Describe the differences in growth strategies based on concentration, related diversification, and unrelated diversification.
FINAL EXAM MATERIAL Chapter 7 Questions 1. [http://www.bezern.com/] What is the “business portfolio” of a corporation? Distinguish the terms “corporation” and “strategic business unit”. [http://www.bezern.com/] 2. [http://www.bezern.com/] Explain the three generic strategic directions that the corporate center can follow in managing its business portfolio. [http://www.bezern.com/] 3. [http://www.bezern.com/] Under what circumstances is corporate management likely to employ a stabilization or a retrenchment portfolio strategy? 4. [http://www.bezern.com/] Describe the differences in growth strategies based on concentration, related diversification, and unrelated diversification. [http://www.bezern.com/] 5. [http://www.bezern.com/] How might a corporation assess the degree of relatedness of a proposed diversification move in its business portfolio? Why does related diversification often work better than unrelated diversification? 6. [http://www.bezern.com/] Describe several examples of synergy that may be possible among the SBU’s in a related diversified business portfolio. [http://www.bezern.com/] a. [http://www.bezern.com/] 7. [http://www.bezern.com/] Compare vertical integration and horizontal expansion within an industry value chain. [http://www.bezern.com/] 8. [http://www.bezern.com/] Describe the components in a vertically integrated healthcare delivery system and how they interact with each other. [http://www.bezern.com/] a. [http://www.bezern.com/] 9. [http://www.bezern.com/] Explain the different forms that a retrenchment can take – ranging from the most modest to the most severe. [http://www.bezern.com/] 10. [http://www.bezern.com/] Explain how portfolio analysis matrices work and their function in making portfolio management decisions. [http://www.bezern.com/] Use either the BCG Growth-Share matrix or the GE Business Screen as examples. [http://www.bezern.com/] a. [http://www.bezern.com/] 11. [http://www.bezern.com/] What is meant by the “parenting style” of the managers of a multi-SBU corporation? Chapter 8 Questions 1. [http://www.bezern.com/] Explain the differences in strategies formulated at the corporate and at the SBU levels. [http://www.bezern.com/] 2. [http://www.bezern.com/] Describe the possible roles that corporate management might play in the strategic planning and management process within individual SBUs in its portfolio. [http://www.bezern.com/] Discuss also the tensions between corporate and SBU management over these issues. [http://www.bezern.com/] 3. [http://www.bezern.com/] Explain the five generic types of growth strategy available to individual SBUs. [http://www.bezern.com/] 4. [http://www.bezern.com/] Explain the concept of “competitive advantage” and the purpose it serves in planning and managing strategy. [http://www.bezern.com/] What is the importance of adding the term “sustainable” to competitive advantage? 5. [http://www.bezern.com/] What are the four generic business strategies defined by Michael Porter? Explain also a fifth strategy that is a combination of those four and that was rejected by Porter. [http://www.bezern.com/] 6. [http://www.bezern.com/] Describe five methods by which a business can build a “low-cost leadership” strategic position. [http://www.bezern.com/] 7. [http://www.bezern.com/] What are some problems that can develop with a low-cost leadership strategy, leading to poor performance? 8. [http://www.bezern.com/] What are the four essential criteria of a differentiation strategy that results in a sustainable competitive advantage? 9. [http://www.bezern.com/] What are some problems that can develop with a differentiation strategy, leading to poor performance? 10. [http://www.bezern.com/] Explain the concept of a “hybrid” strategy. [http://www.bezern.com/] Why did Porter think that such a strategy could not work, and how have some businesses found ways to make the strategy successful? 11. [http://www.bezern.com/] Discuss the concept of a “focus” strategy and its connection to the definition of individual market segments. [http://www.bezern.com/] 12. [http://www.bezern.com/] What are some of the generic ways in which a business can respond to the strategic initiatives of its competitors? Chapter 9 Questions 1. [http://www.bezern.com/] Which is more important – the formulation of a strategy or its implementation? Hint: either answer is correct as long as it is well explained. [http://www.bezern.com/] 2. [http://www.bezern.com/] In what ways could an organization’s culture affect, positively or negatively, the success of its strategic plans? 