BU381 Strategic Management Midterm || A+ Certified.
What are the 3 fundamental questions? correct answers What is our present situation?
What is the future mission of the firm and what goals do we need to set?
How do we get there?
What are the five basic strategies? Provide an example for each. correct answers Focused Low-
Cost - Spirit Airlines
Focused Differentiation - Ferrari
Broad Low-Cost - Walmart
Broad Differentiation - Apple
What are the six reasons strategy evolves over time? + proactive reactive correct answers
Changes in Market Conditions
Changes in Buyer Preferences
Competitors Moving
Emerging Market Opportunities
Change in Technology
New Ideas Internally For Improving the Strategy
- Ideas can be reactive or proactive, minus any abandoned strategies
What is the value-price-cost framework? correct answers The VPC framework is used to find the
firm's share and customer's share of value from a product.
Value: the utility that a customer gains from purchasing your product
Price: The price that customers pay for your product
Cost: The cost of production.
V - P is the customers share, P - C is the firm's share (profit)
What are the 3 tests to a winning strategy? correct answers 1. The Fit Test: Does the strategy fit
the dynamic internal and external environment of your firm?
2. The Competitive Advantage Test: Does the strategy provide a sustainable competitive
advantage?
3. The Performance Test: Does the strategy provide superior profitability, market standing, and
competitiveness?
What are the 5 steps to strategy? correct answers Developing mission, vision, and core values
Setting Objectives
Planning Strategy
Executing Strategy
Evaluate Performance
What constitutes a good strategic vision? correct answers Language used is differentiating
Tells shareholders what you want the company to become
, Answers the question "Where we're going"
Explains why this strategic path makes good sense
What constitutes a good mission statement? correct answers Language used is differentiating
Answers the question who we are, what we do, why we're doing it
Focuses on what's your business, not objectives
Why are core values important, what are they? How does it connect to MS and SV? correct
answers Core values are the heartbeat of an organization and drives the values, attitudes and
behaviors that employees bring to carry out your strategy.
The core values connect to MS and SV by supporting it.
What is the purpose of setting objectives? correct answers To transfer the firm's mission and
vision into measurable, challenging, and specific outcomes.
What 4 characteristics does a well-stated objective have? correct answers Challenging
Specific
Measurable
Time-constrained
What is a stretch objective? What are the advantages and disadvantages to it? correct answers A
stretch objective is one that is challenging and pushes employees beyond their capabilities to
achieve success.
The advantages are that it drives innovation, creates a more exciting work environment, and
attracts top talent.
The disadvantages are that if too ambitious it can kill motivation, performance, and confidence.
What are the two types of objectives that we set? What do they entail? correct answers Financial
Objectives and Strategic Objectives
Financial is internally focused on financial performance
Strategic is externally focused on market standing.
What are the 4 components of a balanced scorecard? correct answers Customer
Financial
Organizational Structure
Internal Processes
Why is it important to set strategic goals at every level? correct answers 1. It breaks down a
broad strategy into smaller parts.
2. It fosters an environment of setting performance targets based on overarching firm goals
3. It extends the objective setting process to every level of employee.
What are the 3 fundamental questions? correct answers What is our present situation?
What is the future mission of the firm and what goals do we need to set?
How do we get there?
What are the five basic strategies? Provide an example for each. correct answers Focused Low-
Cost - Spirit Airlines
Focused Differentiation - Ferrari
Broad Low-Cost - Walmart
Broad Differentiation - Apple
What are the six reasons strategy evolves over time? + proactive reactive correct answers
Changes in Market Conditions
Changes in Buyer Preferences
Competitors Moving
Emerging Market Opportunities
Change in Technology
New Ideas Internally For Improving the Strategy
- Ideas can be reactive or proactive, minus any abandoned strategies
What is the value-price-cost framework? correct answers The VPC framework is used to find the
firm's share and customer's share of value from a product.
Value: the utility that a customer gains from purchasing your product
Price: The price that customers pay for your product
Cost: The cost of production.
V - P is the customers share, P - C is the firm's share (profit)
What are the 3 tests to a winning strategy? correct answers 1. The Fit Test: Does the strategy fit
the dynamic internal and external environment of your firm?
2. The Competitive Advantage Test: Does the strategy provide a sustainable competitive
advantage?
3. The Performance Test: Does the strategy provide superior profitability, market standing, and
competitiveness?
What are the 5 steps to strategy? correct answers Developing mission, vision, and core values
Setting Objectives
Planning Strategy
Executing Strategy
Evaluate Performance
What constitutes a good strategic vision? correct answers Language used is differentiating
Tells shareholders what you want the company to become
, Answers the question "Where we're going"
Explains why this strategic path makes good sense
What constitutes a good mission statement? correct answers Language used is differentiating
Answers the question who we are, what we do, why we're doing it
Focuses on what's your business, not objectives
Why are core values important, what are they? How does it connect to MS and SV? correct
answers Core values are the heartbeat of an organization and drives the values, attitudes and
behaviors that employees bring to carry out your strategy.
The core values connect to MS and SV by supporting it.
What is the purpose of setting objectives? correct answers To transfer the firm's mission and
vision into measurable, challenging, and specific outcomes.
What 4 characteristics does a well-stated objective have? correct answers Challenging
Specific
Measurable
Time-constrained
What is a stretch objective? What are the advantages and disadvantages to it? correct answers A
stretch objective is one that is challenging and pushes employees beyond their capabilities to
achieve success.
The advantages are that it drives innovation, creates a more exciting work environment, and
attracts top talent.
The disadvantages are that if too ambitious it can kill motivation, performance, and confidence.
What are the two types of objectives that we set? What do they entail? correct answers Financial
Objectives and Strategic Objectives
Financial is internally focused on financial performance
Strategic is externally focused on market standing.
What are the 4 components of a balanced scorecard? correct answers Customer
Financial
Organizational Structure
Internal Processes
Why is it important to set strategic goals at every level? correct answers 1. It breaks down a
broad strategy into smaller parts.
2. It fosters an environment of setting performance targets based on overarching firm goals
3. It extends the objective setting process to every level of employee.
