CHAPTER 1:

1-39 In sequential order in the strategic-planning process, arrange the following appropriately:
policies, objectives, vision, strategies, mission, strengths.
-The sequential order in the strategic-planning process, based on the strategic-management framework
provided in the book, is as follows:
1. Vision: This represents the desired future state or aspirations of the organization.
2. Mission: Defines the organization's purpose and reason for being.
3. Strengths: Part of internal analysis to understand what the organization excels at.
4. Objectives: Specific results the organization aims to achieve.
5. Strategies: The means by which objectives will be achieved.
6. Policies: Guidelines or procedures to support the implementation of strategies
1-40. Label the following as an opportunity, a strategy, or a strength.
a. XYZ inc. is hiring 50 more salespersons.
b. XYZ inc. has 50 salespersons.
c. XYZ inc.’s rival firm has only 50 salespersons.
XYZ Inc. is hiring 50 more salespersons.
 Classification: Strategy
 Reason: This is an action or plan undertaken to achieve a specific objective, such as improving
sales performance or expanding market reach.
b. XYZ Inc. has 50 salespersons.
 Classification: Strength
 Reason: This is a resource or capability that the organization currently possesses, which can be
leveraged for competitive advantage.
c. XYZ Inc.’s rival firm has only 50 salespersons.
 Classification: Opportunity
 Reason: This presents a potential external situation that XYZ Inc. could exploit, especially if
XYZ Inc. has or plans to have more salespersons than its rival, offering a competitive edge.
1-41. what two factors most often result in a CSO being hired or appointed by the firm?
The two factors most often resulting in the hiring or appointment of a Chief Strategy Officer (CSO)
are:
1. Rapid industry change: Firms in rapidly evolving industries often require a CSO to adapt
quickly to changes and maintain competitive advantages.
 2. Increased complexity in managing strategy: When a firm's strategic processes become more
complex due to global expansion, technological advancements, or diversification, a CSO is
brought in to streamline and oversee strategic initiatives effectively
1-42. explain why internal strengths and weaknesses should be stated in divisional terms to the
extent possible.
Internal strengths and weaknesses should be stated in divisional terms because this enables more
effective strategy formulation. By analyzing divisions individually, organizations can allocate resources
and design strategies tailored to specific segments, such as product lines or regions. For example,
mentioning "Sam's Club revenues grew by 11% in the recent quarter" is more actionable than a generic
statement about the entire firm
1-43. explain why both internal and external factors should be stated in specific terms (that is,
using numbers, percentages, money ratios, and comparisons over time) to the extent possible.
Internal and external factors should be stated using numbers, percentages, money ratios, and
comparisons over time because this specificity facilitates better strategy formulation and resource
allocation. Quantifiable data provide clarity and allow for precise benchmarking against past
performance or competitors
1-44. identify the three activities that comprise strategy evaluation.
The three activities that comprise strategy evaluation are:
1. Reviewing external and internal factors that are the bases for current strategies.
2. Measuring organizational performance, including comparing expected results with actual
results.
3. Taking corrective actions to ensure performance aligns with plans and objectives
1-45. List six characteristics of annual objectives.
Annual objectives should possess the following six characteristics to ensure their effectiveness:
1. Measurable: Objectives should provide a clear basis for evaluating performance and progress.
2. Consistent: They must align with long-term objectives and strategies.
3. Reasonable: Objectives should be challenging yet achievable.
4. Challenging: They should motivate and push the organization towards growth and
improvement.
5. Clear: Objectives need to be easily understood by all stakeholders.
6. Communicated throughout the organization: To ensure alignment, they should be widely shared
within the organization
1-46. would strategic-management concepts and techniques benefit foreign businesses as much as
domestic firms? Justify your answer.
Yes, strategic-management concepts would benefit foreign businesses as much as domestic firms. The
benefits include improved communication, enhanced understanding and commitment among
employees, and more systematic decision-making. These advantages are critical in navigating both
domestic and international markets. For example, northern European countries tend to be more
participative in management style, whereas southern European countries tend to be more autocratic (as
does Mexico). Many foreign businesses are using strategic-management concepts and techniques
effectively. This textbook is very widely used globally, being the best seller in Japan, China, and
Mexico.
