What should strategic initiatives express for the best strategic fit?
They should combine clear long-term goals, capability appraisal, implementation, competitive understanding, key success factors, strategy decisions, challenges, and initiatives.
What does the level of ambition translate in a company?
It translates the company's long-term vision and mission into measurable values and KPIs.
Why should an organisation define measurable metrics and goals for its vision and mission?
Because numbers provide a common destination while words are interpretable.
What is a vision according to Collins and Porras (1996)?
A vivid statement describing the future state an organisation hopes to become.
What does a mission describe in a company?
The core purpose or reason for its existence.
What are organisational values?
Fundamental guiding principles that help employees make decisions and unify culture.
What did Sony's 1950 vision describe?
Becoming a globally recognised Japanese brand linked to innovation and quality.
What innovation helped Sony succeed in the United States according to its 1950 vision?
The transistor radio.
Whose vision was to put a man on the moon before the decade ended?
President John F. Kennedy's vision.
What does the PESTEL framework categorise?
Environmental influences into political, economic, social, technological, environmental, and legal factors.
Which factors are included in political influences?
Government policies, taxation changes, foreign trade regulations, political risk in foreign markets, and trade block changes.
Name three economic factors affecting businesses.
Business cycles, interest rates, and personal disposable income.
What social factors are considered in external environment analysis?
Population and lifestyle changes.
Which technological factors are included in external environment analysis?
Technological developments.
What environmental factors are analysed externally?
Environmental protection and waste rules.
Which legal factors affect external environment analysis?
Competition, health and safety, employment, licensing, and intellectual-property laws.
What is a scenario in organisational planning?
A detailed and plausible view of future environmental development based on uncertain key drivers.
What is the first step in scenario building?
Identifying drivers of change.
What should organisations develop when uncertainty is high?
Two to four alternative scenarios to stress-test strategic options.
What defines a strategic group within an industry?
Organisations with similar strategic characteristics, strategies, and competition bases.
What is a market segment?
A group of customers with similar needs differing from others in the market.
Which step follows selecting opposing drivers in scenario building?
Developing scenario stories.
What is the final step in scenario building?
Analysing the impacts of scenario stories.
What do strategic capabilities consist of?
Resources and competences that allow a firm to compete and create value.
What types can strategic capabilities be?
Strengths, threshold capabilities, or weaknesses.
When is a distinctive capability a source of competitive advantage?
When it is valuable, rare, difficult to imitate, and non-substitutable.
What can cause difficult imitation of capabilities?
Complexity, causal ambiguity, culture and history, and frequent innovation.
What defines a strategic business unit's domain?
A distinct domain identified by similar customers, channels, competitors, or capabilities.
What does competitive strategy focus on for a business unit?
How it achieves competitive advantage in its domain.
What is the goal of cost leadership?
To become the lowest-cost organisation in a domain.
What does differentiation involve?
Uniqueness valued enough by customers to allow a price premium.
What does a focus strategy target?
A narrow segment or domain tailored exclusively.
What is strategic lock-in in supplier relationships?
Users depend on a supplier and face high switching costs.
How can lock-in be achieved in a market?
By controlling complementary products or creating proprietary standards.
What does hypercompetition require according to Richard D’Aveni?
Fast decisions, small moves, unpredictability, and misleading competitors.
Which author defined hypercompetition in 1994?
Richard D’Aveni in Hypercompetition: Managing the Dynamics of Strategic Manoeuvring.
How can cooperation strengthen competitive advantage?
By increasing power, standardisation, lowering costs, reducing threats, and coordinating retaliation.
How do strategic initiatives differ from continuous improvement initiatives?
Strategic initiatives use dedicated teams and budgets, continuous improvement uses existing ones.
What is a core challenge in strategic planning?
A minimum challenge that must be overcome to reach the ambition level.
How does management develop core challenges?
By linking external opportunities and threats with internal strengths and weaknesses.
How are core challenges stated by management?
As questions with a clear From-to direction.
What is an OKR in goal-setting?
A system creating alignment and engagement around measurable, ambitious objectives and key results.
What is the usual timeframe to achieve an objective?
One quarter or three months.
How are OKRs cascaded within an organization?
From company to department, team, and individual levels, accessible to all staff.
Who communicates company OKRs at the year's start?
The executive board.
When are monthly progress evaluations done for OKRs?
During the year after departments define their OKRs.
What happens during quarterly reviews of OKRs?
New OKRs are defined.
What are the four strategic initiative levers?
Growth, business efficiency, people, and organisation.
Which growth lever involves selling to new customers?
Gaining new customers.
Which growth lever involves using different sales methods?
Using new channels.
What do business efficiency levers aim to do?
Streamline operations and minimise costs.
How do business efficiency levers achieve cost minimisation?
By eliminating, modifying, or reevaluating processes and activities.
What is the purpose of people levers?
To optimise the value and contribution of human capital.
How do people levers secure future talent?
By securing future talent, improving existing talent, and strengthening company culture.
Which levers strengthen company culture?
People levers.
What does Blue Ocean strategy seek in market space?
A new market space where competition is minimised.
How does Red Ocean strategy compete in markets?
By competing in existing markets and beating competitors.
What does Blue Ocean strategy do to competition?
It makes competition irrelevant.
What do the four Blue Ocean questions ask about industry factors?
Which factors to eliminate, reduce, raise, or create.
Who introduced the four Blue Ocean questions?
Kim & Mauborgne.
What does a business model describe?
How an organisation creates, delivers, and captures value.
How many building blocks does the Business Model Canvas have?
Nine building blocks.
What does innovation involve?
Converting knowledge into a new product, process, or service and using it.
What approach should strategists adopt for innovation types?
A situational approach.
Name one supply-side factor influencing the diffusion S-curve.
Improvement.
Name one demand-side factor influencing the diffusion S-curve.
Market awareness.
What can cause first-mover advantage?
Experience.
What does a fast-second posture depend on?
Profit capture, complementary assets, and fast-moving arenas.
Test your knowledge with 31 questions on Business Strategy Knowledge Map.
1. What does the level of ambition add to an organisation’s long-term vision and mission?
2. Why should an organisation define measurable metrics and associated goals for its vision and mission?
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