UNIT 6. Chapter 34. What is strategic management?

Question 1

Def. Corporate strategy

Answer 1

A long term plan of action for the whole organisation, designed to achieve a particular goal

Question 2

Def. Strategic management

Answer 2

The role of management when setting long term goal and implementing cross functional decisions that should enable a business to reach these goals.

Question 3

What is corporate strategy is influenced by? (4)

Answer 3

• Resources available
• Strengths of the business
• Competitive environment
• Objectives of the business

Question 4

What are the three key stages of strategic management?

Answer 4

• Strategic analysis
• Strategic choice
• Strategic implementation

Question 5

Differences between strategic decisions and tactical decisions?

Answer 5

Strategic decisions:
• e.g. develop new market abroad
• Long term
• Difficult to reverse once made because resources have been allocated
• Taken by directors and/or senior managers
• Cross functional - involve all departments
Tactical decisions:
• e.g. to sell product in different sized packaging
• Short term
• Reversible
• Taken by less senior managers
• Involves only 1 or 2 departments

Question 6

Corporate strategy and organisational structure - read business examples at pg 611.

Answer 6

Pg. 611

Question 7

How can the business strategy gain competitive advantage?

Answer 7

By trying to reduce costs and differentiating products.
Done by:
• Automation
• Rationalisation
• R&D