STRATEJİK YÖNETİM

After establishing long-term goals, the next step in the strategic management model
is to identify alternative strategies through which long term goals will be achieved. Strategies are critical in many ways for business firms. They have their wide spectrum functions.

Strategy serves as a common framework of reference is explained as in the following:

Even though circumstances will change,
strategy offers an organization a common point of reference. This makes sure that, if there is a
change, the people in and around the organization collectively can know what assumptions, ideas or plans they are going to deviate from.

Backward integration is characterized with increasing ownership or
control over distributors or retailers (going forward in the
value chain in an industry).

Increasing ownership or control over firm’s suppliers (going back to the value chain in an industry) is a characteristic of forward integration.

Generic strategies are three basic strategies applicable to any business: cost leadership, differentiation and focus
(sometimes called niche).

Cost leadership requires producing standard products or services at low cost per part or unit for price sensitive consumers. Two different types of cost leadership strategies
are expressed: low-cost strategy and best-value strategy. Therefore, C is the correct choice.

Differentiation strategy is defined as a strategy aiming at distinguishing a firm’s products or services from other similar products or services offered by the competitors. This strategy involves the development of products or services unique for customers in terms of product design, features, brand image, quality, or customer service.

Business firms generally prefer forward integration when they
• have enough capital to establish their own distribution system,
• experience problems and delays in distribution channels
• face high price increases demanded by marketing channel members
• produce very technical products
• lack competent and specialized distribution channels
• perform in a fast-growing industry.

Therefore, B is not a reason for forward integration preference.

Horizontal growth is increasing the sales points because it can be reached via domestic or exterior expansion, through acquisitions and strategic partnerships in the same sector.
For example, to add more sales places in further geographical areas. An organization can more boost its sales numbers by penetrating more sales points at home and abroad.

Concentration strategies include market penetration, market development, and product
development.

The book states the following as reasons of adopting defensive strategies.

1. Insufficient strategic management
(inadequate administration, acquisitions
that do not meet the expectations,
inadequate management of large projects,
fraud or false pretenses, etc.)
2. Weak financial administration (inadequate
fiscal control, loss of cost advantage, etc.)
3. Competitive powers (The negative impact
of competitive conditions, supply issues,
inadequate or poorly managed marketing
department, etc.)