analyzing both the external environment (opportunities

and threats) and the internal environment (strengths and weaknesses).
 Tools such as SWOT Analysis, PESTEL Analysis, Porter’s Five Forces
Model, and VRIO Framework are commonly used.
 The goal is to understand the market dynamics, industry trends, and the
company’s competitive position.

2. Strategy Formulation

 Based on the analysis, the organization develops a strategic vision, mission,

and long-term objectives.
 It involves choosing a suitable corporate strategy (growth, stability, or
retrenchment) and business-level strategies (cost leadership,
differentiation, or focus).
 Organizations may also define functional-level strategies (marketing,
operations, finance, etc.) to support business goals.
3. Strategy Implementation

 In this phase, the formulated strategies are put into action through effective
resource allocation, leadership, and organizational structure.
 It involves designing policies, budgets, and procedures to ensure successful
execution.
 Key aspects include:
o Organizational structure alignment
o Leadership and corporate culture
o Change management and communication
o Performance measurement and monitoring

4. Strategy Evaluation and Control

 This step ensures that the implemented strategies are achieving the desired
objectives.
 Performance metrics, KPIs, and financial analysis are used to assess
effectiveness.
 If there are deviations from the expected results, corrective actions are taken
to adjust the strategy.

what are the elements of the strategic management process? how are they
interrelated(8 marks)

Elements of the Strategic Management Process (8 Marks)

The strategic management process is a comprehensive and systematic approach

that organizations follow to formulate, implement, and evaluate strategies that
achieve their long-term objectives. The process is typically divided into the
following key elements:

1. Environmental Scanning

This is the first step where organizations gather, analyze, and interpret
information about external opportunities, threats, and internal strengths and
weaknesses. The goal is to understand the competitive landscape and internal
capabilities. Environmental scanning includes:
  External Analysis: Identifying opportunities and threats in the external
environment (e.g., market trends, competition, political, economic,
technological factors) using tools like PESTEL analysis and Porter's Five
Forces.
 Internal Analysis: Assessing internal resources, capabilities, and
performance to identify strengths and weaknesses through tools like SWOT
analysis and VRIO analysis.

2. Strategy Formulation

After analyzing the environment, organizations develop strategies that are best
suited to achieve their goals and capitalize on opportunities. Strategy formulation
involves:

 Setting a vision, mission, and objectives.

 Deciding on business-level strategies (e.g., cost leadership, differentiation,
focus).
 Formulating corporate-level strategies (e.g., growth, stability,
retrenchment).
 Deciding on functional-level strategies for different departments (e.g.,
marketing, finance, operations).

3. Strategy Implementation

Once strategies are formulated, they need to be executed. This is where an

organization takes action to make the strategies a reality. Key components of
strategy implementation include:

 Resource Allocation: Ensuring that adequate resources (financial, human,

and physical) are allocated to support the strategy.
 Organizational Structure: Aligning the company's structure and culture to
support the strategy.
 Leadership and Decision-Making: Managers and leaders play a crucial role
in motivating employees, guiding the team, and making timely decisions.
 Action Plans: Developing detailed action plans that outline the tasks,
timelines, and responsibilities for implementing the strategy.
4. Strategy Evaluation and Control

The final step in the process involves assessing the performance of the
implemented strategy. It is important to measure if the strategic objectives are
being met and if the organization is on track to achieve its goals. This phase
includes:

 Monitoring Performance: Using key performance indicators (KPIs),

financial reports, and customer feedback to evaluate success.
 Corrective Actions: If the strategy isn’t working as planned, corrective
actions are taken to adjust the strategy or implementation plans.
 Strategic Review: Regular reviews of strategy in light of changing market
conditions, competition, and internal performance.

How the Elements are Interrelated

The elements of the strategic management process are interrelated and form a
continuous cycle. Here's how:

1. Environmental Scanning provides the foundation for strategy formulation

by identifying external opportunities and threats, as well as internal
strengths and weaknesses. The insights gained here directly influence the
strategic choices made.
2. Strategy Formulation uses the insights from the scanning process to define
goals and select appropriate strategies. The strategies then need to be
formulated in a way that can be implemented effectively within the
company’s capabilities.
3. Strategy Implementation requires that the strategy is translated into
specific actions, resources are allocated, and the company structure is
aligned with the strategy. Effective implementation relies on the clarity of
the strategy and the accuracy of the insights from the scanning and
formulation phases.
4. Strategy Evaluation and Control provides feedback on the implementation
process, identifying any discrepancies between planned and actual
performance. This evaluation may lead to a need for reformulation of
strategy or adjustments in implementation. Hence, evaluation often leads
back to re-scanning and refining the strategy.
 5. Continuous Feedback Loop: The entire process is iterative. After strategy
evaluation, adjustments made based on feedback may lead to a revisit of
environmental scanning, strategy formulation, and further implementation
refinement.