1-47. what do you believe are some potential pitfalls or risks in using a strategic-management
approach to decision making?
Potential pitfalls include conducting the process haphazardly, creating plans without proper
implementation, overestimating a firm's strengths, underestimating competitors, and failing to adapt
strategies to changing conditions. Poorly executed strategic management can lead to wasted resources
and strategic misalignment
1-48. what does recent research reveal to be the most important component/activity in the
strategic-management process?
Recent has examined the strategic-management process and concluded that perhaps the most important
“activity” is the feedback loop, because strategy must be thought of as a “verb rather than a noun.”
Rose and Cray contend that strategy is a “living, evolving conceptual entity,” and as such must be
engulfed in flexibility. “Flexibility” should also be reflected in the structures put in place to monitor
and modify strategic plans. Flexibility safeguards should increasingly be known and practiced
throughout the firm, especially at lower levels of the organization. The stages of strategic management
(formulation, implementation, and evaluation) are so fluid as to be virtually indistinguishable when one
starts and the other ends. Thus, in the comprehensive model illustrated, the encompassing feedback
loop is vitally important to enable firms to readily adapt to changing conditions. A significant change in
any activity (box) in the model could necessitate change(s) in other activities.
BỔ SUNG CHAPTER 2
Characteristics of a mission Statement
A mission statement is a declaration of attitude and outlook. it usually is broad in scope for at least two
major reasons. First, a good mission statement allows for the generation and consideration of a range
of feasible alternative objectives and strategies without unduly stifling management creativity. excess
specificity would limit the potential of creative growth for the organization. However, an overly general
statement that does not exclude any strategy alternatives could be dysfunctional. apple Computer’s
mission statement, for example, should not open the possibility for diversification into pesticides—or
Ford motor Company’s into food processing.
Second, a mission statement needs to be broad to reconcile differences effectively among, and appeal
to, an organization’s diverse stakeholders, the individuals and groups of individuals who have a special
stake or claim on the company. thus, a mission statement should be reconciliatory. Stakeholders include
employees, managers, stockholders, boards of directors, customers, suppliers, distributors, creditors,
governments (local, state, federal, and foreign), unions, competitors, environmental groups, and the
general public. Stakeholders affect and are affected by an organization’s strategies, yet the claims and
concerns of diverse constituencies vary and often conflict. For example, the general public is especially
interested in social responsibility, whereas stockholders are more interested in profitability. Claims on
any business literally may number in the thousands, and they often include clean air, jobs, taxes,
investment opportunities, career opportunities, equal employment opportunities, employee benefits,
salaries, wages, clean water, and community services. all stakeholders’ claims on an organization
cannot be pursued with equal emphasis. A good mission statement indicates the relative attention that
an organization will devote to meeting the claims of various stakeholders.
The fine balance between specificity and generality is difficult to achieve, but it is well worth the effort.
george Steiner offers the following insight on the need for a mission statement to be broad in scope:
most business statements of mission are expressed at high levels of abstraction. Vagueness nevertheless
has its virtues. mission statements are not designed to express concrete ends, but rather to provide
motivation, general direction, an image, a tone, and a philosophy to guide the enterprise. an excess of
detail could prove counterproductive since concrete specification could be the base for rallying
opposition. Precision might stifle creativity in the formulation of an acceptable mission or purpose.
once an aim is cast in concrete, it creates a rigidity in an organization and resists change. Vagueness
leaves room for other managers to fill in the details.
.An effective mission statement generates the impression that a firm is successful, has direction, and is
worthy of time, support, and investment—from all socioeconomic groups of people.
