MICROLINK INFORMATION TECHNOLOGY COLLEGE

DEPARTMENT OF MBA

partment Of Accounting

BUSINESS POLICY AND

STRATEGIC MANAGEMENT ASSIGNMENT

Prepared By: HELEN ALEM

Id No: 0021/20

Submitted To: DR.HAILAY

JULAY. 2020
CHAPTER 1 BUSINESS POLICY AND STRATEGIC MANAGEMENT
Assignment

1. Distinguish between long-range planning and strategic planning.

2. Describe the three activities that comprise strategy evaluation.

3. Your college /university has fierce competitors. List three external opportunities
and three external threats that face your college/ university.

4. List reasons why objectives are essential for organizational success.

5. What is the fundamental difference between business strategy and military

strategy in terms of basic assumptions?

6. Explain why the strategic management class is often called a “capstone course.”

7. Why is strategy implementation often considered the most difficult stage in the
strategic management process?

8. Who are the major competitors of your college or university? What are their
strengths and weaknesses? What are their strategies? How successful are these
institutions compared to your college?
SOLUTION

1. The term strategic management is used synonymously with the term strategic
planning. strategic planning referring only to strategy formulation. The
purpose of strategic management is to exploit and create new and different
opportunities for tomorrow; long-range planning, in contrast, tries to
optimize for tomorrow the trends of today .
2. Three fundamental strategy-evaluation activities are
1. reviewing external and internal factors that are the bases for current
strategies
2. measuring performance
3. taking corrective actions.

4. Objectives are essential for organizational success because they state

direction; aid in evaluation; create synergy; reveal priorities; focus coordination;
and provide a basis for effective planning, organizing, motivating, and controlling
activities.

5. a fundamental difference between military and business strategy is that

business strategy is formulated, implemented, and evaluated with an
assumption of competition, whereas military strategy is based on an
assumption of conflict.
6. The strategic management is also called a capstone course or business policy because it
integrates materials from all the business ; management, marketing, production &
operations, OR This course integrates material from all business courses.
7. Strategy implementation Often considered to be the most difficult stage
BECAUSE Implementing strategy means mobilizing employees and managers
to put formulated strategies into action. in strategic management, strategy
implementation requires personal discipline, commitment, and sacrifice.
Successful strategy implementation hinges upon managers’ ability to motivate
employees, which is more an art than a science.
8.
CHAPTER 2 BUSINESS POLICY AND STRATEGIC MANAGEMENT
Assignment