what is value chain of a company? discuss the value chain activities of a

manufacturing organization. 6 marks

Value Chain of a Company

The value chain is a concept introduced by Michael Porter that describes the full
range of activities a company performs to create value for its customers. It helps
identify key processes that contribute to cost advantages and differentiation.

The value chain consists of primary activities (directly involved in production and
delivery) and support activities (that assist in efficient operations).

Value Chain Activities of a Manufacturing Organization

1. Primary Activities (Directly Add Value to Products)

1. Inbound Logistics
o Involves sourcing, receiving, and storing raw materials.
o Efficient supplier relationships and inventory management improve
cost efficiency.
2. Operations
o The process of converting raw materials into finished goods.
o Includes manufacturing, assembly, quality control, and packaging.
o Efficient production systems enhance productivity and cost savings.
3. Outbound Logistics
o Involves storing and distributing the finished goods to customers or
retailers.
o Efficient transportation, warehousing, and order fulfillment ensure
timely delivery.
4. Marketing & Sales
o Activities that promote and sell the product, such as advertising,
sales force management, and pricing strategies.
 o A strong brand and customer relationship management enhance
competitiveness.
5. Service
o Post-sale services like customer support, maintenance, and
warranties.
o Ensures customer satisfaction and brand loyalty.

2. Support Activities (Enhance Efficiency of Primary Activities)

1. Firm Infrastructure
o Includes company management, finance, legal, and strategic
planning.
o Supports overall business operations.
2. Human Resource Management
o Hiring, training, and employee development.
o Skilled employees improve production efficiency and innovation.
3. Technology Development
o Involves research, product design, automation, and process
improvements.
o Enhances product quality and operational efficiency.
4. Procurement
o Sourcing of raw materials, machinery, and equipment.
o Strong supplier relationships reduce costs and improve quality.

A manufacturing organization’s value chain includes both primary and support

activities that work together to create value for customers. By optimizing these
activities, a company can improve efficiency, reduce costs, and achieve
competitive advantage.

what is core competency? explain with an example ( 5 mark)

Core Competency: Definition

A core competency is a unique capability or advantage that gives a company a

competitive edge in the market. It is a combination of skills, knowledge, and
resources that are difficult for competitors to imitate. According to Hamel and
Prahalad, core competencies must meet three criteria:
 1. Provide significant value to customers
2. Be unique and difficult to imitate
3. Be applicable across multiple markets and products

Example of Core Competency

 Apple’s Innovation and Design: Apple’s ability to integrate cutting-edge

technology with stylish, user-friendly designs is a core competency that
differentiates its products in the competitive tech market.
 Toyota’s Lean Manufacturing System: Toyota’s mastery in lean production,
which focuses on efficiency, minimizing waste, and improving quality, gives
it a significant advantage in the automotive industry.

define and explain the concept of competitive advantage. what are the sources
of competitive advantages at a business organization? (5 marks in the exam))

Definition and Concept of Competitive Advantage : Competitive advantage

refers to the unique strengths and capabilities that enable a business to outperform
its rivals and achieve superior market positioning. It allows a company to provide
greater value to customers, either through lower costs or differentiated products
and services. Michael Porter describes competitive advantage as the ability to
sustain superior performance compared to competitors.

Sources of Competitive Advantage in a Business Organization

1. Cost Leadership
o Achieving lower production and operational costs compared to
competitors.
o Examples: Economies of scale, efficient supply chain management,
and process optimization.
 o Example: Walmart keeps prices low through bulk purchasing and
efficient logistics.
2. Differentiation
o Offering unique products or services with superior quality, features, or
branding.
o Creates customer loyalty and premium pricing potential.
o Example: Apple differentiates through innovation, design, and user
experience.
3. Innovation and Technology
o Developing new products, processes, or business models that disrupt
the market.
o Gaining an edge through research and development (R&D) and
proprietary technology.
o Example: Tesla’s electric vehicle technology and autonomous driving
capabilities.
4. Strong Brand and Customer Loyalty
o Building a recognizable and trusted brand that retains customers.
o Customer engagement and after-sales services enhance loyalty.
o Example: Coca-Cola’s strong brand identity and global recognition.
5. Human Resources and Organizational Culture
o A skilled workforce, leadership, and company culture contribute to
innovation and efficiency.
o Employee motivation and training drive long-term competitive
strength.
o Example: Google’s innovative work environment fosters creativity
and attracts top talent.

