[Solution] Strategy and Strategic Planning
Created at:
Author: Sarah Bennett
For an organization to meet its goals in an increasingly complex competitive environment, its managers must develop and implement sound strategies. Doing so aligns the organization with its environment and allows it to navigate opportunities and challenges.
Components of Strategy
An organization's strategy is a comprehensive plan that describes the set of alternatives from which an organization chooses as it seeks to achieve its goals. An effective strategy aligns the organization with its environment and positions it to achieve strategic goals. Strategic management is a thorough, ongoing process for developing and implementing strategies.
An effective strategy addresses three areas:
- A distinctive competence is something the organization does very well—better than its competitors. For example, if a technology company designs software with a better user interface (UI) than competing software, it has a distinctive competence in UI.
- The scope of an organization's strategy describes the types of markets in which the organization will compete. A company, for example, might choose to manufacture casual sports attire; manufacture sports equipment; or manufacture sports attire and equipment, and operate sports arenas. Those are all different scopes of strategy.
- Resource deployment is how the organization will allocate various resources across the businesses competing in different markets. A financial services company might choose to invest more in retirement planning, invest less in mortgage lending, and withdraw completely from brick-and-mortar retail banking.
Levels of Strategy
Business-Level Strategy
Concerns how the organization competes in a given industry or market
Corporate-Level Strategy
Identifies and prioritizes the industries and markets of interest for organizations active in multiple areas
Strategy Formulation and Implementation
Strategy development involves both formulation (planning) and implementation (execution). Strategies can be either deliberate (planned in advance) or emergent (developed in response to unexpected changes).
Select the terms that best complete the following sentences
Managers determine an organization's when they develop a comprehensive plan that describes the directions the organization may take to achieve its goals.
View Explanation
The comprehensive plan that describes various alternatives from which the organization will choose is the organization's strategy.
A distinctive competence is something the organization does well; a strategy will seek to exploit this strength. Resource deployment is how managers distribute resources to different businesses or markets; the strategy will guide resource deployment. The organization's mission is a statement of its purpose, premises, values, and directions.
Select the terms that best complete the following sentences.
When a strategy addresses the way in which an organization distributes money, people, and information to its different businesses, the strategy is guiding .
View Explanation
Decisions about how to allocate resources such as money, people, and information are decisions about resource deployment.
Distinctive competencies are what an organization is better at than its competitors. The scope of a strategy is the range of markets the organization will compete in. Strengths and weaknesses are uncovered through analysis prior to setting strategy in order to develop an effective strategy.
Select the correct response for the following question.
Sometimes the environment changes suddenly, and managers need to develop a strategy to achieve an unanticipated goal. What is this type of strategy called?
- Deliberate strategy
- Emergent strategy
View Explanation
Formulating and implementing an emergent strategy is necessary when goals change or a new goal unexpectedly arises. A deliberate strategy is used to achieve known goals.
