STRATEJİK YÖNETİM - Deneme Sınavı - 3

There are three main options (Porter, 1985):

1. Cost Leadership

2. Differentiation

3. Focus

Integration strategies consist of three strategies, namely forward
integration, backward integration, and horizontal integration.

Market penetration refers to increasing the sales of the firm’s existing products through intensive marketing efforts.

Diversification is a strategy in which a company enters an industry or market different from its core activity. Diversification involves moving an organization from a single service or product to additional industry areas which are or are not associated with the existing business.

Among the causes of employing defensive strategies are:

Insufficient strategic management (inadequate administration, acquisitions that do not meet the expectations, inadequate management of large projects, fraud or false pretenses, etc.)

Weak financial administration (inadequate fiscal control, loss of cost advantage, etc.)

Competitive powers (The negative impact of competitive conditions, supply issues, inadequate or poorly managed marketing department, etc.)

A joint venture is an arrangement among business firms to pool their resources for accomplishing a specific task.

Divestiture is made because the business unit or department does not make profit, or the transaction is not performed and is not done within a satisfactory investment or time structure.

Liquidation can be the only option when a business is not well managed, or it cannot cope with the underlying changes or sales that remain below the targets constantly.

Unrelated diversification is always high-level risk, the predictable explanations for failure are:

The synergy and collaboration capability is overestimated by managers,

Administrative troubles and obstacles are misjudged.

Crucial administrators are left behind after acquisition.

The hidden weaknesses of the business are realized too late.

A lot of costs are funded, and the profit is not taken back soon.

Three main reasons why a business concept centered on both of diversification strategies causes malfunction of competitive advantage are listed below (Hill & Jones, 2011):

1. Changes over time within the company or industry

2. Diversification made as a result of incorrect evaluations

3.  Excessive diversification leading to boosted bureaucratic expenditures.

As seen, the final stage of strategic management process is the process of strategic evaluation and control. The correct answer is A.

The reading below mentions some of the most common reasons why strategies fail. The reason #5 in the Figure (i.e. lacking planning and control) is especially important as it is the focus of this Unit. Here are the whole reasons: 1. INCOMPETENT MANAGEMENT, 2. VAGUE STRATEGIC VISION, 3. INADEQUATE STRATEGY, 4. NO IMPLEMENTATION PLAN, 5. LACKING PLANNING AND CONTROL, 6. NEGLECT OF POLITICAL INTEREST, 7. CULTURE OF FEAR. The correct answer is A.

Strategic evaluation and control: The process of determining the effectiveness of a given strategy in achieving organizational objectives and taking corrective action wherever required to continually ensure its effectiveness. The correct answer is A.

When we look at Table 8.1 Comparison of Purposes of Strategic Evaluation and Control and Other Two Stages, the purposes of Strategic Evaluation and Control are:

− the assumptions forming the bases of strategies are still valid,

− strategies are being implemented properly,

− there is a need to change the strategy,

− the strategy is guiding the organization towards the desired objectives,

− how well the organization is performing,

− if the resources are being utilized properly,

− what needs to be done to ensure that resources are utilized properly, and objectives are met,

− if there is any significant gap between the desired and actual outcomes,

− what kind of (corrective) actions are necessary to achieve the desired outcomes.

The correct answer is A.

The process of strategic evaluation and control offers various benefits to managers (see Kazmi & Kazmi, 2015, pp: 684-685; Robbins et. al., 2013).

The correct answer is A.

Various entities participate in the process of strategic evaluation and control, including stakeholders, the board of directors and top-level managers. The correct answer is A.

There are many difficulties in the process of strategic evaluation and control. These obstacles are related to the amount of control to exert, measurement difficulties, resistance to evaluation and control, short-term orientation in measuring results, and using efficiency or effectiveness as the measurement criteria. The correct answer is A.

Short-Term Orientation: Another obstacle in the strategic evaluation and control process is managers’ tendency to measure the immediate results of activities or strategic plans. Managers usually rely on short-term results because they may not realize the importance of long-term results, or they find assessing the short-term results easier than assessing the long-term results. The correct answer is A.

Control can be defined as “the management function that involves monitoring activities to ensure that they are being accomplished as planned and correcting any significant deviations” The correct answer is A.

Concurrent control is implemented while a work activity is in progress. It corrects problems as they happen. The correct answer is A.