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Strategic Management Practice Quiz 1

The document defines and differentiates between the tactical cloud and strategic horizon. The tactical cloud refers to operational level decision making within a firm's divisions that does not concern long term strategy. In contrast, the strategic horizon is where major long term strategic decisions are made with little initial regard for business operations. It also defines strategic breadth and width, providing the example that a company that manufactures cars expanding into aircraft manufacturing has increased its strategic breadth through diversification. Finally, it analyzes Ford Motor Company in Australia using Porter's Five Forces model, identifying high levels of rivalry, threat of new entrants, threat of substitutes, and bargaining power of buyers and suppliers. It gives examples of how internal resources like well-

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Syed Asrar Alam
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77 views

Strategic Management Practice Quiz 1

The document defines and differentiates between the tactical cloud and strategic horizon. The tactical cloud refers to operational level decision making within a firm's divisions that does not concern long term strategy. In contrast, the strategic horizon is where major long term strategic decisions are made with little initial regard for business operations. It also defines strategic breadth and width, providing the example that a company that manufactures cars expanding into aircraft manufacturing has increased its strategic breadth through diversification. Finally, it analyzes Ford Motor Company in Australia using Porter's Five Forces model, identifying high levels of rivalry, threat of new entrants, threat of substitutes, and bargaining power of buyers and suppliers. It gives examples of how internal resources like well-

Uploaded by

Syed Asrar Alam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Q1.

Define tactical cloud and differentiate it from the


strategic horizon.
A/ The Tactical Cloud (TC) is the operational-level
decision making process that takes place within the
operational divisions of the firm in a way that does not
concern itself with long-term strategy. An example of
this is a decision on generic product pricing. This is
done by a role called the Operations Manager.
On the other hand, the Strategic Horizon (SH) is the
hypothetical place where the major, long-term
decisions, called Strategic Decisions, are made. These
are made with little initial regard for the operations of
the business as the focus is strategic or long term. The
person making such a decision is called the Strategic
Manager.

Q2. What is meant by the Strategic Breadth and the


Strategic Width? Give examples.
A/ The Strategic Breadth is part of the Strategic
Horizon. It describes the level of diversification of a
business as a result of the firms strategy. An example
of this would be a company that manufactures cars
that also starts to manufacture aircraft. The Strategic
Width has the same meaning as the Strategic Breadth
(as opposed to the Strategic Length which is different).
Q3. List and explain Porters Five Forces Model for Ford
Motor Company in Australia.
A/ Ford is in a situation where the competitive
advantage for the firm is much lower than in the early
to mid-2000s given the large number of imported cars
into Australia. Its PFFM reads as:
1. Rivalry among established firms is high because
many companies sell cars in Australia, and this is
coupled with a large number of imported cars.
2. Threat of new entrants is high because any car
manufacturer can sell cars in Australia by
importing them.
3. Threat of substitute products is high because of an
increase in public transport and the user of
scooters and motorcycles.
4. Bargaining power of buyers is high given the many
price and quality options available to buyers in the
Australian market.
5. Bargaining power of suppliers is high (labour) due
to the high labour costs and these resources being
vital for production.
Q4. Give an example of an internal and external
resource for a firm and explain how it affects the
Strategic Choice of the firm.
A/ The location of a firm, such as its proximity to
shipping ports or other types of access to transit and
transport hubs is an example of an external resource
that can make the firm more competitive.
An example of an internal resource is the staff who
work at the firm. If those staff are well-trained,
competent and loyal, the firm is more competitive.

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