A business mission reflects judgments about future growth directions and strategies that are based on
forward-looking external and internal analyses. the statement should provide useful criteria for
selecting among alternative strategies. a clear mission statement provides a basis
A business mission reflects judgments about future growth directions and strategies that are based on
forward-looking external and internal analyses. the statement should provide useful criteria for
selecting among alternative strategies. a clear mission statement provides a basis for generating and
screening strategic options. the statement of mission should be sufficiently broad to allow judgments
about the most promising growth directions and those considered less promising.
A Customer Orientation
An effective mission statement describes an organization’s purpose, customers, products or services,
markets, philosophy, and basic technology. according to Vern mcginnis, a mission statement should (1)
define what the organization is and what the organization aspires to be, (2) be limited enough to
exclude some ventures and broad enough to allow for creative growth, (3) distinguish a given
organization from all others, (4) serve as a framework for evaluating both current and prospective
activities, and (5) be stated in terms sufficiently clear to be widely understood throughout the
organization.8 the mission statement should reflect the anticipations of customers. rather than
developing a product and then trying to find a market, the operating philosophy of organizations should
be to identify customers’ needs and then provide a product or service to fulfill those needs. good
mission statements identify the utility of a firm’s products to its customers. this is why at&t’s mission
statement focuses on communication rather than on telephones; it is why exxonmobil’s mission
statement focuses on energy rather than on oil and gas; it is why union Pacific’s mission statement
focuses on transportation rather than on railroads; it is why universal Studios’ mission statement
focuses on entertainment rather than on movies. a major reason for developing a mission statement is to
attract customers who give meaning to an organization
The following utility statements are relevant in developing a mission statement: Do not offer me things.
Do not offer me clothes. offer me attractive looks. Do not offer me shoes. offer me comfort for my feet
and the pleasure of walking. Do not offer me a house. offer me security, comfort, and a place that is
clean and happy. Do not offer me books. offer me hours of pleasure and the benefit of knowledge. Do
not offer me CDs. offer me leisure and the sound of music. Do not offer me tools. offer me the benefits
and the pleasure that come from making beautiful things. Do not offer me furniture. offer me comfort
and the quietness of a cozy place. Do not offer me things. offer me ideas, emotions, ambience, feelings,
and benefits. Please, do not offer me things
2-2. Define “reconciliatory”(hòa giải) and give an example of how this “characteristic” can be
met in a mission statement.
Reconciliatory refers to the need for a mission statement to be supported by all stakeholders, even
though the claims of various stakeholders on the firm conflict. For example, shareholders want large
profits, which conflicts with employees wanting high wages, yet support is needed from both
constituencies. Thus, ideally a statement reconciles differences among key stakeholders, and does so
best by including the nine components written from a customer perspective. To leave out any
component, especially employees or customers or even profitability (or growth), would undermine the
desired reconciliatory characteristic
2-3. Which mission statement component most closely reveals the firm’s distinctive competence?
give an example.
Answer: The answer is “self-concept.” Offering the lowest prices among all rival firms could be a
company’s self concept, or providing the widest selection of products, or providing the best customer
service, or providing the best warranty. For instance, a charter boat fishing company might state: "For
customer enjoyment and safety, we provide the most experienced staff in the industry," emphasizing its
unique expertise .
2-4. Critique the following vision statement by Stokes eye Clinic: “our vision is to take care of
your vision.”
It is a cool sounding statement, but is ineffective as a vision statement, because it does not reveal the
type of business nor what the firm is striving to become or be five years into the future.
This vision statement is overly vague and lacks a customer-oriented perspective or future aspirations. It
should specify how it plans to achieve its goals or differentiate itself. An improved version could be:
"Our vision is to be the leading provider of comprehensive eye care services, ensuring clarity and
excellence for every patient we serve"
2-6. Some excellent nine-component mission statements consist of just two sentences. Write a two-
sentence mission statement for a company of your choice
For a tech company: "We strive to innovate user-friendly software that empowers individuals and
businesses to achieve their goals. Our commitment is to deliver excellence while fostering
sustainability and community development."
2-12. explain why a mission statement should not include monetary amounts, numbers,
percentages, ratios, goals, or objectives.
