Strategy needs to take account of both the requirements of the firm's external environment and the firm's own resources and capabilities.Resources and capabilities rather than requirements of the external environment offer a stronger basis for strategy formulation when:
A)The firm is engaged in the exploitation of natural resources such as petroleum or metal.
B)The external environment is in a state of flux.
C)When the firm is supplying producer goods rather than consumer goods.
D)When the firm is a multinational corporation.

Question

Quizplus · Accepted Answer

When the external environment is in a state of flux, it is difficult to rely solely on external requirements for strategy formulation. In such a situation, a firm's resources and capabilities offer a more reliable foundation for formulating effective strategies. The other options listed may also require a consideration of external factors in strategy formulation, but B is the best choice as it directly addresses a situation where external requirements are uncertain or changing.

Strategy Needs to Take Account of Both the Requirements of the Firm's