what is code of ethics? explain the core competency of business. (6 marks)

Code of Ethics (3 Marks) : A Code of Ethics is a set of formal principles and

guidelines that govern the conduct and decision-making of individuals within
an organization. It outlines the ethical standards expected from employees,
ensuring that the organization operates with integrity, fairness, and
responsibility. The code helps maintain trust, transparency, and
accountability in both internal operations and external relationships with
customers, suppliers, and other stakeholders.
Key Components of a Code of Ethics:

1. Integrity and Transparency: Encourages honesty and openness in all

business dealings.
2. Fair Treatment: Ensures employees, customers, and other stakeholders are
treated with dignity and respect.
3. Legal Compliance: Adherence to all applicable laws, regulations, and
industry standards.
4. Confidentiality: Protects sensitive information from being disclosed
without authorization.
5. Corporate Social Responsibility (CSR): Promotes ethical contributions to
society and the environment.

Benefits of a Code of Ethics:

 Promotes Trust: Strengthens relationships with customers, employees, and

partners.
 Reduces Legal Risk: Ensures compliance with laws and regulations,
reducing potential legal issues.
 Enhances Reputation: Builds a strong, ethical brand that attracts customers
and top talent.

Core Competency of Business (3 Marks) : A core competency is a unique

capability or strength that an organization possesses, giving it a competitive
advantage over its rivals. These competencies are typically difficult for
competitors to replicate and are central to an organization’s ability to deliver
value to customers. According to Hamel and Prahalad, core competencies
must meet three criteria: they must provide value to customers, be unique and
difficult to imitate, and be applicable across a wide range of products or
markets.

Characteristics of Core Competencies:

1. Customer Value: A core competency must help deliver superior value to

customers, enhancing their experience or satisfaction.
2. Uniqueness: The competency must be rare and hard to imitate by
competitors.
3. Versatility: It should be applicable to different markets or product lines,
offering flexibility for the organization.
Benefits of Core Competency:

 Sustainable Competitive Advantage: Helps the company maintain an edge

over competitors over the long term.
 Brand Loyalty: Strong core competencies enhance customer satisfaction,
leading to greater brand loyalty.
 Market Expansion: A core competency allows a business to diversify and
expand into new markets effectively.

define the terms vision, mission and objectives. explain with example. (5 marks)

Definition of Vision, Mission, and Objectives

1. Vision: A vision is a long-term, aspirational statement that describes

what an organization aims to achieve in the future. It provides direction
and inspiration for all stakeholders and outlines the ultimate goal of the
organization. A vision statement is typically broad and forward-thinking.

Example of Vision:

 Tesla: "To create the most compelling car company of the 21st century by
driving the world’s transition to electric vehicles."
 Tesla’s vision focuses on the long-term goal of transforming the automotive
industry to be more sustainable and environmentally friendly.

2. Mission: A mission is a statement that defines the current purpose of

the organization. It describes what the company does, whom it serves,
and how it does so. The mission statement is more focused on the
present and helps guide day-to-day operations and decision-making.

Example of Mission:

 Nike: "To bring inspiration and innovation to every athlete in the world."
 Nike’s mission highlights the company’s focus on providing products that
inspire and innovate for athletes, with an inclusive perspective that every
person is an athlete.
3. Objectives : Objectives are specific, measurable, achievable, relevant,
and time-bound goals that an organization sets to achieve its mission
and vision. These goals are typically short- to medium-term and help
guide actions toward fulfilling the mission and progressing toward the
vision.

Example of Objectives: Tesla: “To produce 500,000 electric cars by the end of
2025.”

