Summary Strategic Financial Management 2025
What is the difference between strategy and tactics?
A strategy is basically a long-term plan to achieve goals. It is a plan of action designed to achieve a
specific goal, or objectives (i.e., increasing market share, expanding into new markets, or beating the
competition). A strategy usually involves setting goals, analyzing the competitive environment, and
identifying internal and external factors that may affect the organization. It also involves making choices
about resource allocation and the types of activities the organization will engage in to achieve its
objectives. In general, a good business strategy should be specific, measurable, achievable, relevant, and
time-bound.
What are the learning objectives of the St. Gallen Management Model?
The learning objectives of the St. Gallen Management Model are to understand its holistic approach, the
balance between exploitation and exploration, and the long-term consequences of decisions. It also
aims to differentiate between strategy and tactics and understand the characteristics of a good business
strategy.
Understand the holistic approach of the St. Gallen Management Model
The St. Gallen Management Model is a framework for analyzing and making decisions about business
strategy. It takes a holistic approach, considering a wide range of factors that can impact a business,
including its external environment, internal resources and capabilities, and the specific goals and
objectives of the organization. The model encourages managers to think about the big picture and
to consider the long-term consequences of their decisions, rather than focusing solely on short-term
gains. It is based on the idea that effective strategy requires a balance between exploitation (maximizing
existing resources and capabilities) and exploration (identifying and developing new opportunities).
Know the definition of strategic management
Strategic Management is a set of managerial decisions and actions that determines the long-run
performance of a firm. It is a way how to reach predefined goals.
· Strategy in the sense of company policy - wider sense:
Pattern predefining the behavior of a given entity towards its environment. Every strategy consists of
goals and means for its implementation.
· Strategy in the sense of a company strategy - narrow sense:
Delimitation of the definition of means and measures with regard to implementing company policies.
What are the different hierarchical levels of strategies?
,Summary Strategic Financial Management 2025
The hierarchical levels of strategies include functional strategy, business strategy, and corporate
strategy. Functional strategy focuses on specific areas within an organization,
while business strategy relates to the positioning of a business segment in relation to competitors.
Corporate strategy involves determining the business areas a company wants to be in and leveraging
core competencies.
Why are business objectives important?
Business objectives are important because they help focus the organization's efforts and resources. They
provide a way to track progress and measure success. Clear and specific objectives also aid in strategic
planning and ensure alignment with the overall goals of the organization.
What are business objectives?
Business objectives are specific goals that an organization aims to achieve, which should be measurable,
specific, achievable, relevant, and time-bound. They align with the overall goals of the organization and
can be financial or related to other areas of the business.
Example:
increase its market share by 10% over the next year, or to enter a new market within the next two years.
Understand the meaning and content of the Vision
A vision is ike the dream of the owner. Vision answers the question: "What do we want to become?" -
deals with future
· Describing 5-20 years/ future in mind
· Dream big/ success
· In present tense
· The passion for what you do
· Where you're going/ Graphic mental picture
· Paragraph form
· Big and bold
· Connects with emotions
· Solving a problem that makes the world a better place
Understand the meaning and content of the Mission
A Mission statement is about why your business exists. It is about what a company wants to offer its
stakeholders and to what extent it plans to respond to their expectations and interests.
Mission answers the question: "What is our business?" - deals with the present
· Purpose/ reason for existence
· Shared expectations
· Why do you exist
· Directed at the market - communicates the public image
, Summary Strategic Financial Management 2025
o Who are we?
o What do we do?
o What do we aspire to?
corporate governance function - answer-developing an ownership and corporate governance system
that will ensure that managers act ethically and in the best interests of stakeholders
bird-in-the-hand-theory - answer-- investors consider the declaration of dividends as relevant
- prefer to receive dividends rather than reinvest
decisions regarding investment in the assets of the company - answer-the most appropriate level and
mixed of assets; also called as the investment decisions
growth prospects - answer-the financial requirement of the firm are directly related to anticipated
degree of asset expansion
market consideration - answer-based on the decision of stockholders
Without a mission statement, your business has no reason for existence and no plan.
Understand the meaning and content of the Values
Values of a company are guiding principles and rules, grounds for common understanding (world view).
Values have an influence on the corporate culture and shapes the companies internally and externally.
What are the components of a good objective?
A good objective should be measurable, specific, achievable, relevant, and time -bound. It should clearly
outline what is to be achieved and provide a timeframe for accomplishment. Additionally, it should align
with the overall goals of the organization.
Give an example of a business objective.
Increase market share by 10% over the next year.
How do objectives contribute to strategic planning?
Objectives contribute to strategic planning by providing a clear direction and purpose for the
organization. They help define what the organization wants to achieve and guide decision-making and
resource allocation towards the desired outcomes.