A mission statement is broad in scope for three reasons. First, it allows for the generation and
consideration of a range of feasible alternative objectives and strategies without unduly stifling
management creativity. Excess specificity would limit the potential of creative growth for the
organization. Second, a mission statement needs to be broad to reconcile differences among, and appeal
to, an organization’s diverse stakeholders. Thus, a mission statement should be reconciliatory. Third, it
is simply premature in the mission statement to reveal goals and objectives, which should be
determined after the internal and external assessment, as illustrated in the comprehensive strategic
planning model
2-14. Distinguish between the “self-concept” and the “philosophy” components in a mission
statement. give an example of each for your university.
 Self-Concept: Refers to the institution’s unique competence. Example: "We provide world-class
research opportunities to solve global challenges."
 Philosophy: Represents the institution’s core values. Example: "We are committed to inclusivity,
integrity, and lifelong learning for all students and staff" .
2-23. How would the mission statements of a for-profit and a nonprofit organization differ?
The mission statements of for-profit versus nonprofit organizations would not differ in the
characteristics or the components specified for inclusion in effective statements.
2-26. list eight benefits of having a clear mission statement
Table 2-2 lists 10 benefits that may be included in students’ lists: 1) achieve clarity of purpose among
all managers and employees; 2) provide a basis for all other strategic planning Copyright activities; 3)
provide direction; 4) provide a focal point for all stakeholders of the firm; 5) resolve divergent views
among managers; 6) promote a sense of shared expectations among all managers and employees; 7)
project a sense of worth and intent to all stakeholders; 8) project an organized, motivated organization
worthy of support; 9) achieve higher organizational performance; and 10) achieve synergy among all
managers and employees.
BỔ SUNG CHAPTER 3:
CÂU 3-1The Purpose and Nature of an External Audit
The purpose of an external audit is to develop a finite list of opportunities that could benefit a firm as
well as threats that should be avoided. As the term finite suggests, the external audit is not aimed at
developing an exhaustive list of every possible factor that could influence the business; rather, it is
aimed at identifying key variables that offer actionable responses. Firms should be able to respond
either offensively or defensively to the factors by formulating strategies that take advantage of external
opportunities or that minimize the impact of potential threats. Figure 3-1 illustrates with white shading
how the external audit fits into the strategic-management process.
+Key External Forces External forces can be divided into five broad categories: (1) economic forces;
(2) social, cultural, demographic, and natural environment forces; (3) political, governmental, and legal
forces; (4) technological forces; and (5) competitive forces. Relationships among these organization are
depicted in Figure 3-2. External trends and events, such as rising food prices and people in African
countries learning about online services, significantly affect products, services, markets, and
organizations worldwide. Important Note: When identifying and prioritizing key external factors in
strategic planning, make sure the factors selected are (1) specific (i.e., quantified to the extent
possible); (2) actionable (i.e., meaningful in terms of having strategic implications) and (3) stated as
external trends, events, or facts rather than as strategies the firm could pursue. For example, regarding
actionable, “the stock market is volatile” is not actionable because there is no apparent strategy that the
firm could formulate to capitalize on that factor. In contrast, a factor such as “the GDP of Brazil is 6.8
percent” is actionable because the firm should perhaps open 100 new stores in Brazil. In other words,
select factors that will be helpful in deciding what to recommend the firm should do, rather than
selecting nebulous factors too vague for an actionable response. Similarly, “to expand into Europe” is
not an appropriate opportunity, because it is both vague and is a strategy; the better opportunity
statement would be “the value of the euro has increased 5 percent versus the U.S. dollar in the last
twelve months.”
Changes in external forces translate into changes in consumer demand for both industrial and consumer
products and services. External forces affect the types of products developed, the nature of positioning
and market segmentation strategies, the type of services offered, and the choice of businesses to acquire
or sell. External forces have a direct impact on both suppliers and distributors. Identifying and
evaluating external opportunities and threats enables organizations to develop a clear mission, to design
strategies to achieve long-term objectives, and to develop policies to achieve annual objectives.
