Strategic change is defined as "changes in the content of a firms strategy as defined by its scope, resource deployments, competitive advantages, and synergy" (Hofer and Schendel 1978). Strategic change may take place in respect to a number of different areas within a business unit including the following:

Vision, mission, goals

Restructuring

Range of product / service lines

New technology adoption

Research and development

Branding and marketing strategy

Geographic coverage

Human resource management

Product / service quality

Product / service pricing

Business partnership

Distribution channels

Financing of operations

(a) Choose three of these areas and discuss how strategic change is likely to occur in respect to these areas if a business unit is moving from a product differentiation to a low cost strategy. (6 marks)

(b) The problem with budgeting is that managers play games which damage the credibility and usefulness of budgets. Therefore, nobody should use budgets anymore.

Do you agree with this statement and why?