Question Tag: Business Strategy

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  • 14 Marks

BMIS – Nov 2021 – L1 – Q4a – Introduction to business strategy

Explain the strategic planning process and its importance for organizations.

Strategic Planning Process is important for the strategic management of companies. Organisations from both the private and public sectors are increasingly embracing the practice of strategic planning in anticipation that it will translate into improved performance. It is practised widely, formally and informally.

Required:
Explain the strategic planning process. (14 marks)

Strategic Planning Process

  1. Mission and Objectives:
    The first step in the strategic planning process is to determine the mission and objectives of the entity. This step involves defining the organization’s purpose, reason for existence, and the function it seeks to perform in society.
  2. Internal Assessment:
    Internal assessment involves reviewing the organization’s existing structures, skills, resources, and processes. This step helps in understanding the current capabilities and potential areas of improvement within the organization.
  3. External Environment Analysis:
    The next stage in the process is an analysis of the external environment factors that might influence the organization’s operations. This includes assessing market trends, competition, regulatory environment, and other external forces.
  4. Corporate Appraisal:
    Corporate appraisal combines the internal and external environment assessments to evaluate the organization’s strengths, weaknesses, opportunities, and threats (SWOT analysis). This step provides a comprehensive view of the organization’s position in the market.
  5. Strategy Formulation:
    Based on the corporate appraisal, the organization identifies and selects from among the favorable strategies available for implementation. This involves choosing the best strategic options that align with the organization’s goals and objectives.
  6. Strategy Implementation:
    At this stage, the chosen strategy is implemented across the organization. This involves allocating resources, assigning responsibilities, and ensuring that the strategy is effectively put into action.
  7. Monitoring and Evaluation:
    During the implementation of the strategy, it is necessary to periodically review and monitor the progress. This step involves assessing the effectiveness of the strategy and making adjustments as needed to address any challenges or changes in the environment.

(7 points @ 2 marks each = 14 marks)

  • 15 Marks

BMIS – Nov 2021 – L1 – Q3a – The external environment

Explain the elements of the external environment that impact business organizations.

An organisation is described as an open system because it impacts and is also impacted by two sets of environments. It imports raw materials from the environment, transforms them into goods and services and then exports them back into the environment for the satisfaction of customers’ needs.

Required:
Explain FIVE (5) elements of the external environment of a business organisation. (15 marks)

Elements of the External Environment

  1. Political/Legal Factors:
    An organisation’s political/legal climate consists of local and state laws on taxation, employment, exchange rates, and foreign trade regulations. Where these are favorable, it impacts positively on the entity’s operations and vice versa.
  2. Economic Factors:
    The operations of a business organisation are influenced by the strength and stability of the national economy. Some economic variables which may have a bearing on an organisation are interest rates, levels of employment, rate of inflation, income levels of consumers, the strength of the country’s currency against major trading currencies.
  3. Socio-Cultural Factors:
    Socio-cultural factors refer to the customs and values of the society in which the business operates, such as lifestyle changes, age distribution, life expectancy, and consumer behavior. In deciding on the strategies to pursue, the organisation must constantly pay attention to these factors since they influence its activities.
  4. Technological Factors:
    Technological factors include the availability or state of technology. These affect a business organisation because a firm with the resources and ability to adopt new and improved technology will be more competitive. Technological factors that influence business operations include new patents, speed of change and adoption of new technology, and level of spending on research and development.
  5. Globalisation:
    To the extent that the world has become a global village, the operations of a business organisation in one country tend to be affected by conditions prevailing in other countries. These, therefore, have profound implications for every business entity in the conduct of its activities.

(5 points @ 3 marks each = 15 marks)

  • 8 Marks

BMIS – Nov 2016 – L1 – Q4a – Business and organisational structure

State reasons that may influence a company or government to undertake a divestiture program.

State FOUR reasons that may influence a company or government to undertake a divestiture programme.

(8 marks)

  • Raise funds: Divestiture programmes are undertaken to raise funds for the company or the government.
  • Focus on core activities: They enable the company to concentrate on its core activities.
  • Bankruptcy process: Divestiture may be part of a company’s bankruptcy process.
  • Lack of synergy: Companies undertake divestiture if there is no synergy between the divested assets and the company’s core activities.

(Any 4 x 2 marks = 8 marks)

  • 20 Marks

BMIS – Nov 2016 – L1 – Q3 – Introduction to business strategy

Discuss reasons for and against investing in the strategic planning process in a multinational company.

