Strategic Management: Why the Essence of Strategy Is Saying No
A tour of strategic management, from missions and five forces to resources, rivalry, acquisitions and the balanced scorecard.
Try 3 questions
1. A mission statement, as distinct from a vision statement, mainly describes what?
- Where the organization hopes to be in decades
- What the organization does and for whom
- The financial targets for the coming year
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Answer: What the organization does and for whom
The mission states the organization's present purpose and who it serves; the vision describes the desired future state.
2. Hamel and Prahalad's idea of 'strategic intent' describes an ambition that does what?
- Matches exactly what current resources allow
- Copies the goals of the industry leader
- Deliberately outstrips the firm's current resources
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Answer: Deliberately outstrips the firm's current resources
Strategic intent is a stretch ambition far beyond present resources, meant to force the firm to build new capabilities.
3. Theodore Levitt argued railroads declined partly because they defined their business as 'railroads'. Why did that definition hurt them?
- It forced them to set prices too low
- It hid substitutes serving the same transport need
- It made their tracks too costly to maintain
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Answer: It hid substitutes serving the same transport need
In 'Marketing Myopia', Levitt said railroads saw themselves in the railroad business, not transportation, so they ignored cars, trucks and planes.
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