3. [http://www.bezern.com/] Describe the three basic forms of organizational structure and the strategic conditions to which they are best suited. [http://www.bezern.com/] i. [http://www.bezern.com/] 4. [http://www.bezern.com/] Describe the three ways that personnel in functional areas can provide valuable inputs to the strategic planning and management process. [http://www.bezern.com/] 5. [http://www.bezern.com/] Give three examples of functional area strategies that could be used to support an organization-wide strategy. [http://www.bezern.com/] 6. [http://www.bezern.com/] Explain the several steps in the process by which a strategic plan is broken down into tasks and activities that can be performed by individual employees. [http://www.bezern.com/] 7. [http://www.bezern.com/] Describe a multi-step process for allocating financial resources among several strategic projects, in addition to other non-strategic capital investment proposals. [http://www.bezern.com/] 8. [http://www.bezern.com/] A well-conceived strategic plan can fail through mistakes made in its implementation. [http://www.bezern.com/] What are at least five ways in which strategy implementation can go wrong? Chapter 10 Questions 1. [http://www.bezern.com/] Exactly what is an organization paying attention to through its strategic monitoring program? 2. [http://www.bezern.com/] What are some of the elements and trends in the health care industry that make strategic monitoring especially important? 3. [http://www.bezern.com/] List 10 significant developments or changes in an organization’s competitive or market environment that might be discovered by a good strategic monitoring program. [http://www.bezern.com/] 4. [http://www.bezern.com/] Compare and contrast the monitoring of trends and events in the past, the present, and the future. [http://www.bezern.com/] Explain how monitoring can occur in each of those three time frames and their significance to the strategy implementation process. [http://www.bezern.com/] 5. [http://www.bezern.com/] Describe the steps that a managed care organization might follow in setting up a strategic monitoring program. [http://www.bezern.com/] Explain how those steps and the resulting program might differ in a small physician group practice. [http://www.bezern.com/] 6. [http://www.bezern.com/] What are the differences in strategic monitoring programs at the level of multi-SBU corporations and individual SBUs? 7. [http://www.bezern.com/] What policies or procedures might a health care organization use to decide when changes in its external environment require some type of change or adjustment in its strategies? 8. [http://www.bezern.com/] Discuss some of the changes that an organization might make to an ongoing strategy in response to developments it has observed in its external environment. [http://www.bezern.com/] Chapter 11 Questions 1. [http://www.bezern.com/] Describe the four primary purposes of a professional strategic financial management function in an organization. [http://www.bezern.com/] 2. [http://www.bezern.com/] Describe the principal responsibilities of the corporate finance department of a modern professionally-run organization. [http://www.bezern.com/] 3. [http://www.bezern.com/] List and briefly explain the most important sources of capital financing for both for-profit and not-for-profit corporations. [http://www.bezern.com/] 4. [http://www.bezern.com/] What are the advantages and disadvantages of relying on debt for capital financing? 5. [http://www.bezern.com/] What are the advantages and disadvantages of relying on equity for capital financing? 6. [http://www.bezern.com/] Explain the concept of “capital structure” and its relevance to the strategic financial management. [http://www.bezern.com/] 7. [http://www.bezern.com/] Define the term “creditworthiness” and explain its importance to the purposes of strategic financial management. [http://www.bezern.com/] 8. [http://www.bezern.com/] What are some of the factors that credit rating firms take into account in assigning ratings to individual businesses? 9. [http://www.bezern.com/] Discuss the interplay between maintenance of a business’s creditworthiness and investment of its capital funds in often risky strategies. [http://www.bezern.com/] 10. [http://www.bezern.com/] Review some of the mistakes that are often made in managing the financial component of strategic planning and management. [http://www.bezern.com/]