PRACTICE QUESTIONS
I - Define Strategic Management (STM):
II - How STM is different from general management? -
III a - What is 'Strategic Plan?' b - And why
IV - List four components of Strategic Plan and describe
it is important?
each one briefly.
V a - Define the term "Competitive
Advantage."
V b - And give an example for 'Competitive Advantage.'
VI - What are the three stages of Strategic
Management Process?
VII - List four activities that are carried in the
StrategyFormulation stage / Strategy Implementation
stage/ and Strategy evaluation stage
VIII – Differentiate Strategy formulation
from Strategy implementation
IX – Differentiate the Leadership firms from the Runner-up
firms
X – What are the components of a mission
statement
XI – Know how to write financial objective and strategic
objective
XII – understand the difference between a
vision statement and a mission statement
XIII – Learn how to locate the components of a mission
statement in a given mission, for example: try to locate the
components in the mission of “Toyota”

Once there were two company presidents who competed in the same industry. These two
presidents decided to go on a camping trip to discuss a possible merger. They hiked deep into the
woods. Suddenly, they came upon a bear that rose up on its hind legs and snarled. Instantly, the first
president took off his backpack and got out a pair of running shoes. The second president said, “Hey,
you can’t outrun that bear.” The first president responded, “Maybe I can’t outrun that bear, but I
surely can outrun you!”
This story captures the notion of what concept?

Strategic management
The term strategic management in the textbook (David, F., Ali, a., and Al-Aali, A. (2011). Strategic
Management: Concepts and Cases. (Arab World Edition). Pearson: England.) is used synonymously
with (what) term Strategic planning.
1

Strategic Management is all about gaining and maintaining (what?)
competitive
advantage.

Strategists
are the individuals who are most responsible for the success or failure of an
organization.

It should be noted that, in the Arab world, various firms do not engage in strategic planning. List
at least six reasons why some firms do no strategic Planning?
i. ____________________________________________
ii. ____________________________________________
iii. ____________________________________________
iv. ____________________________________________
v. ____________________________________________
vi. ____________________________________________

More and more firms believe that ethics training and an ethics culture create strategic
advantage. For example, in its manual of ethics the Savola Group in Saudi Arabia stresses several
in relation to outsiders. List, at least, two of them below:


__________________________________________

__________________________________________
Gordon Greenley of Aston Business School in the UK stated that strategic management offers
several benefits. List four benefits that strategic management offers to organizations:
 __________________________________________
 __________________________________________
 __________________________________________
 __________________________________________

Good business ethics is expected to be the prerequisite for good strategic management.
2

All firms have a strategy, even if it is informal, unstructured, and sporadic.
True / False

‘Environmental scanning’ is otherwise called as ‘Industry Analysis.’
True / False

In the Arab World, the following factors are true or false:

vii. Low rate of birth
True /
False
viii. Youth segment is one of the largest and fast growing
True
/ False
ix. 80% of the population is under 25 years of age
True /
False
x. In the year 2050 = 25% population > 60 years or older
True
/ False
Revolutionary technological changes and discoveries are having a dramatic impact on
organizations. Along these lines, what factor would be acting as a national and global economic
engine that is spurring productivity, a critical factor in a country’s ability to improve living
standards; and it is saving companies billions of dollars in distribution and transaction costs from
direct sales to self-service systems.
a. Attitude toward work
b. Internet
c. Global economy
d. recycling
3

1
Match the following:
Vision Statement
A
Firm’s strengths that cannot be 10
easily matched or imitated by
competitors
2
Mission Statement
B
One of the forces on the Five-forces
9
model
3
Competitive Advantage
C
To identify opportunities and threat
4
Strategy Formulation
D
What do we want to become?
1
5
Benefit of Vision and
Mission statements
E
First stage of Strategic Management
4
6
Concern
for
Model
Public F
What is our Business?
2
Provides a basis for allocation of
5
Image
7
Effective Missions
G
resources
8
Purpose
of
External H
Audit
9
Rivalry
Unique feature / competence of a
3
firm
among I
Reflect future growth
7
One of the components of Mission
statement
6
competing firms
10
Distinctive competence
J
4

Learn to draw the Strategic Management Model including the key stages with major
processes
5

Know how to draw diagram to portray the levels of strategies:
o
a) For a Single Business
b) For a Corporate Business or a Business Group.
a....
6
b..............

