BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Detailed explanation-1: -Analyzing your company’s external environment is a critical step in preparing a strategic plan. This is a complex task because it involves collecting a variety of data to get an accurate picture of the situation. Based on this analysis, the company can then make sound decisions to further its growth.
Detailed explanation-2: -A PEST analysis (or STEP analysis) invites you to list all the relevant external forces using four headings: Political, Economic, Sociological and Technological. These are useful headings; it doesn’t matter that some items might be both political and economic (eg taxation and exchange rates).
Detailed explanation-3: -What is a strategic group? Of what value is knowledge of the firm’s strategic group in formulating that firm’s strategy? A strategic group is a collection of businesses that have similar strategic goals and strategies. The notion of strategic groupings might be useful for analyzing an industry’s competitive structure.
Detailed explanation-4: -“External monitoring provides the information needed for strategic planning and crisis management” (Yukl, p. 198, 2013). External monitoring is crucial because it forces the organization to be vigilant of competitors, forces a re-evaluation of current trends and deflects threats from the outside environment.