MGT 499 Strategic Management Test 1(Correct answers)
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Module
MGT 499
Institution
MGT 499
Strategy correct answers set of related actions managers take to increase company performance
Strategic Leadership correct answers creating competitive advantage thru effective management of strategy-making process
strategy formulation correct answers selecting strategies based on analysis of...
MGT 499 Strategic Management Test 1(Correct answers)
Strategy correct answers set of related actions managers take to increase company performance
Strategic Leadership correct answers creating competitive advantage thru effective management of
strategy-making process
strategy formulation correct answers selecting strategies based on analysis of organization's external and
internal environment
Strategy implementation correct answers -Putting strategies into action
-Taking action at functional, business, and corporate levels to execute strategic plan
-Designing best organization structure, culture, and control systems to put chosen strategy into action
Determinants of Shareholder Value correct answers effectiveness of strategies
profitability (ROIC)
profit growth
shareholder value
Risk capital correct answers Equity capital with no guarantee that stockholders will:
-Recoup their investment
-Earn a decent return
Shareholder value correct answers Returns shareholders earn from purchasing shares in company
-Sources:
*Capital appreciation in value of company's shares
*Dividend payments
Profitability correct answers Return company makes on capital invested in enterprise
*Return on invested capital (ROIC)
*Result of how efficiently capital is used to satisfy customer needs
,Return on invested capital (ROIC) correct answers Net profit over the capital invested in a firm
Profit growth correct answers Increase in net profit over time, achieved by:
-Selling products in rapidly growing markets
-Gaining market share from rivals
-Selling more to existing customers
-Expanding overseas or diversifying into new businesses
To boost profitability and profit growth, managers must correct answers -Use strategies to give company
competitive advantage over rivals
-Deliver high profitability and sustainable profit growth
Competitive Advantage correct answers company's profitability is greater than average profitability of
firms in industry
Sustained competitive advantage correct answers company's strategies enable it to maintain above-
average profitability for number of years
BUSINESS MODEL correct answers *Conception of how strategies should work together as whole to
enable company to achieve competitive advantage
*Deals with how company:
-Selects, acquires, and keeps customers
-Defines and differentiates product offerings
-Creates value for customers
-Produces goods or services and delivers to market
-Lowers costs and organizes resources and activities
-Achieves and sustains high profitability and growth
General Managers correct answers Bear responsibility for company's overall performance or one major
self-contained subunits/divisions
, Functional managers correct answers Responsible for supervising particular function, task, activity, or
operation
Multidivisional company correct answers Competes in several different businesses and has separate self-
contained division to manage each
Levels of Strategic Management correct answers -Corporate level: CEO, Board of Directors, corp
staff=>Head Office
-Business level: Divisional Managers and staff=>Division A;Division B; Division C
-Functional level: Functional Managers=>Business functions; Business functions, Business Functions
- Market A; Market B; Market C
Corporate-Level Managers correct answers -Oversee development of strategies for entire organization
-Provide link b/w people concerned with firm's strategic development and shareholders
-Ensure business strategies pursued by company are consistent with maximizing profitability and profit
growth
Business-Level Managers correct answers -Heads of business units
-Translate statements of intents into concrete strategies for individual businesses
-Concerned with strategies specific to particular business
Business unit correct answers Self-contained division that provides product or service for particular
market
Functional- Level Managers correct answers -Responsible for specific business functions
-Develop functional strategies to fulfill strategic objectives set by business and corporate level general
managers
-Provide information that helps formulate realistic and attainable strategies
Formal Strategic Planning Process correct answers *Select corporate mission and goals
*Analyze organization's external competitive environment and internal operating environment
*Select strategies that:
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