BA4301 Strategic Management - CIA I Q&A 2024

PART A – 10 X 2 Marks

1. Define strategy

The word “strategy” is derived from the Greek work “strategia”, which means
“generalship”.

Strategy is a long-term plan [corporate blueprint] that deliberately chooses a unique

set of activities [course of actions] to create superior value in terms of products and
services by effectively aligning resources and competencies to outperform
competitors, create market position, and achieve organizational goals.

2. Illustrate strategic management

Strategic management is an art & science of scanning the environment [both internal
and external environments], formulating, implementing, evaluating, and leveraging
cross-functional performance that enable an organization to capitalize on
opportunities and achieve its goals.

In the pursuit of their mission and vision, the top management chooses strategic
directions, setting clear goals, and effectively allocating resources in corporate-wide
activities to create financial fitness and sustainable competitive advantage.

3. State about the corporate governance

Corporate governance is the system of rules, practices, and duties that control and
direct a company. On behalf of the shareholders, the Boards of Directors take
responsibility to govern its organization and establish relationship with their
stakeholders, such as shareholders, employees, customers, and suppliers.

Good corporate governance promotes sustainability, ethical behaviour, and long-

term value for the company and its stakeholders.

4. What are the hierarchy of strategy?

Strategies often referred to three levels:

Corporate Level strategy, Business Level strategy, and Functional Level strategy.

However, for successful strategic implementation, all functions adapt respective

operation-level strategies.
5. Differentiate between strategic vision and business mission and values.

VISION: A strategic vision defines the firm's long-term goals, ideal future state,
customer needs to be satisfied, and core values that shape its culture, enhancing
employees' and stakeholders' sense of shared purpose.

MISSION: This defines a company’s purpose, the business a company operates in,
current business activities. Focuses on target customers, employees, products,
services, technology, market growth, profit etc.,

VALUES: Corporate values are the fundamental beliefs and guiding principles that
define how a company operates, makes decisions, and interacts with its
stakeholders. These values reflect on the organization's culture, ethics, integrity, and
innovation etc.,

6. Explain the competitive advantage.

Competitive advantage can be defined as the superiority that a company enjoys over
its competitors in an industry. Example: profitability and strategic market position.

This is achieved by creating superior value through its products, services, processes,
quality, competitive pricing, innovative solutions, functional capabilities [Eg: creative
marketing] etc.,

Sustainable competitive advantage is achieved when a firm maintains its competitive

advantage for a long time.
7. Mention the Porter’s Five Forces Model.

Porter's Five Forces is used to analysing the intensity of competitive environment in

an industry and determining its potential profitability. The diagram below illustrates
Porter’s five forces.

8. Describe environmental analysis.

Environmental analysis, also known as an environmental scan, is a strategic tool that

helps businesses to evaluate and understand the internal and external factors that can
impact organizational performance.

Further, Environment scanning is finally summarised in SWOT, where internal analysis

helps to understand the organization’s strengths and weaknesses of a company, and
external analysis helps to identify its opportunities and threats.

ENVIRONMENTAL SCANNING

INTERNAL ANALYSIS EXTERNAL ANALYSIS

Financial analysis & ratios MICRO MACRO

Vision, mission, and business goals Customers P - Political
Moral values & ethical principles Suppliers E - Economical
Leadership style Competitors S - Social
Managerial capabilities Market Intermediaries T - Technological
Employees' technical expertise Publics E - Environmental
Human Resource capital L - Legal
Physical resources
Technological integration
 Corporate Culture
Work environment
Corporate-wide processes
Corporate governance
Company reputation
Brand equity
R&D
Stakeholder analysis
Porter’s Value Chain model
GAP analysis
Portfolio analysis
SWOT

9. Mention the components of mission statements.

A well-crafted mission statement communicates the company’s reason for existence,

provides direction, motivates employees, and strengthens an organization’s
connection with its stakeholders.

The components of mission statement.