The increasing complexity of business today is evidenced by more countries developing the capacity
and will to compete aggressively in world markets. Foreign businesses and countries are willing to
learn, adapt, innovate, and invent to compete successfully in the marketplace. Fast growth worldwide,
recently reported by Alibaba and Samsung, are examples
+The Process of Performing an External Audit
The process of performing an external audit must involve as many managers and employees as
possible. As emphasized in previous chapters, involvement in the strategic-management process can
lead to understanding and commitment from organizational members. Individuals appreciate having the
opportunity to contribute ideas and to gain a better understanding of their firm’s industry, competitors,
and markets. Key external factors can vary over time and by industry.
To perform an external audit, a company first must gather competitive intelligence and information
about economic, social, cultural, demographic, environmental, political, governmental, legal, and
technological trends. Individuals can be asked to monitor various sources of information, such as key
magazines, trade journals, and newspapers—and use online sources such as those listed later in this
chapter in Table 3-8. These persons can submit periodic scanning reports to the person(s) who
coordinate the external audit. This approach provides a continuous stream of timely strategic
information and involves many individuals in the external-audit process. Suppliers, distributors,
salespersons, customers, and competitors represent other sources of vital information.
After information is gathered, it should be assimilated and evaluated. A meeting or series of meetings
of managers is needed to collectively identify the most important opportunities and threats facing the
firm. A prioritized list of these factors must be obtained by requesting that all managers individually
rank the factors identified, from 1 (for the most important opportunity/ threat) to 20 (for the least
important opportunity/threat). Instead of ranking factors, managers could simply place a checkmark by
their most important “top 10 factors.” Then, by summing the rankings, or the number of checkmarks, a
prioritized list of factors is revealed. Prioritization is absolutely essential in strategic planning because
no organization can do everything that would benefit the firm; tough choices among good choices have
to be made.
+The Industrial Organization (I/O) View
The Industrial Organization view of strategic planning advocates that external (industry) factors are
more important than internal ones for gaining and sustaining competitive advantage. Proponents of the
I/O view, such as Michael Porter, contend that organizational performance will be primarily determined
by industry forces, such as falling gas prices that no single firm can control. Porter’s Five-Forces
Model, presented later in this chapter, is an example of the I/O perspective, which focuses on analyzing
external forces and industry variables as a basis for getting and keeping competitive advantage.
Competitive advantage is determined largely by competitive positioning within an industry, according
to I/O advocates. Managing strategically from the I/O perspective entails firms striving to compete in
attractive industries, avoiding weak or faltering industries, and gaining a full understanding of key
external factor relationships within that attractive industry. I/O theorists contend that external factors—
such as economies of scale, barriers to market entry, product differentiation, the economy, and level of
competitiveness—are more important than internal resources, capabilities, structure, and operations.
The I/O view has enhanced the understanding of strategic management. However, the authors contend
that it is not a question of whether external or internal factors are more important in gaining and
maintaining competitive advantage. In contrast, effective integration and understanding of both external
and internal factors is the key to securing and keeping a competitive advantage. In fact, as discussed in
Chapter 6, matching key external opportunities and threats with key internal strengths and weaknesses
provides the basis for successful strategy formulation.
3-1. Define and give an example of business analytics. Why is this technique becoming so widely
used in organizations today?
Business analytics is an MIS technique that involves using software to mine huge volumes of data to
help executives make decisions. Sometimes called predictive analytics, machine learning, or data
mining, this software enables a researcher to assess and use the aggregate experience of an
organization, a priceless strategic asset for a firm. The history of a firm’s interaction with its customers,
suppliers, distributors, employees, rival firms, and more can all be tapped with data mining to generate
predictive models. Leading business analytics companies include IBM and Oracle. Example: Grocery
stores have a card that customers use to get discounts, but these cards enable the company to collect
and analyze vast amounts of information about their customers. Information is vital for decision
making
3-4. Mathematically, how much more important is a weight of 0.08 compared to 0.05? Why is this
concept important in developing strategic-planning matrices?