What is the difference between strategy and tactics?
A strategy is basically a long-term plan to achieve goals. It is a plan of action designed to achieve a
specific goal, or objectives (i.e., increasing market share, expanding into new markets, or beating the
competition). A strategy usually involves setting goals, analyzing the competitive environment, and
identifying internal and external factors that may affect the organization. It also involves making choices
about resource allocation and the types of activities the organization will engage in to achieve its
objectives. In general, a good business strategy should be specific, measurable, achievable, relevant, and
time-bound.
What are the learning objectives of the St. Gallen Management Model?
The learning objectives of the St. Gallen Management Model are to understand its holistic approach, the
balance between exploitation and exploration, and the long-term consequences of decisions. It also
aims to differentiate between strategy and tactics and understand the characteristics of a good business
strategy.
Understand the holistic approach of the St. Gallen Management Model
The St. Gallen Management Model is a framework for analyzing and making decisions about business
strategy. It takes a holistic approach, considering a wide range of factors that can impact a business,
including its external environment, internal resources and capabilities, and the specific goals and
objectives of the organization. The model encourages managers to think about the big picture and
to consider the long-term consequences of their decisions, rather than focusing solely on short-term
gains. It is based on the idea that effective strategy requires a balance between exploitation (maximizing
existing resources and capabilities) and exploration (identifying and developing new opportunities).
Know the definition of strategic management
Strategic Management is a set of managerial decisions and actions that determines the long-run
performance of a firm. It is a way how to reach predefined goals.
· Strategy in the sense of company policy - wider sense:
Pattern predefining the behavior of a given entity towards its environment. Every strategy consists of
goals and means for its implementation.
· Strategy in the sense of a company strategy - narrow sense:
Delimitation of the definition of means and measures with regard to implementing company policies.
What are the different hierarchical levels of strategies?
,Summary Strategic Financial Management 2025
The hierarchical levels of strategies include functional strategy, business strategy, and corporate
strategy. Functional strategy focuses on specific areas within an organization,
while business strategy relates to the positioning of a business segment in relation to competitors.
Corporate strategy involves determining the business areas a company wants to be in and leveraging
core competencies.
Why are business objectives important?
Business objectives are important because they help focus the organization's efforts and resources. They
provide a way to track progress and measure success. Clear and specific objectives also aid in strategic
planning and ensure alignment with the overall goals of the organization.
What are business objectives?
Business objectives are specific goals that an organization aims to achieve, which should be measurable,
specific, achievable, relevant, and time-bound. They align with the overall goals of the organization and
can be financial or related to other areas of the business.
Example:
increase its market share by 10% over the next year, or to enter a new market within the next two years.
Understand the meaning and content of the Vision
A vision is ike the dream of the owner. Vision answers the question: "What do we want to become?" -
deals with future
· Describing 5-20 years/ future in mind
· Dream big/ success
· In present tense
· The passion for what you do
· Where you're going/ Graphic mental picture
· Paragraph form
· Big and bold
· Connects with emotions
· Solving a problem that makes the world a better place
Understand the meaning and content of the Mission
A Mission statement is about why your business exists. It is about what a company wants to offer its
stakeholders and to what extent it plans to respond to their expectations and interests.
Mission answers the question: "What is our business?" - deals with the present
· Purpose/ reason for existence
· Shared expectations
· Why do you exist
· Directed at the market - communicates the public image
, Summary Strategic Financial Management 2025
o Who are we?
o What do we do?
o What do we aspire to?
corporate governance function - answer-developing an ownership and corporate governance system
that will ensure that managers act ethically and in the best interests of stakeholders
bird-in-the-hand-theory - answer-- investors consider the declaration of dividends as relevant
- prefer to receive dividends rather than reinvest
decisions regarding investment in the assets of the company - answer-the most appropriate level and
mixed of assets; also called as the investment decisions
growth prospects - answer-the financial requirement of the firm are directly related to anticipated
degree of asset expansion
market consideration - answer-based on the decision of stockholders
Without a mission statement, your business has no reason for existence and no plan.
Understand the meaning and content of the Values
Values of a company are guiding principles and rules, grounds for common understanding (world view).
Values have an influence on the corporate culture and shapes the companies internally and externally.
What are the components of a good objective?
A good objective should be measurable, specific, achievable, relevant, and time -bound. It should clearly
outline what is to be achieved and provide a timeframe for accomplishment. Additionally, it should align
with the overall goals of the organization.
Give an example of a business objective.
Increase market share by 10% over the next year.
How do objectives contribute to strategic planning?
Objectives contribute to strategic planning by providing a clear direction and purpose for the
organization. They help define what the organization wants to achieve and guide decision-making and
resource allocation towards the desired outcomes.
