Theories, models and Key Authors of Strategic Planning

Question: What is the main idea of Stakeholder Theory?

• Businesses should focus solely on maximizing shareholder value.
  
  

• Companies should balance the needs of all stakeholders, not just shareholders.

• Organizations should focus only on their internal strengths.

• Competitive advantage is determined entirely by industry structure.

Answer explanation

Stakeholder Theory emphasizes that companies should consider the interests of all stakeholders, including employees, customers, and the community, rather than focusing solely on maximizing shareholder value.

Which model helps businesses analyze industry competition based on five external forces?

• SWOT Analysis

• Porter’s Five Forces

• Balanced Scorecard

• McKinsey 7-S Model

Answer explanation

Porter’s Five Forces is a model that analyzes industry competition by examining five external forces: the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products, and industry rivalry.

Who is considered the “father of modern management”?

• Peter Drucker

• Michael Porter

• Henry Mintzberg

• Jay Barney

Answer explanation

Peter Drucker is widely recognized as the 'father of modern management' for his innovative ideas on management practices and principles that have shaped contemporary management theory.

What is the focus of the Dynamic Capabilities Theory?

• Companies should create uncontested market spaces.

• Businesses should focus only on financial metrics.

• Organizations must continuously adapt and transform to maintain a competitive advantage.

• Strategy is static and does not require change.

Answer explanation

The Dynamic Capabilities Theory emphasizes that organizations must continuously adapt and transform to sustain their competitive advantage in a changing environment, making this the correct focus.

What is the main goal of Blue Ocean Strategy?

• Compete aggressively with market leaders

• Reduce operational costs

• Create new, uncontested market spaces

• Focus only on shareholder interests

Answer explanation

The main goal of Blue Ocean Strategy is to create new, uncontested market spaces, allowing companies to innovate and differentiate themselves rather than competing directly with existing market leaders.

Who developed the Five Forces model?

• Jay Barney

• Michael Porter

• Henry Mintzberg

• Igor Ansoff

Answer explanation

The Five Forces model, which analyzes industry competition and profitability, was developed by Michael Porter. His framework is widely used in strategic management to assess market dynamics.

According to Resource-Based View (RBV), what makes a resource a sustainable competitive advantage?

• It is expensive

• It is easy to copy

• It is valuable, rare, inimitable, and organized (VRIO)

• It depends only on external market conditions

Answer explanation

According to the Resource-Based View (RBV), a resource is a sustainable competitive advantage if it is valuable, rare, inimitable, and organized (VRIO). This framework highlights the importance of these four criteria.

The Ansoff Matrix is used to…

• Evaluate internal company culture.

• Measure financial performance

• Identify market growth opportunities

• Assess competitor strategies.

Answer explanation

The Ansoff Matrix is a strategic tool used to identify market growth opportunities by analyzing product and market combinations, making 'Identify market growth opportunities' the correct choice.

What is Jay Barney’s main contribution to strategic management?

• The Five Forces Model

• The 7-S Framework

• The BCG Matrix

• The VRIO Framework

Answer explanation

Jay Barney's main contribution to strategic management is the VRIO Framework, which helps organizations assess their resources and capabilities to achieve a competitive advantage. The other options are attributed to different theorists.

According to Michael Porter, how can companies achieve a competitive advantage?

• Through differentiation, cost leadership, or focus

• By competing solely on price

• By copying their competitors’ strategies

• By avoiding competition altogether

Answer explanation

According to Michael Porter, companies can achieve a competitive advantage through differentiation, cost leadership, or focus. These strategies allow firms to stand out in the market rather than just competing on price or copying others.