Strategic Management Essay

5586 Words Apr 18th, 2013 23 Pages
Strategic Management

Section A: Objective Type (30 marks)
•This section consists of multiple choice questions & Short notes type questions.
•Answer all the questions.
•Part one questions carry 1 mark each & Part two questions carry 5 marks each.

Part One:
Multiple choices:

1. A plan of action designed to achieve a particular goal is:
b. Strategy

2. It is important to develop mission statement for:
a. Allocating organizational resources

3. The five forces model was developed by:
c. Michael E. Porter

4. How many elements are involve in developing in an organizational strategy:
a. Six

5. The three important steps in SWOT analysis are:
b. Opportunities, Threats, Strengths

6. GE matrix consists of how
…show more content…
According to this matrix, business could be classified as high or low according to their industry growth rate and relative market share.

Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.

The analysis requires that both measures be calculated for each SBU. The dimension of business strength, relative market share, will measure comparative advantage indicated by market dominance. The key theory underlying this is existence of an experience curve and that market share is achieved due to overall cost leadership.

BCG matrix has four cells, with the horizontal axis representing relative market share and the vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0. if all the SBU’s are in same industry, the average growth rate of the industry is used. While, if all the SBU’s are located in different industries, then the mid-point is set at the growth rate for the economy.

Resources are allocated to the business units according to their situation on the grid. The four cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these cells represents a particular type of business.

10 x 1 x 0.1 x
Figure: BCG Matrix

1. Stars- Stars represent business units having large market

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