Strategic Management Chapter 1 - Case Discussion Questions 
Strategic Management Tutorial 1
1. STRATEGY – A set of actions that managers take to increase their company’s performance relative to rivals
- An action that a company takes to attain one or more of its goals
A business model looks at how to create value for a consumer, and does not look into the future planning and forecasting of a business to achieve profits and a competitive advantage, unlike a strategy. A strategy defines the path that the business will take in the future in order to achieve its goals of profit maximization and competitive advantage.
2. Strengths of Strategic Formal Planning:
When ‘scenario planning’ is done correctly, it can ensure profitability of a company whichever scenario comes to pass
‘Scenario planning’ creates FLEXIBILITY - can push managers to think outside the box and to anticipate what they might have to do in different situations and to learn that the world is complex and unpredictable.
Weaknesses of Strategic Formal Planning:
When managers plan in the context of the current competitive environment, rather than in the future
The future is inherently unpredictable, especially when unforeseen contingencies occur
When companies construct and treat their strategic planning process in a ‘top management responsibility’, which can result in hostility from employees. Employees may also know better, and top-level managers may not listen to their ideas e.g emerging Japanese threat in the globalisation of the appliance market
If managers do not use the managers do not use the information at their disposal effectively – may make poor decisions
Cognitive biases – systematic errors in human decision making that arise from the way people process information
3. President Obama
Vision, Eloquence & Consistency – He has a clear vision of where he wants America to be, of creating an economy built to last, by investing in education and training, ending taxpayer subsidiaries to oil & invest in natural energy sources, invest in infrastructure,
1. STRATEGY – A set of actions that managers take to increase their company’s performance relative to rivals
- An action that a company takes to attain one or more of its goals
A business model looks at how to create value for a consumer, and does not look into the future planning and forecasting of a business to achieve profits and a competitive advantage, unlike a strategy. A strategy defines the path that the business will take in the future in order to achieve its goals of profit maximization and competitive advantage.
2. Strengths of Strategic Formal Planning:
When ‘scenario planning’ is done correctly, it can ensure profitability of a company whichever scenario comes to pass
‘Scenario planning’ creates FLEXIBILITY - can push managers to think outside the box and to anticipate what they might have to do in different situations and to learn that the world is complex and unpredictable.
Weaknesses of Strategic Formal Planning:
When managers plan in the context of the current competitive environment, rather than in the future
The future is inherently unpredictable, especially when unforeseen contingencies occur
When companies construct and treat their strategic planning process in a ‘top management responsibility’, which can result in hostility from employees. Employees may also know better, and top-level managers may not listen to their ideas e.g emerging Japanese threat in the globalisation of the appliance market
If managers do not use the managers do not use the information at their disposal effectively – may make poor decisions
Cognitive biases – systematic errors in human decision making that arise from the way people process information
3. President Obama
Vision, Eloquence & Consistency – He has a clear vision of where he wants America to be, of creating an economy built to last, by investing in education and training, ending taxpayer subsidiaries to oil & invest in natural energy sources, invest in infrastructure,