BDS ACA

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9 Terms

1
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What is the definition of strategy?

Strategy is the direction and scope of an organisation over the long term, which achieves advantage for the organisation through its configuration of resources within a changing environment, to meet the needs of the markets and to fulfil stakeholder expectations (Johnson, Scholes and Whittington)

2
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What are the 2 broad approaches to strategy?

  1. The rational planning (traditional approach)

  2. The emergent approach


3
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What is a strategic business unit?

A section within a larger business, which is responsible for planning, developing, producing and marketing its own products or services for a direct external market

4
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What are functional (operational) strategies?

The main functions within each SBU, such as production, purchasing, finance, human resources and marketing

5
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What are the 5 main stages in the rational approach model? (explain)

  1. Conduct a corporate appraisal: Assessing both the present business environment (& potential development), and the internal position of the business (such as staffing levels, product quality and financial position).

  1. Set mission and objectives: Management assess if long-term business goals are best met in its present industry or whether the business needs to strike out in a new direction.

  2. Gap analysis: Involves comparing forecast performance with management’s strategic objectives. If forecast performance is below objectives, this exposes a gap which must be filled by new and better strategy.

  3. Strategic choice: Management generate new business options for the firm, such as new products or markets, and evaluate to arrive at a set of potentially successful and affordable strategies.

  4. Strategy implementation: Management carries out the strategy at corporate, business and functional levels by developing organisational structures, policies and programmes to carry it out.


6
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What are the 5 main stages in the rational approach model? (just list stages)

  1. Conduct a corporate appraisal

  2. Set mission and objectives

  3. Gap analysis

  4. Strategic choice

  5. Strategy implementation


7
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What is the rational approach also known as?

  • Top-down approach

  • Formal approach

  • Traditional approach


8
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What is the emergent approach also known as?

  • Bottoms-up approach


9
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What are the benefits of strategic planning?