1. What are some different names for “mission statement,” and where will
you likely find a firm’s mission statement?
2. Explain why a mission statement should not include monetary amounts,
numbers, percentages, ratios, goals, or objectives.
3. Do local service stations need to have written vision and mission
statements? Why or why not?
4. In your opinion, what are the three most important components that should
be included when writing a mission statement? Why?
5. How would the mission statements of a for-profit and a nonprofit
organization differ?
6. Write a vision and mission statement for an organization of your choice.
7. Who are the major stakeholders of the bank that you do business with
locally? What are the major claims of those stakeholders?
8. List seven characteristics of a mission statement.
9. List eight benefits of having a clear mission statement.
10. How often do you think a firm’s vision and mission statements should be
changed?
 SOLUTION
1. Is also called as a creed statement,
a statement of purpose, a statement of philosophy, a statement of beliefs, a
statement of business principles , or a statement “defining our business,”A good
place to look for a company’s mission statement is on the firm’swebsite or its annual
report, but many organizations also have the statement engraved and publically visible
at its stores or facilities
2. A mission statement has three main objectives which needs to be fulfilled while deciding
it. It is a broad qualitative direction for the company's tactics, strategy and operations,
hence quantifying it or explaining it numerically is not the idea. Firstly, it allows for the
generationand consideration of a range of easy 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.
3. Less formality and detail characterize strategic management in small businesses such as
a local service station. However local service stations are not immune to competitive
pressures,changes in technology,changes in demographic factors,and resistance to
change. Therefore it is recommended that even the smallest organization develop written
vision and mission statement to enhance efforts to secur bank financing and to develop
good supplier,customer and employee relationships.
4. 1. Customers 2. Products or Services 3. Markets WHY ? Because a mission
statement is often the most visible and public part of the strategic-management
process
5. As their names indicate, nonprofit and for-profit businesses vary greatly in some aspects
of their operation and most definitely in the overall purpose of their existence. While the
aim of for-profit organizations is to maximize profits and forward these profits to the
company's owners and shareholders, nonprofit organizations aim to provide society's
needs. Non-profit organizations have no owners. Instead of maximizing profits, which
means maximizing revenues while minimizing costs, they are more concerned with
ensuring the revenue is greater than costs. This ensures that the nonprofit can still
provide society's needs." Another key element that makes a nonprofit
organization different than a for-profit is that the company's income is never to be
distributed to any owners "but is to be recycled back into the nonprofit corporation's
public benefit mission and activities.
6. vision and mission statement of ethiopia central bank
 mission of the bank maintain price and exchange rate stablity,to foster a
sound financial system and undertake such other functions as are conducive
to the economic growth of ethiopia
 vision of the bank to be one of the strongest and most reputable central bank in
Africa.
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8. seven characteristics of a mission statement
1.Customers—Who are the firm’s customers?
2. Products or services—What are the firm’s major products or services?
3. Markets—Geographically, where does the firm compete?
4. Technology—Is the firm technologically current?
5. Concern for survival, growth, and profitability—Is the firm committed to growth and
financial soundness?
6. Philosophy—What are the basic beliefs, values, aspirations, and ethical priorities of
the firm?
7. Self-concept—What is the firm’s distinctive competence or major competitive
advantage?
9. eight benefits of having a clear mission statement
1. Achieve clarity of purpose among all managers and employees.
2. Provide a basis for all other strategic planning activities, including the internal and
external assessment, establishing objectives, developing strategies, choosing
among alternative strategies, devising policies, establishing organizational
structure, allocating resources, and evaluating performance.
3. Provide direction.
4. Promote a sense of shared expectations among all managers and employees
5. Project a sense of worth and intent to all stakeholders.
6. Project an organized, motivated organization worthy of support.
7. Achieve higher organizational performance.
8. Achieve synergy among all managers and employees
10.Vision and mission statements always should be subject to revision, but,
if carefully prepared, they will require infrequent major changes. Organizations
usually. reexamine their vision and mission statements annually. Effective mission
statements stand the test of time. If you're developing a business or organization,
determining a direction and establishing goals is critical to your success. Creating
a mission or vision statement that's specific to your venture helps your business
or organization move forward. As your organization evolves, you might feel
tempted to change your mission or vision. However, mission or vision statements
explain your organization's foundation, so change should be kept to a minimum
.
CHAPTER 3 BUSINESS POLICY AND STRATEGIC MANAGEMENT
Assignment
1. 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.
2. In developing an EFE Matrix, would it be best to have 10 opportunities and 10 threats, or
would 17 opportunities (or threats) be fine with 3 of the other to achieve a total of 20 factors as
desired?
3. Could/should critical success factors in a CPM include external factors? Explain.
4. Identify a recent economic, social, political, or technological trend that significantly affects the
local Pizza Hut.
5. 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.
6. Identify two industries experiencing rapid technological changes and three industries that are
experiencing little technological change. How does the need for technological forecasting differ
in these industries? Why?
7. Construct an EFE Matrix for an organization of your choice.
8. List the 10 external areas that give rise to opportunities and threats.