 This objective is specific (number of cars), measurable, achievable, relevant

to Tesla’s mission and vision, and time-bound (by the end of 2025)..

suppose you are responsible in your company for dealing with the
environmental influences. make a list of the approaches that you would adopt
for dealing with the external influences on your business enterprise ( 8 marks)

Approaches to Dealing with External Influences on a Business Enterprise (8

Marks) : As a responsible individual in the company tasked with managing
external influences, it is essential to adopt a proactive approach to identify,
assess, and manage factors in the external environment that can impact the
business. The following are the key approaches I would adopt to effectively
deal with these external influences:

1. Conducting Regular Environmental Scanning (2 Marks): Environmental

scanning involves continuously monitoring the external environment to
identify emerging trends, opportunities, and threats. This is crucial for
adapting to market conditions and staying competitive.

 Tools and Techniques: Use tools such as PESTEL analysis (Political,

Economic, Social, Technological, Environmental, Legal factors) and Porter's
Five Forces to understand external factors influencing the business.
 Continuous Monitoring: Stay updated on market trends, government
regulations, technological changes, and shifts in customer preferences
through news, industry reports, and research.
2. Developing Strategic Alliances and Partnerships (1 Mark):
Collaborating with external stakeholders, such as suppliers, competitors,
and other organizations, can help mitigate risks and harness
opportunities.

 Joint Ventures: Form strategic alliances with companies in complementary

industries or markets to expand reach or share resources.
 Supplier and Customer Relationships: Build strong, long-term relationships
with key suppliers and customers to ensure stability and mutual growth.

3. Flexibility and Adaptability in Business Operations (1 Mark) : The ability

to adapt quickly to changes in the external environment is vital to staying
competitive.

 Agile Decision-Making: Create a flexible organizational culture that

encourages fast decision-making, allowing the company to quickly respond
to environmental shifts (e.g., economic downturn, market demand
fluctuations).
 Scenario Planning: Use scenario planning to anticipate various future
scenarios and develop strategies to address potential changes in the
market, political environment, or technology.

4. Engaging in Public Relations and Lobbying (1 Mark): Engaging with

government agencies, regulators, and the public can help shape external
influences that affect the business.

 Lobbying: Advocate for policies and regulations that benefit the company,
ensuring a favorable operating environment.
 Public Relations: Build and maintain a positive brand image through
effective communication with the media, public, and other stakeholders,
reducing the impact of negative external influences.
5. Analyzing Competitors (1 Mark) : Understanding competitors'
strategies and performance is critical for making informed decisions.

 Competitive Analysis: Regularly analyze competitors' actions, products,

pricing, and market positioning using tools like SWOT analysis to assess
their strengths and weaknesses.
 Benchmarking: Compare the company’s performance against industry
standards and best practices to identify areas for improvement and
competitive advantage.

6. Emphasizing Innovation and Technological Advancement (1 Mark) :

Technology and innovation are key drivers of change in most industries.
Embracing these can help mitigate external threats and capitalize on new
opportunities.

 Research and Development (R&D): Invest in R&D to develop innovative

products and services that meet changing customer needs.
 Technology Adoption: Leverage new technologies (e.g., automation,
artificial intelligence) to improve efficiency, customer experience, and
market competitiveness.

7. Monitoring Legal and Regulatory Changes (1 Mark) : Changes in laws

and regulations can significantly impact business operations. Staying
compliant with these regulations is crucial.

 Legal Advisors: Regularly consult with legal experts to ensure the business
complies with current and upcoming regulations, including environmental,
labor, and tax laws.
 Regulatory Forecasting: Keep an eye on potential regulatory changes and
proactively adjust business practices to comply with new laws.

what do you mean by mission? explain with an example.- 4 marks

Mission in strategic management refers to the organization's fundamental purpose

or reason for existence. It defines what the organization does, whom it serves,
and how it serves them. A mission statement guides employees, managers, and
stakeholders by clearly stating the organization's core purpose and direction.
🔹 Example: Company: Tesla Inc.
Mission Statement:
"To accelerate the world’s transition to sustainable energy."

This means Tesla exists to promote and provide sustainable energy solutions like
electric vehicles and solar energy products. It reflects Tesla’s purpose, the
customers it serves (those seeking eco-friendly solutions), and the means
(innovative technology).

So, a mission defines the present actions of a company and helps shape strategies
aligned with its goals and values.

Policy 1: Employee Training and Development Policy

This policy ensures that employees receive regular training to improve their
technical and soft skills. It aligns with the organization’s strategy of innovation and
service excellence by building a skilled and knowledgeable workforce capable of
executing complex tasks effectively.

Policy 2: Quality Assurance Policy

This policy enforces strict standards for product and service quality. It supports the
organization's strategy to gain competitive advantage through superior quality and
customer satisfaction. By maintaining high standards, the organization enhances
brand trust and market position.

