Question 1

According to Hamel and Prahalad, as cited in the text, the main purpose of strategic planning is to help companies understand how they can "compete for the future."

Accepted Answer

Hamel and Prahalad argued that strategic planning helps companies to understand how they can shape their future by being proactive and innovative in the face of competing forces.

Question 2

One review of the literature, discussed in the text, found that there was very little evidence supporting the view that formal matrix methods, such as BCG, can be used to improve the quality of strategic decision making.

Accepted Answer

The text mentions that a review of the literature found very little evidence supporting the effectiveness of formal matrix methods like BCG in improving strategic decision making.

Question 3

The term, core competency is a synonym for internal strength.

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Question 4

Outline the arguments, presented in the text, in favour of and against the use of SWOT analysis. Where do you fit within these arguments?

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Question 5

Mission statements should be realistic and general in nature.

Accepted Answer

Mission statements should be realistic but also specific and clear in their goals and how the organization intends to achieve them, not general.

Question 6

The alternative expansion strategies for a company using the product/market expansion grid are market penetration, market development, product development and diversification. Briefly outline each of the strategies and give examples of the companies using different strategies.

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Question 7

Even when a business or product is profitable, if the organisation has no core competencies in managing that business or product, it may not be profitable in the long term.

Accepted Answer

Profits can be short-lived if a company lacks the core competencies required to manage the business or product effectively. Over time, this can lead to a decline in profitability and ultimately, failure. Therefore, having core competencies in managing a business or product is essential for long-term success.

Question 8

Describe the strategic planning process. In your answer identify the four steps of strategic planning.

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Question 9

A robust business portfolio should include a broad range of products or SBUs.

Accepted Answer

A robust business portfolio should have a diverse range of products or Strategic Business Units (SBUs) to minimize the risk of relying on a single product or market. This enables the business to be prepared for changes in customer preferences, market trends, technology, and competition. Having a broad portfolio helps to spread out the risk and potential returns across multiple products or SBUs.

Question 10

Questions such as, "Should we introduce a larger sized container?" or "Should we expand into Asia?" help companies to define their corporate mission.

Accepted Answer

These questions may help a company's strategic planning, but they do not necessarily define the corporate mission. The corporate mission is a broader statement that outlines the company's purpose, goals, and values. It may be informed by decisions like introducing a larger container or expanding into new markets, but it encompasses more than just those choices.

Question 11

The balanced scorecard system is based on the idea that an organisation needs to measure its performance on both financial and non- financial measures.

Accepted Answer

The statement is true. The balanced scorecard system emphasizes the importance of measuring an organization's performance on both financial and non-financial measures, including customer satisfaction, internal processes, and learning and growth.

Question 12

Imagine you are the marketing manager for Herron Pharmaceuticals and have been provided with the following summary information relating to sales of Herron brands along with sales of Herron's closest competitors. Calculate market share for each of the brands and for the category as whole, for the year 2005, using the data and formulae provided and answer the following questions:
a) Calculate market share and display your results in a table suitable for presentation in a business report.
b) Comment on the advantages of using both value and volume to measure a brand's market share.
c) Comment on the usefulness of market share as a performance measure.
d) What other performance measure would you recommend for Herron?
  Formulae: Share of Market - Competitive (SOM)
There are two metrics used to measure share of market; volume and value. For reference, the formulae are provided here:
 $\begin{array} { l } 
\text { SOM (value) } ( \% ) = \frac { \text { Sales } ( \$ ) \text { for Focal Company (or Brand) } } { \text { Sales } ( \$ ) \text { for Category } } \times 100 \
\
\text { SOM (Volume) } ( \% ) = \frac {\text {\text { Units Sold for Focal Company (Or Brand } )   }} { \text { Units Sold for Category} } \times 100
\end{array}$  Explanatory Notes:
-Data refers to sales at supermarkets and convenience stores. Pharmacy sales data is not included.
-Value = $sales (millions)
-Volume= millions of dozens of packets
Source: Retail World, 2004- 2006

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Question 13

In the Boston Consulting Group (BCF) matrix, cash cows are defined as products or business units with low growth and high relative market share.

Accepted Answer

This is the correct definition of cash cows according to the Boston Consulting Group (BCG) matrix.

Question 14

Briefly outline the portfolio planning method developed by (1) Boston Consulting Group (BCG). What are the advantages and disadvantages of portfolio methods?

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Question 15

Home Depot sells everything the do- it- yourself customer could ever want. In 1998, the company had more than $30 billion in sales. Its earnings per share rose 29 per cent. Its sales were growing at about 21 per cent annually. It has opened a chain of stores called Expo Design, which sells the same type of merchandise as is found in Home Depot stores to affluent homeowners and interior decorators. Home Depot courts the professional contractors, which make up about 30 per cent of its total business. Identify the intensive growth strategies that Home Depot is using. Next, develop your own plans for how Home Depot could use each of the intensive growth strategies.

Accepted Answer

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Question 16

One valid criticism of the four Ps concept is that services are not considered.

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Question 17

A marketing strategy consists of specific strategies for target markets, positioning, the marketing mix but does not normally include the marketing expenditure levels.

Accepted Answer

A marketing strategy may include marketing expenditure levels as part of the overall plan and budget.

Quiz 3: Strategic Planning and Marketing