Know how to draw the “Five Forces Model of Competition” of Michael Porter
7

Know how to draw the Porter’s Model of Five Generic Strategies – with the strategies listed

Are there any problems with BCG Matrix Model, in measuring the strategic performance of an
Organization? List at least five problems below: (to be handwritten)
a. Refer to SWOT Matrix and answer the following:
b. SO Strategies mean: use
a firm’s internal strengths to take advantage of
external opportunities.
c.
ST Strategies mean: use
a firm’s strengths to avoid or reduce the impact
of external threats.
8
d.
WO Strategies mean: improving
internal weaknesses by taking advantage
of external opportunities.
e. WT Strategies mean:
defensive tactics directed at reducing internal
weakness and avoiding external threats.
Statement
Your Answer
Strategy formulation requires coordination among a few individuals, but True / False
strategy implementation requires coordination among many.
A vision statement is, in essence, a company's game plan.
True / False
The final stage in strategic management is strategy implementation
True / False
Strategy formulation, implementation and evaluation activities occur at True / False
three hierarchical levels in a large diversified organization: corporate,
divisional and functional.
One of the fundamental strategy evaluation activities is reviewing external True / False
and internal factors that are the bases for current strategies.
An objective, logical, systematic approach for making major decisions in an True / False
organization is a way to describe the strategic-management process.
Strategists are usually found in higher levels of management and have True / False
considerable authority for decision-making in the firm.
Strategic management is an attempt to organize qualitative and True / False
quantitative information in a way that allows effective decisions to be
made under conditions of uncertainty.
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Anything the firm does especially well compared to rival firms could be True / False
considered a competitive advantage.
By occasionally monitoring external events, companies should be able to
True /
False
identify when change is required.
The middle manager is the most visible and critical strategic manager.
True / False
A vision statement answers the question, "What is our business?" whereas True / False
a mission statement answers, "What do we want to become?"
A clear mission statement describes the values and priorities of an True / False
organization.
Strengths and weaknesses are determined relative to competitors.
True / False
Objectives should be measurable, challenging, reasonable, consistent and True / False
clear.
For the strategic planning process to be effective, organizations must
True / False
continually strengthen the "good ethics is good business" policy.
Identifying an organization's existing vision, mission, objectives and True / False
strategies is the final step for the strategic management process.
Low-performing firms typically underestimate their competitor's strengths True / False
and overestimate their own firm's strengths.
Application of the strategic-management process is typically more formal True / False
in larger and well-established organizations.
Strategic objectives include larger market share, quicker on-time delivery True / False
than rivals, quicker design-to-market times than rivals, lower costs than
rivals, and wider geographic coverage than rivals.
10
Market penetration, market development, and product development are True / False
intensive strategies.
An appropriate strategy when an organization has excess production True / False
capacity is market development.
Product development is an appropriate strategy when an organization has True / False
successful products that are in the maturity stage of the product life cycle.
A best-value strategy offers products or services to a wide range of True / False
customers at the best price-value available on the market.
A low-cost focus strategy offers products or services to a small range of True / False
customers at the lowest price available on the market.
Unlike strategy formulation, strategy implementation varies considerably True / False
among different types and sizes of organizations.
Four types of resources that can be used to achieve desired objectives are True / False
financial, physical, human and technological.
Adequate, timely feedback is important to effective strategy evaluation.
True / False
Regardless of the size of the organization, a certain amount of True / False
"management by wandering around" at all levels is essential to effective
strategy evaluation.
Corrective action in strategy evaluation is necessary to keep an True / False
organization on track toward achieving stated objectives.
11
What can be defined as the art and science of formulating, implementing and evaluating crossfunctional decisions that enable an organization to achieve its objectives?
A) Strategy implementation
B) Strategic management
C) Strategy formulation
D) Strategy evaluation
E) Strategic leading

During what stage of strategic management are a firm's specific internal strengths and
weaknesses determined?
A) Implementation
B) Formulation
C) Goal-setting
D) Evaluation
E) Feedback