How These Support Strategy Implementation:

1. Alignment with Strategic Goals: Both policies directly support key

strategic objectives such as operational excellence, innovation, and customer
satisfaction.
2. Improved Performance: Training boosts employee productivity, while
quality assurance ensures consistent output, making strategy execution more
effective.
3. Sustainability and Adaptability: These policies foster a culture of
continuous improvement and responsiveness to market demands, helping the
strategy stay relevant over time.
Identify two policies of your college or university where you are studying. Do
the policies provide support for the implementation of strategy?

Policy 1: Academic Integrity Policy

This policy promotes honesty, fairness, and responsibility in all academic
activities. It supports the university's strategic goal of providing high-quality
education by ensuring that students produce original work and maintain ethical
standards in learning and research.

Policy 2: Faculty Development Policy

This policy ensures continuous training, workshops, and research opportunities for
teachers. It directly supports the strategy of improving teaching quality and staying
updated with modern education trends and technologies.

How These Policies Support Strategy Implementation:

1. Quality Education: Academic integrity builds trust in the institution’s

degrees and enhances the academic reputation, which aligns with strategic
goals.
2. Skilled Faculty: Training and development help faculty deliver better
learning outcomes, supporting strategies related to student success and
curriculum excellence.
3. Institutional Excellence: Together, these policies create a professional and
ethical environment that supports long-term strategic goals like
accreditation, research growth, and global recognition.

What is a strategic plan and why does an organization prepare a strategic

plan? :

A strategic plan is a formal document that outlines an organization’s long-term

vision, goals, and the actions required to achieve them. It defines the direction,
priorities, and resources needed over a specific period, usually 3 to 5 years.

Organizations prepare a strategic plan for the following reasons:

1. Direction and Focus: It provides a clear roadmap for where the

organization is going and how it intends to get there.
2. Goal Alignment: It aligns the efforts of departments, teams, and individuals
with the overall objectives.
 3. Resource Allocation: It helps allocate time, money, and human resources
efficiently toward high-priority activities.
4. Performance Measurement: It sets benchmarks and performance
indicators to monitor progress and make adjustments when needed.
5. Adaptability: A strategic plan prepares the organization to respond to
external changes (e.g., market trends, technology, competition).
6. Decision Making: It supports better decision-making by setting clear
priorities and long-term outcomes.
7. Stakeholder Confidence: It builds trust with investors, employees, and
partners by showing a structured plan for growth and sustainability.

Choose a few business companies in your locality with which you are familiar,
and then examine their strategic management process.

In my locality, I am familiar with the following companies:

1. Aarong (Retail and Handicrafts)

Strategic Management Process:

 Mission & Vision: Aarong aims to empower rural artisans and promote
Bangladeshi heritage.
 Environmental Analysis: It regularly studies market trends, customer
preferences, and competitors like local boutiques.
 Strategy Formulation: Focuses on product diversification, digital
marketing, and outlet expansion.
 Implementation: Uses strong supply chains and skilled workers to ensure
quality and brand consistency.
 Evaluation: Monitors sales growth, customer feedback, and artisan
livelihoods to measure performance.

2. Bkash (Mobile Financial Services)

Strategic Management Process:

 Mission & Vision: To provide accessible financial services to the unbanked

population.
 Analysis: Assesses mobile penetration, regulations, and user demand.
 Strategy: Partners with banks and telecoms to expand mobile banking
reach.
  Implementation: Operates via a network of agents, mobile apps, and
customer service centers.
 Control & Feedback: Tracks transaction volume, app usage, and service
reliability to adjust strategies.

These companies follow key steps of strategic management—from goal setting to

evaluation—to remain competitive, satisfy customers, and achieve long-term
growth.

Is there any distinction between competitive strategy and functional strategy?

Explain.

Yes, competitive strategy and functional strategy differ in terms of their scope,
focus, and level of application within an organization.

🔹 Competitive Strategy

 It is developed at the business level.

 Focuses on how a company will compete in a particular industry or market.
 Deals with positioning the firm against competitors to gain a competitive
advantage.
 Examples: Cost leadership, differentiation, focus/niche strategies.

🔹 Functional Strategy

 Developed at the departmental or operational level (e.g., marketing,

finance, HR, production).
 Supports the competitive strategy by detailing how specific functions will
contribute.
 Focuses on efficient execution of broader strategies.

