FALL 2016

BUSINESS POLICY (BUSN 0401)

Study Guide for Exam I (Chapters 1 3)

Exam Date September 6, 2016

Chapter 1: What is Strategy and Why is it Important?

Know the relationship between a companys strategy and its business model

Be able to explain the difference between a competitive advantage and a sustainable competitive advantage.

Know the five most frequently used strategic approaches to setting a company apart from its rivals.

Know the three central questions that managers face when evaluating a companys business prospects.

Be familiar with the actions to look for in identifying the components of an organizations strategy.

Know the reason(s) a companys strategy evolves over time.

Know what is meant by the statement A companys strategy is partly proactive and partly reactive.

Be able to explain how to distinguish a winning strategy from a weak or mediocre strategy.

Know the reasons why crafting and executing strategy should be a top priority for a companys management team.

Chapter 2: Charting a Companys Direction: Its Vision, Mission, Objectives and Strategy

Be able to define or know the purpose of these terms:

Strategic Vision	Mission Statement
Values	Strategic Objective
Stretch Objective	Balance Scorecard
Strategic Intent	Strategic Plan

Know the value of having a good strategic vision.

Be able to provide some examples of values.

Know the five components of the strategy making /strategy executing process.

Be able to explain why it is important to communicate the strategic vision.

Know why it is important to set objectives.

Be able to explain why short-term and long-term objectives are necessary.

Know the difference between a financial objective and a strategic objective.

Be able to explain the strategy making hierarchy for a diversified company and how it differs from the strategy making hierarchy for a single business company.

Be able to identify and explain the most difficult part of the strategy making/strategy executing process.

Know the roles of the Board of Directors in the strategy making/strategy executing process.

Chapter 3: Evaluating a Companys External Environment

Be familiar with the role of each of these concepts/business practices:

Strategic Group	Strategic Group Mapping
Driving Forces	Key Success Factors

Be familiar with the factors of a companys macro- environment.

Know the five competitive forces that comprise Michael Porters five forces model of competition.

Be familiar with competitive pressures associated with each of the five competitive forces.

Be able to identify at least three driving forces and have general knowledge of each.

Know some of the benefits of constructing a strategic group map.

Be able to explain why it is important to know what moves the rivals will make next.

Be prepared to explain the value in identifying an industrys key success factors.

Know some of the factors used to determine whether or not the outlook for the industry presents the company with an attractive business opportunity.

Note: This document is just a guide and should be used in addition to reading the eBook. Business casual attire required to avoid penalty.