An important activity in ________ is taking corrective action.
A) Strategy leadership
B) Strategy evaluation
C) Strategy implementation
D) Strategy formulation
E) all of the above
12

What step in the strategic development process involves mobilizing employees and managers
to put strategies into action?
A) Competitive advantage
B) Strategic advantage
C) Implementing strategy
D) Strategy evaluation
E) Formulating strategy

Which phase of strategic management is called the action phase?
A) Strategy evaluation
B) Strategy formulation
C) Strategy implementation
D) Allocating resources
E) Measuring performance

Long-term objectives are needed at which level(s) in an organization?
A) Corporate
B) Functional
C) Divisional
D) All of the above
E) None of the above
13

Financial objectives involve all of the following except:
A) Higher dividends.
B) Larger market share.
C) Growth in revenues.
D) A rising stock price.
E) Greater return on investment.

Microsoft opening its own retail stores is an example of which type of strategy?
A) Related diversification
B) Forward integration
C) Backward integration
D) Horizontal integration
E) Unrelated diversification

Cadbury PLC selling its Australian drinks business to Asahi Breweries Ltd. of Japan is an example
of which type of strategy?
A) Divestiture
B) Unrelated diversification
C) Related diversification
D) Retrenchment
E) Liquidation
14

Burger King opening its first restaurant in Japan is an example of which type of strategy?
A) Product development
B) Forward integration
C) Market development
D) Backward integration
E) Horizontal integration

Web sites that sell products directly to consumers are examples of which type of strategy?
A) Conglomerate diversification
B) Backward integration
C) Forward integration
D) Product development
E) Horizontal integration

Which of these strategies is effective when the number of suppliers is small and the number of
competitors is large?
A) Concentric diversification
B) Conglomerate diversification
C) Backward integration
D) Horizontal diversification
E) Forward integration
15

Which strategy seeks to increase market share of present products or services in present
markets through greater marketing efforts?
A) Product development
B) Backward integration
C) Forward integration
D) Market development
E) Market penetration

Smithfield Foods laying off 1,800 employees, closing 6 of its 40 plants, and cutting production by
10 percent in 2009 in efforts to stop the liquidity drain on the firm is an example of
A) Retrenchment.
B) Divestiture.
C) Backward integration.
D) Liquidation.
E) Forward integration.

Which strategy would be effective when the stockholders of a firm can minimize their losses by
selling the organization's assets?
A) Liquidation
B) Differentiation
C) Integration
D) Cost leadership
E) Diversification
16

Business ethics, _______, and sustainability issues are interrelated and impact all areas of the
comprehensive strategic-management model.
A) Social networking
B) Fiscal irresponsibility
C) Cultural indifference
D) Social responsibility
E) None of the above

Bad ethics can _______ strategic plans
A) Derail only poorly-intentioned
B) Derail all but the best
C) Derail only ill-conceived
D) Derail even the best
E) Never affect

Firms should strive to engage in social activities that
A) Have economic benefits.
B) Garner goodwill only, not profits.
C) Are detrimental to economic growth.
D) Drain financial resources.
E) Have no economic benefits.
17

Communication between domestic headquarters and overseas operations is often made difficult
by
A) Variations in business practices.
B) National differences.
C) Cultural differences.
D) Geographic distance.
E) all of the above

_______ is a process of doing business worldwide, so strategic decisions are made based on
global profitability of the firm rather than just domestic considerations.
A) Foreign business culture
B) Protectionism
C) Multinational Corporation
D) World recession
E) Globalization
18
Match the following:
1
Cost leadership – Low Cost strategy
A
2
Market penetration strategy
3
10
B
One of the stages in Strategic Management
process
One of the strategies for Industry leaders
Liquidation strategy
C
One of the strategies for Weak Businesses
8
4
High quality provider strategy
D
One of the strategies for Runner-up firms
7
5
Outsourcing
E
One of the strategic management tools
6
6
Value Chain Analysis
F
One of the means of achieving strategies
5
7
Vacant-niche strategy
G
One of the operational strategies
4
8
Offensive Turnaround strategy
H
One of the defensive strategies
3
9
Stay-on the offensive strategy
I
One of the Intensive strategies
2
10
Strategy evaluation
J
One of Porter’s Generic Strategies
1
9
19