Key Differences:

Feature Competitive Strategy Functional Strategy

Level Business level Departmental/functional level
Focus Competing in the market Supporting internal operations
Goal Gain market advantage Effective strategy execution
Scope Broad, external-facing Narrow, internal-facing

Identify the various levels of strategy-making in an organization and then

briefly discuss their formulation.
An organization formulates strategies at four distinct levels: Corporate,
Business, Functional, and Operating. Each level plays a critical role in achieving
the organization’s overall goals.

🔹 1. Corporate-Level Strategy

 Scope: This is the highest level, formulated by top management or the board
of directors.
 Focus: Overall vision, mission, and direction of the organization.
 Formulation: Involves analyzing market opportunities, risks, and internal
capabilities to make decisions such as diversification, mergers, or global
expansion.
 Example: A company deciding to enter the international market or launch a
new line of business.

🔹 2. Business-Level Strategy

 Scope: Developed for individual business units or product lines.

 Focus: How the unit will compete in a particular market.
 Formulation: Focuses on competitive positioning (cost leadership,
differentiation, focus), using tools like SWOT and Porter’s Five Forces.
 Example: A clothing brand choosing to compete by offering eco-friendly
fashion.

🔹 3. Functional-Level Strategy

 Scope: Formulated by heads of departments like marketing, HR, or finance.

 Focus: Supporting the business-level strategy through departmental plans
and activities.
 Formulation: Involves planning operational tasks such as training,
marketing, budgeting, or production methods.
 Example: The marketing team launching a social media campaign to support
a differentiation strategy.

🔹 4. Operating-Level Strategy

 Scope: Developed at the lowest level by supervisors or team leaders.

 Focus: Execution of day-to-day tasks and short-term goals.
 Formulation: Focuses on specific procedures, schedules, and resource use
to carry out functional strategies.
  Example: A retail store manager organizing shift schedules and inventory
management.

What do you mean by vision? “A vision of a company describes the aspiration

for the future – a destination for the organization.” Do you support this view?
Why?

🔹 What is Vision? :

A vision is a forward-looking statement that defines what an organization wants to

achieve in the long run. It expresses the aspirations, purpose, and desired future
position of the company. It is a guiding image of what the organization aims to
become.

Explanation of the Statement :The statement — “A vision of a company

describes the aspiration for the future – a destination for the organization” — is
accurate. A vision provides a clear destination, inspiring and motivating all
members of the organization toward a common goal.

🔹 Do I Support This View? Yes.

Here’s Why:

1. Long-Term Direction:
A vision sets the long-term direction of the organization. It acts as a
compass, helping leaders make strategic decisions.
2. Motivation and Inspiration:
It inspires employees by giving them a sense of purpose and something
meaningful to work toward.
3. Strategic Alignment:
All strategies and actions can be aligned with the vision, ensuring
consistency and clarity across departments.
4. Stakeholder Confidence:
A well-communicated vision builds trust and confidence among investors,
customers, and partners.

🔹 Example: Unilever’s Vision:

"To make sustainable living commonplace."
This shows their future goal to embed sustainability into everyday life, guiding all
business practices and product development.
Why is the vision important for an organization?

A vision is important because it provides a clear and inspiring picture of what the
organization aims to become in the future. It serves as a foundation for decision-
making, strategy development, and organizational alignment.

🔹 Key Reasons:

1. Direction and Purpose:

Vision gives a sense of long-term direction, helping leaders and employees
stay focused on strategic goals.
2. Motivation and Inspiration:
It inspires employees by connecting their daily tasks to a larger purpose,
boosting morale and engagement.
3. Strategic Planning:
Vision acts as a starting point for setting goals and formulating strategies
aligned with future aspirations.
4. Organizational Unity:
A shared vision brings all departments and individuals together under a
common goal, promoting collaboration.
5. Stakeholder Confidence:
It builds trust with investors, customers, and partners by showing that the
organization has a clear future plan.

Point out the ideal contents of a mission statement.

An ideal mission statement defines the core purpose of an organization and

communicates its reason for existence. It should clearly state what the
organization does, whom it serves, and how it delivers value. The best mission
statements are clear, realistic, and motivating.