▪ Employees
▪ Products & services
▪ Customers
▪ Markets
▪ Survival, growth, & profit
▪ Philosophy
▪ Self-concept
▪ Technology
▪ Public image

10. Indicate the stages in an industry lifecycle.

There are five stages in an industry lifecycle analysed in two parameters: Time and
Demand [sales, growth, or industry output]
PART B – 5 X 13 Marks

11. Define strategy formulation. Discuss the steps involved in the strategy
formulation process.

Corporate

12. Classify the Corporate Governance. Explain the theories of corporate

governance.

Corporate

13. Explain Concept of Strategy and process of strategic management.

Corporate

14. Illustrate Porter’s Five Forces model for a business start-up.

Corporate

15. Discuss about the generic building blocks of competitive advantage.

Corporate
Strategic Management - CIA II Q&A
PART A – 10 X 2 Marks

1. What are the main characteristics of strategic thinking?

Strategic thinking in management involves focus on the following areas;

▪ Vision, foresight
▪ Long-term goals
▪ Superior value creation in terms of products and services
▪ Holistic [all-inclusive] view of the organization
▪ Opportunistic approach
▪ People-centricity
▪ Innovation driven
▪ Continuous learning
▪ Timely adaptation
▪ Acquiring unique resources and competencies
▪ Corporate-wide process improvement
▪ Technological advancement
▪ Open-mindedness
▪ Risk-taking
▪ Leadership philosophies & style
▪ Management effectiveness
▪ Strategic collaboration

2. List the significance of organizational development?

The ultimate goal of organizational development is creating superior value and

sustaining competitive advantage.

▪ Building superior value through products and services

▪ Leveraging strategic capabilities [Sales, Marketing, Finance, Ops, Logistics, HR]
▪ Driving creativity and innovation
▪ Nurturing skills & competencies
▪ Enhancing employment engagement
▪ Improving corporate-wide processes
▪ Adapting to change
▪ Continuous learning and growing
▪ Strengthening corporate culture
▪ Enhancing brand equity
▪ Developing competitive position

3. Mention the various strategies under Corporate Strategy?

There are five categories of strategies in corporate level.

▪ Concentration
- Market penetration
- Market development
- New product development
▪ Diversification
- Related diversification
- Unrelated diversification
▪ Integration
- Vertical integration [forward integration & backward integration]
- Horizontal integration
▪ Internationalization
- Multinational and world-wide operations
▪ Cooperation
- Merger & Acquisition
- Strategic alliance
- Joint venture
- Franchise
4. Distinguish vertical integration and horizontal integration.

Both vertical and horizontal integration are a part of corporate expand/growth

strategies.

In vertical integration, a company expands to control over different levels of its supply
chain. The goal is to improve efficiency, reduce dependency, and gain greater control
over quality and production costs.

The two types of vertical integration are forward integration and backward integration.

Forward integration: the supplier buying its customers.

E.g. Raymond textile manufacturer [supplier] started their own showrooms [retail
stores].
Backward integration is the customer buying the supplier.
E.g. A car company buying a steel manufacturer.

In horizontal integration, a company expands by acquiring or merging with other

companies in the same industry. This aims to increase market share, reduce
competition, and achieve economies of scale.

E.g. A milk company merging with a juice manufacturer.

5. Mention the elements / criteria used in GE portfolio matrix

The GE 9 CELL Matrix used to evaluate the portfolio in two criteria industry
attractiveness and business unit strength.

It helps companies allocate resources by assessing each business unit’s industry

attractiveness (E.g. Market growth, market size, low entry barrier) and business unit
strength. (E.g, Marketing capability, financial stability, great corporate culture, highly
skilled employees)

6. Define strategy implementation?

Strategic implementation can be defined as turning strategy into action for achieving
corporate goals.

Strategic implementation is about establishing excellent collaboration between

corporate, SBU, and functional leaders to develop appropriate structure, system, and
procedure to support the strategies. This includes creating policies, designing the
corporate-wide processes, deploying unique resources, and developing corporate
culture that enable to achieving competitive advantage.

