Strategic Management Master Quiz: Concepts, Frameworks & The Strategic Process Explained

What is the Strategic Management Process?

It’s the step-by-step method that companies use to create, choose, apply, and monitor a strategy that helps them stay competitive and successful.

What is the first step in the Strategic Management Process?
👉 Mission

This is the company’s long-term purpose. It explains why the company exists and guides the behavior of everyone in the organization.
📝 Example: “We aim to deliver affordable, high-quality food while improving community health.”

What is the second step?
👉 Objectives

These are specific, measurable goals that help the company know if it’s moving in the right direction. They turn the mission into clear targets.
📝 Example: “Increase customer retention by 15% within one year.”

What comes after setting objectives?
👉 External and Internal Analysis

This step happens more or less at the same time and helps you understand your situation.

What is External Analysis?

It means looking outside the company to identify:
Opportunities (e.g., new markets, rising trends)
Threats (e.g., new competitors, changing laws)
📌 It also helps predict how the market or competitors may evolve.

What is Internal Analysis?

It means looking inside the company to identify:
Strengths (e.g., strong brand, skilled team)
Weaknesses (e.g., poor logistics, outdated tech)
📌 This helps the company understand what it can build on and what needs fixing.

What’s next after analyzing?
👉 Strategic Choices

Now the company decides how to compete.
There are two types:
Business-Level Strategy:
How to gain an advantage in one industry or market.
🧠 Examples: cost leadership, differentiation
Corporate-Level Strategy:
How to compete in multiple industries or markets at the same time.
🧠 Examples: diversification, vertical integration, strategic alliances

What follows strategic choice?
👉 Strategy Implementation

This is about putting the strategy into action using the right structure, processes, and people.
It includes:
Organizational structure (how teams are organized)
Management systems (controls, decision-making)
HR policies (rewards, roles, hiring)
📌 A good strategy needs good execution.

What is the final step?

Achieving Competitive Advantage
If the strategy is right and well-executed, the company will create more economic value than rivals. This leads to:

• Competitive advantage (short-term or long-term)

• Stronger market position

• Better profits or customer loyalty

• Sustainable growth in the marketplace.

What is strategy, in simple words?

Strategy is a clear set of connected choices that help a company stand out from others, win in its market, and stay successful over time.

What are the 5 key choices every good strategy includes?

1. Winning aspiration – What is our goal? Why do we exist?

2. Where to play – Which market, customer group, or region will we focus on?

3. How to win – What makes us better than competitors?

4. What capabilities must be in place – What do we need to be great at to win?

5. What management systems are required – What tools, processes, and rules help us stay on track?
   

   All five parts need to work together.

Why did the teacher talk about Pokémon Go?

Because it’s a real example of how strong strategy, partnerships, and branding can lead to big success.

Why is every strategy a theory?

Because no one knows for sure what will happen in the future. Strategy is always a smart guess based on what you expect to work.

What is the Strategic Management Process?

It’s the full journey of making and applying a strategy. It includes:

Purpose (mission)

Goals (objectives)

Analysis (looking inside and outside)

Choices (what to do)

Actions (how to do it)

Results (competitive advantage)

What does ‘economic value’ mean?

It’s the difference between how much customers are willing to pay and how much it costs you to make the product.

How can a company create competitive advantage?

By either offering more value than others or by keeping costs lower than competitors.

What types of competitive advantage are there?

Temporary: You’re ahead, but only for a short time

Sustained: You stay ahead for a long time

Parity: You’re just as good as your rivals

Disadvantage: You’re doing worse than your rivals

What is a prescriptive strategy?

A strategy that is planned in advance, with clear goals and steps from the beginning.

What is an emergent strategy?

A strategy that develops over time, as the company learns what works best in real life.

What are management systems in strategy?

They are tools and processes—like structure, performance tracking, or rewards—that help the company stay aligned with its goals.

What is a mission statement?

It’s a short sentence that explains what the company stands for and what it’s trying to do in the long run.

What is a strategy cascade?

It’s how each strategic choice supports the next—from purpose, to market, to strengths, to systems. If one part is weak, the whole strategy can fall apart.

What is external analysis?

It’s when a company looks at outside factors like competition, trends, or risks.

What is internal analysis?

It’s when a company looks at itself—its strengths, weaknesses, and resources.

What is the final step?

Achieving Competitive Advantage

If the strategy is right and well-executed, the company will create more economic value than rivals. This leads to:

• Competitive advantage (short-term or long-term)
• Stronger market position
• Better profits or customer loyalty
• Sustainable growth in the marketplace.