SOLUTION
1. Assign a weight to each factor. The value of each weight should be between 0 and 1
(or alternatively between 10 and 100 if you use the 10 to 100 scale). Zero means the
factor is not important. One or hundred means that the factor is the most influential
and critical one.  The total value of all weights together should equal 1 or 100
2.
CHAPTER 4 BUSINESS POLICY AND STRATEGIC MANAGEMENT
Assignment
1. Think of an organization you are very familiar with. List three resources of that entity that are
empirical indicators.
2. Illustrate how value chain activities can become core competencies and eventually distinctive
competencies. Give an example for an organization you are familiar with.
3. Which of the three basic functions of finance/accounting do you feel is most important in a small
electronics manufacturing concern? Justify your position.
4. After conducting an internal audit, a firm discovers a total of 100 strengths and 100 weaknesses.
What procedures then could be used to determine the most important of these? Why is it important to
reduce the total number of key factors?
5. Identify cultural products at your college or college/university. Do these products, viewed
collectively or separately, represent a strength or weakness for the organization?
6. Do you agree or disagree with the RBV theorists that internal resources are more important for a
firm than external factors in achieving and sustaining competitive advantage? Explain your and their
position.
Answer he Resource based view (RBV) analyzes and interpret internal resources of the organizations and
emphasizes resources and capabilities in formulating strategy to achieve sustainable competitive advantages.
Resources may be considered as inputs that enable firms to carry out its activities. Internal resources and capabilities
determine strategic choices made by firms while competing in its external business environment. According to RBV,
not all the resources of firm will be strategic resources. Competitive advantage occurs only when there is a situation
of resource heterogeneity (different resources across firms) and resource immobility (the inability of competing
firms to obtain resources from other firms).
7. Define and explain value chain analysis (VCA).
value chain analysis (VCA) is a process where a firm identifies its primary and support
activities that add value to its final product and then analyze these activities to reduce costs
or increase differentiation.
Value chain
 represents the internal activities a firm engages in when transforming inputs into outputs.

8. Explain benchmarking
Benchmarking is a process of measuring the performance of a company’s products, services, or processes
against those of another business considered to be the best in the industry, aka “best in class.” The point
of benchmarking is to identify internal opportunities for improvement. By studying companies with
superior performance, breaking down what makes such superior performance possible, and then
comparing those processes to how your business operates, you can implement changes that will yield
significant improvements.

Solution
CHAPTER 5 BUSINESS POLICY AND STRATEGIC MANAGEMENT
Assignment
1. In order of importance, list six “characteristics of objectives.”
2. In order of importance, list six “benefits of objectives.”
3. Give recent examples of market penetration, market development, and product development.
4. Give recent examples of forward integration, backward integration, and horizontal integration.
5. Give recent examples of related and unrelated diversification.
6. Give recent examples of joint venture, retrenchment, divestiture, and liquidation.
7. What are the major advantages and disadvantages of diversification?
8. What are the major advantages and disadvantages of an integrative strategy?
Solution
1. characteristics of objectives
 Quantitative
 Measurable
 Realistic
 Understandable
 Challenging
 Hierarchical
2. six benefits of objectives
 Allow synergy
 Aid in evaluation by serving as standards
 Establish priorities
 Reduce uncertainty
 Minimize conflict
 Stimulate exertion
3. A market penetration strategy seeks to increase market share for present
products or services in present markets through greater marketing efforts.
This strategy is widely used alone and in combination with other strategies.
Market penetration includes increasing the number of salespersons,
increasing advertising expenditures, offering extensive sales promotion
items, or increasing publicity efforts These five guidelines indicate when market
penetration may be an especially effective strategy:

 When current markets are not saturated with a particular product or service.
 When the usage rate of present customers could be increased significantly.
 When the market shares of major competitors have been declining while total
industry sales have been increasing.
 When the correlation between dollar sales and dollar marketing expenditures historically
has been high.
Market Development
Market development involves introducing present products or services into new geographic
areas.
When new channels of distribution are available that are reliable, inexpensive, and
of good quality.
 When an organization is very successful at what it does.
 When new untapped or unsaturated markets exist.
 When an organization has the needed capital and human resources to manage
expanded operations.
 When an organization has excess production capacity.
 When an organization’s basic industry is rapidly becoming global in scope.
Product Development
Product development is a strategy that seeks increased sales by improving or modifying
present products or services. Product development usually entails large research and development expenditures
These five guidelines indicate when product development may be an especially
effective strategy to pursue
 When an organization has successful products that are in the maturity stage of the
product life cycle; the idea here is to attract satisfied customers to try new (improved)
products as a result of their positive experience with the organization’s present
products or services.
 When an organization competes in an industry that is characterized by rapid
technological developments.
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5. Related Diversification
 Six guidelines for when related diversification may be an effective strategy are as
 When an organization competes in a no-growth or a slow-growth industry.
 When adding new, but related, products would significantly enhance the sales of
current products.
 When new, but related, products could be offered at highly competitive prices.
 When new, but related, products have seasonal sales levels that counterbalance
an
 organization’s existing peaks and valleys.
 When an organization’s products are currently in the declining stage of the
product’s life cycle
 When an organization has a strong management team.
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