A weight of 0.08 is 60% more important than a weight of 0.05 because (0.08−0.05)/0.05=0.6(0.08 -
0.05) / 0.05 = 0.6(0.08−0.05)/0.05=0.6. This concept is important in strategic-planning matrices
because small differences in weights reflect significant differences in the perceived importance of
factors, guiding better resource allocation and decision-making
3-5. Mathematically, how much more important is a rating of 4 compared to a rating of 3? Why
is this concept important in developing strategic-planning matrices?
A rating of 4 is 33% more important than a rating of 3 because (4−3)/3=0.33(4 - 3) / 3 =
0.33(4−3)/3=0.33. Understanding the relative importance of ratings helps prioritize strategies and
ensures accurate evaluation of competitive or external factors
3-11. If your CPM has three firms and they all end up with the same total weighted score, would
the analysis still be useful? Why?
Yes. The CPM reveals the relative strengths and weaknesses among rival firms across ten or more
strategic factors. This rating information can be essential to help formulate strategies. The aim is not to
arrive at a single number, but rather to assimilate and evaluate information in a meaningful way that
aids in decision making. If the total weighted scores by chance end up the same, there is no problem,
but that situation would suggest a very competitive industry and very price sensitive products/services.
3-16. Explain why it is appropriate for ratings in an EFE Matrix to be 1, 2, 3, or 4 for any
opportunity or threat.
Ratings in an EFE Matrix are based on effectiveness of a firm’s strategies in regards to the particular
factor. A rating of 4 means the firm’s response is superior, a 3 above average, a 2 average, and a rating
of 1 means the firm’s strategic response to the external factor is poor. Even though a factor may be a
huge threat as indicated by a high weight, the firm may be doing a great job handling that threat, thus
receiving a rating of 4. In contrast, even though some factor may represent a huge opportunity for the
firm, if the firm is doing a poor job capitalizing on that opportunity, then the rating would be 1. So, in
contrast to an IFEM to be presented in the next chapter, you should have 1, 2, 3, 4 anywhere up and
down the rating column in an EFEM.
3-18. In developing an EFE Matrix, would it be advantageous to arrange your opportunities
according to the highest weight, and do likewise for your threats? Explain.
Yes. Arranging factors according to importance would help the firm organize, evaluate, and utilize
external factors in the strategic planning process. It is not essential that the EFEM be structured in this
manner, but it definitely would be helpful for an analyst.
3-23. Discuss the following statement: Major opportunities and threats usually result from an
interaction among key environmental trends rather than from a single external event or factor
This is a TRUE statement that reveals how complex the external audit part of strategy formulation can
be. There are an infinite number of interactions among key external factors. For example, technological
advancements combined with changes in consumer behavior can create significant opportunities or
threats, emphasizing the need for a holistic analysis
3-31. Do you agree with I/O theorists that external factors are more important than internal
factors to a firm’s achieving competitive advantage? Explain both your and their positions.
Although I/O theorists suggest that industry factors are more important than internal factors, research
findings suggest that only 20% of a firm’s prof itability can be explained by industry factors and 36%
explained by internal factors. Regardless, it is not a question of whether external or internal factors are
more important. Rather, effective integration (matching) and understanding of both external and
internal factors is the key to securing and keeping a competitive advantage
3-32. Define, compare, and contrast the weights versus ratings in an EFE Matrix.
The weight in an EFE Matrix indicates the relative importance of that factor to being successful in the
firm’s industry. The rating indicates how effectively the firm’s current strategies respond to each key
external factor. Thus, the weight allows more important factors to receive more consideration, while the
rating evaluates how well the firm handles each factor. Weights are industry- based; ratings are
company-based. ( Weights indicate the relative importance of a factor, summing to 1.0 across the
matrix. Ratings measure how effectively the firm responds to a factor (1 to 4 scale).
Weights are industry-based, while ratings are company-specific, making both essential for evaluating
and comparing strategies)
3-34. List the 10 external areas that give rise to opportunities and threats.
The ten external areas are economic, social, cultural, demographic, natural environment, political,
government, legal, technological, and competitive