At a recent board meeting of a multinational company, there was a heated debate on whether the company should continue to invest resources in strategic planning processes. A section of the board members believed that it is worth investing, whilst the other section opposed that decision because they considered such an activity as a waste of resources.

Your task is to state:

a) FIVE reasons why you think the company must continue to invest in the strategic planning process. (10 marks)

b) FIVE reasons why it might not be necessary for the company to invest in the strategic planning process. (10 marks)

a) Reasons for continuing to invest in the strategic planning process:

  • Risk reduction: Strategic planning helps the company reduce the risks associated with its operations by considering various factors.
  • Reduction of uncertainty: It reduces uncertainty as personnel will know the results expected of them.
  • Realistic targets: The company can set achievable targets by considering its strengths and weaknesses before setting such targets.
  • Guidance: Strategic planning serves as a guide in the operations of the company.
  • Commitment: It helps gain loyalty and commitment from employees as they will be involved in the planning process.
    (Any 5 x 2 marks = 10 marks)

b) Reasons against investing in the strategic planning process:

  • Waste of time: The company may consider it a waste of time due to the extensive time involved in the planning process.
  • Fear of failure: There may be a fear that the strategic planning process will fail.
  • Lack of expertise: The company might not have the personnel with the expertise to undertake strategic planning.
  • Complacency: The company may be satisfied with its current performance and see no need to plan.
  • Uncertainty: The fast-changing future might render the planning process unnecessary.
    (Any 5 x 2 marks = 10 marks)

Grand total: 20 marks

  • 10 Marks

BMIS – Nov 2017 – L1 – Q7b – Operations strategy

b) Quality is the totality of features and characteristics of a product or service which bears on its ability to meet stated or implied needs. Required: i) Distinguish between Quality Management, Quality Assurance, and Quality Control. (6 marks) ii) Outline any TWO of the five general activities involved in quality management systems. (4 marks)

b) Quality is the totality of features and characteristics of a product or service which bears on its ability to meet stated or implied needs.

Required:
i) Distinguish between Quality Management, Quality Assurance, and Quality Control.
(6 marks)

ii) Outline any TWO of the five general activities involved in quality management systems.
(4 marks)

i) Distinction Between Quality Management, Quality Assurance, and Quality Control:

  • Quality Management: Quality management is the overall process of controlling activities to ensure that products or services are fit for their purpose and meet specified standards. It encompasses both quality assurance and quality control.
    (2 marks)
  • Quality Assurance: Quality assurance focuses on the processes and procedures used in production or service delivery, aiming to prevent defects by establishing and following standards.
    (2 marks)
  • Quality Control: Quality control involves the inspection and testing of products or services to ensure they meet the required quality standards. It focuses on identifying and correcting defects after they occur.
    (2 marks)

ii) General Activities Involved in Quality Management Systems:

  1. Planning and Establishing Standards: Setting the standards of quality for a product or service, including procedures and methods that ensure these standards are met.
    (2 marks)
  2. Monitoring and Measuring Quality: Using suitable instruments and techniques to monitor and measure the actual quality of products or services against the established standards.
    (2 marks)
  • 10 Marks

BMIS – Nov 2017 – L1 – Q6b – Finance, R&D, and marketing strategies

Describe situations that would compel an organization to reconsider its marketing efforts.

b) Identify and describe FIVE situations which would compel an organization to give serious consideration to its marketing efforts.
(10 marks)

  1. Sales Decline: A decline in sales would indicate the need for the marketing team to reassess and intensify its marketing efforts to regain market share.
  2. Unsatisfactory Growth in Sales or Profits: When the rate of growth of sales or profits is deemed unsatisfactory, the organization must reconsider its marketing strategies to drive better results.
  3. Increased Competition: A rise in competition necessitates enhanced marketing efforts to retain existing customers and attract new ones. Without such efforts, the organization risks losing market share to competitors.
  4. Changes in Customer Purchasing Behavior: Significant changes in how customers purchase products or services would compel the organization to adapt its marketing efforts to align with new consumer behavior.
  5. Rising Marketing Costs: If the costs associated with marketing, including sales and distribution expenses, are increasing, it indicates the need to reassess and possibly optimize marketing strategies to maintain profitability.