🔹 Ideal Contents of a Mission Statement:

1. Purpose of the Organization

o Clearly states why the organization exists.
Example: "To provide affordable healthcare to all."
2. Products or Services Offered
o Describes the key offerings of the organization.
Example: Education, software, food delivery, etc.
3. Target Customers or Market
 o Specifies who the organization aims to serve.
Example: Students, rural farmers, online shoppers.
4. Geographical Domain
o Indicates the location or market area served.
Example: Local, national, or international.
5. Core Values and Beliefs
o Reflects the guiding principles and ethical standards.
Example: Integrity, sustainability, innovation.
6. Technology or Competitive Advantage
o Highlights what makes the organization unique.
Example: "Using AI to enhance customer service."
7. Commitment to Stakeholders
o Addresses responsibility to employees, customers, and society.
Example: “We strive to improve community well-being.”

What is a SMART objective? Distinguish between strategic performance

objectives and financial performance objectives. Give examples of each.

🔹 What is a SMART Objective? : A SMART objective is a goal-setting

framework that ensures objectives are:

 Specific – Clearly defined

 Measurable – Quantifiable progress
 Achievable – Realistic and attainable
 Relevant – Aligned with broader goals
 Time-bound – Has a clear deadline

👉 Example: "Increase online sales by 15% within the next 6 months."

🔹 Distinction between Strategic and Financial Performance Objectives:

Financial Performance
Basis Strategic Performance Objectives
Objectives
Non-financial goals aimed at
Measurable financial goals
Definition improving market position, brand, or
related to revenue, profit, etc.
operations
Market share, customer satisfaction, Profitability, ROI, earnings
Focus Area
innovation growth
Nature Qualitative or competitive Quantitative
Time Often long-term Can be short or long-term
 Financial Performance
Basis Strategic Performance Objectives
Objectives
Horizon

🔹 Examples: Strategic Performance Objective:

"Expand into two new international markets by the end of next year."

Financial Performance Objective:

"Achieve a 12% return on investment (ROI) within the fiscal year."

What is an objective? Why should objectives be SMART?

🔹 What is an Objective?

An objective is a specific, measurable goal that an organization or individual aims

to achieve within a defined timeframe. Objectives help translate the organization’s
vision and mission into actionable targets and serve as a basis for planning,
decision-making, and performance evaluation. Example: “Increase customer base
by 10% within one year.”

🔹 Why Should Objectives Be SMART? : Using the SMART criteria ensures

that objectives are effective, realistic, and aligned with strategic priorities:

1. S – Specific:
Clearly states what is to be achieved.
Example: "Increase website traffic" is vague. "Increase website traffic by
20%" is specific.
2. M – Measurable:
Includes quantifiable indicators to track progress.
Example: Revenue, number of customers, % growth.
3. A – Achievable:
The goal should be realistic based on available resources and capabilities.
Unrealistic: "Double profits in one week."
4. R – Relevant:
Objectives should align with the organization's overall mission and goals.
Example: A bakery setting a goal to improve cake delivery speed.
5. T – Time-bound:
A clear deadline increases focus and urgency.
Example: "By the end of Q4 2025."

🔹 Benefits of SMART Objectives:

  Enhances focus and accountability
 Makes it easier to track performance
 Motivates teams through clear targets
 Ensures alignment across departments

Who perform the tasks of strategic management?

Strategic management involves planning, implementing, and evaluating strategies

to achieve long-term organizational goals. These tasks are performed by
individuals at different levels of management, each with specific roles and
responsibilities.

🔹 1. Top-Level Executives (Corporate Level)

 Who: CEO, Managing Director, Board of Directors

 Role:
o Set vision, mission, and overall strategic direction
o Make major decisions like mergers, acquisitions, or diversification
 Example: A CEO deciding to expand operations to international markets

🔹 2. Middle-Level Managers (Business Level)

 Who: Division heads, General Managers

 Role:
o Translate corporate strategy into business-level plans
o Focus on competitive strategy in specific markets or product lines
 Example: A marketing manager formulating a new market entry strategy for
a product

🔹 3. Functional Managers (Functional Level)

 Who: Department heads (HR, Finance, Marketing, Operations)

 Role:
o Develop functional strategies to support business-level goals
o Allocate departmental resources efficiently
 Example: HR head designing a talent development program aligned with
strategic goals

🔹 4. Operational Managers (Operating Level)

 Who: Supervisors, Team Leaders, Frontline Managers

 Role:
o Implement day-to-day tasks
o Ensure effective execution of strategies through workflows and
procedures
 Example: A store manager managing staff schedules and inventory to
support a customer service strategy