7. Mention some barriers in strategy implementation?

The followings are the barriers of effective strategic implementation.

▪ Time horizon
▪ Risk consideration
▪ Bases of individual rewards
▪ Bases of group rewards
▪ Vision barrier
▪ Unclear or unrealistic goals
▪ Lack of resources
▪ Ineffective leadership
▪ Poor managerial capabilities
▪ Insufficient technical expertise
▪ Inadequate technology and/or support system
▪ Resistance from the employees, lack of skills
▪ Unsuccessful organizational structure
▪ Inefficient corporate communication
▪ Poor cross-functional collaboration

8. Explain the importance of resource allocation for the success of a strategy.

Resource allocation is a key, top management activity to effectively combine and

efficiently optimize organizational resources to achieve corporate goals and
competitive advantage.

▪ Followings are the successful steps in resource allocation

▪ Aligns resources with strategic goals
▪ Improve productivity and results [outcome]
▪ Helps take better decision to achieve competitive edge
▪ Increases project success rates
▪ Leverages stakeholders’ engagement [employees, distributors, customers]
▪ Maximizes ROI
▪ Nurtures creativity and innovation
▪ Supports R&D
9. List some measure for strategic evaluation and control.

The most critical aspect of strategic evaluation and control process is to measure the
output of the organization in terms of the set goals. These comprise both quantitative
as well as qualitative criteria.

QUANTITATIVE FACTORS

Financial Metrics: Revenue Growth Rate, Profit Margins, Return on Investment (ROI),
Return on Assets (ROA), Earnings Per Share (EPS):

Market Metrics: Market Share, Sales Volume, Customer Acquisition Cost (CAC)

Operational Efficiency Metrics: Productivity Ratios, Inventory Turnover, Cycle Time,

Capacity Utilization Rate

Employee Metrics: Turnover Rate, Training and Development Costs, Employee

Productivity

Project Management Metrics: Budget Adherence, Project Completion Rate, Cost

Variance

Innovation and R&D Metrics: R&D Expenditure as a Percentage of Sales, New

Product Success Rate, Patents Filed.

QUALITATIVE FACTORS

▪ Consistency with the goals and policies

▪ Consonance – ability to be flexible and adaptable to changing situation
▪ Leadership Effectiveness
▪ Corporate Culture
▪ Customer Satisfaction and Brand Loyalty
▪ Innovation and Creativity
▪ Employee Development and Skills
▪ Organizational Structure and Communication
▪ Social Responsibility and Ethical Standards
▪ Stakeholder Relationships
 10. Identify the components of a strategic audit.

Strategic

PART B – 5 X 13 Marks

11. Prepare and discuss the Environment Threat and Opportunity (ETOP) Profile for
a company?

Strategic

12. Brief on Balanced Score Card and McKinsey’s 7S framework.

>> Evaluate the organizational alignment of

To understand the current organizational status of both hard and soft elements that
determine the performance level of corporate-wide activities during the strategic
execution.

This will help achieving the followings:

>> Interconnected, holistic, value creation,

>> influence organizational performance and outcome.

>> help to achieve firm’s desired future state [ideal future].

Hard elements

STRATEGY

The organization’s approach to strategic planning and execution.

STRUCTURE

How the organization is set up for roles, responsibilities, decision-making, leadership,

and task ownership
SYSTEM

Processes, infrastructure, and workflows used by the organization

Soft elements

STAFF

The people who work for the organization, including human resources and talent
management.

STYLE

The way people in the organization operate and interact, including leadership
philosophy, management style, and code of conduct.

SHARED VALUES

The organization’s core beliefs, mission, and vision that help form its culture.

13. Write a note on stability, expansion, retrenchment, and combination strategies.

The

14. Elaborate on the strategy implementation process.

The

15. Explain the importance of Organizational Structures to Strategic Implementation?

The