(5 points @ 2 marks each = 10 marks)

  • 10 Marks

BMIS – Nov 2017 – L1 – Q6a – Finance, R&D, and marketing strategies

Explain the marketing concept, marketing mix, and marketing research in business strategy.

a) Explain the following:
i) Marketing Concept
ii) Marketing Mix
iii) Marketing Research
(10 marks)

i) Marketing Concept:
The marketing concept is a management outlook or philosophy that accepts that the key task of an organization is to determine the needs, wants, and values of a target market and to adapt the organization to delivering the desired satisfaction more effectively and efficiently than its competitors. The customer is the focus of all activities within the organization.
(4 marks)

ii) Marketing Mix:
The marketing mix refers to the set of controllable variables and their levels that a firm uses to influence its target market. These are commonly known as the 4Ps: Product, Price, Place, and Promotion. The elements of the marketing mix must be mutually supporting and consistent with each other to be effective.
(3 marks)

iii) Marketing Research:
Marketing research involves the objective gathering, recording, and analyzing of all facts relating to the transfer and sale of goods and services from the producer to the consumer. It is a systematic approach to understanding market dynamics, customer preferences, and the effectiveness of marketing strategies.
(3 marks)

  • 5 Marks

BMIS – Nov 2017 – L1 – Q1c – Introduction to business strategy

Distinguish between a strategic plan and an operational plan in an organization.

c) Good links between operational and strategic planning help in the execution of corporate strategies. However, managers gain from knowing the difference between strategic and operational objectives because this distinction plays a major role in the conversion of an overarching vision into specific tasks.

Required:
Distinguish between a strategic plan and an operational plan.
(5 marks)

  • Strategic Plan: A strategic plan is a long-term plan developed by the organization to achieve its objectives and covers the entire firm. It typically spans about five years and is stated in general terms.
  • Operational Plan: An operational plan, on the other hand, is a short-term plan developed by a middle manager that concentrates on a specific functional area. It is stated in specific terms and covers a shorter period.

(5 marks)

  • 5 Marks

BMIS – May 2017 – L1 – Q2b – Operations strategy

Outline the five stages in the development of a product or service.

b) Knowing where your products or services are in their development cycle will help you determine refinements or adjustments you may need to make to align them with the vision and strategy you have already developed.

Required:
Outline the FIVE stages that are often followed in the development of a product and service. (5 marks)

  • Customer Needs: The product is designed to fulfill particular customer needs (such as quality, price, or design).
  • Screening: The concept should be considered carefully to ensure it meets certain criteria such as profitability or taking market share.
  • Design: The design process can be in different forms such as building an electronic or physical prototype. Value engineering procedures may be followed to ensure all components add value.
  • Time-to-Market: This is the time a product or service takes to get to the market place. A short time span is desirable to reduce cost and to get ahead of the competition.
  • Testing: The product or service should be tested to check that it works, that it meets the needs of the customer, and that the customer likes it.
  • 10 Marks

BMIS – Dec 2023 – L1 – Q1a – Competitive forces and markets

Explains five benefits of forming a strategic alliance in the oil exploration industry.

The Gana Oil Company was granted a license by the government to conduct its own oil explorations and drilling in Ghana. The Chief Executive Officer (CEO) on realizing the nature and the risks involved in the explorations and drilling venture decided to form an alliance with Emi Explorations International to implement the venture.

Required:

Explain FIVE (5) benefits Gana Oil Company will gain from the CEO’s decision.

Benefits of the Decision to Form an Alliance:

  1. Risk Reduction:
    The decision to form an alliance with Emi Explorations will enable Gana Oil to share and reduce the risks associated with the venture, which is considered very risky.
    (2 marks)
  2. Cost Reduction:
    The alliance will allow Gana Oil to share the costs involved in engaging in the venture, which is considered a capital-intensive project.
    (2 marks)
  3. Political Acceptability:
    An alliance is a form of business arrangement accepted by the government of Ghana. The government prefers a business arrangement that offers a win-win outcome to the country and the foreign partner rather than allowing the foreign firm to take all the benefits associated with such a venture.
    (2 marks)
  4. Access to Expertise:
    The alliance will enable Gana Oil to have access to expertise in the exploration and drilling business that might be possessed by Emi Explorations. Emi Explorations is recognized as a leader in oil explorations with facilities and operations in many countries globally.
    (2 marks)
  5. Access to Financial Resources:
    The alliance of Gana Oil with Emi Explorations will enable Gana Oil to access additional capital for the project. A partnering firm is expected to make financial contributions to facilitate the smooth operations of the venture.
    (2 marks)

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