1. Why is it so important to integrate intuition and analysis in strategic management?

No analytical tools can capture all aspects of a given organization’s culture and situation.
Nor can analytical tools assimilate all the subjective information that must be considered in
strategic management, such as personalities, emotions, values, beliefs, customs, and ethical
factors. However, analytical tools are essential to utilize in strategic planning because they have
been developed over many years using actual data, and are effective for assimilating facts and
figures. Intuition alone is insufficient for making good strategic decisions. Based on one’s past
experiences, judgment, and “gut” feelings, intuition is especially under time constraints, and in
assigning weights and ratings in planning matrices. Strategists must integrate intuition and
analysis in strategic management, but inthe view of this author, analysis is more important than
intuition. Unfortunately, too many firms rely too heavily on intuition, and some disastrously rely
exclusively on intuition.

2. What strategies do you believe can save newspaper companies from extinction?

Newspaper companies could invest more in Internet technologies, including developing nice aps
for smartphones, and charging for the aps. Also, they could charge for an online subscription.
Perhaps they could shift to a business model of giving away newspapers, while simultaneously
enticing advertisers to advertise more, given the expected increased circulation from “free at
newsstands and nominal fee for delivery.” Free is a good price, if expenses can be exceeded by
advertising revenue. But any strategies pursued should be determined after thorough analysis as
described in this text, rather than haphazardly determined.

3. How important do you think “being adept at adapting” is for business firms? Explain.

Being adept at adapting is vital for survival of business firms (and organisms). The strategic-
management process is based on the belief that an organization’s survival can depend on how
well the firm continually monitors internal and external events and trends and makes timely
changes as needed.

4. Kotler identifies four levels of competitors, explain?

Kotler identifies four levels of competitors

(a) Brand competitors. Firms who offer similar products to the same customers we serve
and who have a similar size and structure of organisation as ourselves, for example:
● Pepsi and Coca-Cola
● Unilever and Procter & Gamble.
(b) Industry competitors. Suppliers who produce similar goods but who are not necessarily
the same size or structure as ourselves, or who compete in a more limited area or product
range, for example:
● British Airways and Singapore Airlines
● Unilever ice creams and Mars ice creams
● Nestlé and Cadbury’s.
(c) Form competitors. Suppliers whose products satisfy the same needs as ours, although
they are technically quite different, for example:
● speedboats and sports cars
● book publishers and software manufacturers.
(d) Generic competitors. Competitors who compete for the same income as the company, for
example:
● home improvements and golf clubs
● foreign vacations and new homes.

5. Michael Porter, in his book Competitive Advantage: Creating and Sustaining Superior
Performance, suggested that a firm must assess the industry’s market attractiveness by
considering:
● the extent of the rivalry between existing competitors;
● the bargaining power of suppliers;
● the bargaining power of buyers;
● the threat of substitutes;
● the threat of new entrants.

Explain the reasons why firms often continue to operate in an industry which is generating below
normal returns in the short run?

There are exit barriers that result in firms remaining in an industry, even though the returns are
below the normal level. When a firm realises that the probability of success is low or
acknowledges that there is excess capacity in the industry, a decision to close may be
appropriate. However, decisions of this kind are often postponed. This is likely to occur if the
closure will result in substantial costs being incurred by the firm. These are termed exit costs. In
general terms, the costs of closure are estimated to be higher than continuing the operation.
Particular costs are redundancy payments to staff or long-term supply contracts that will result in
damages being due as a result of breaking the contract. In these situations, the closing may be
delayed until a more appropriate time.
The ownership of assets with no resale value or assets shared with other processes could be
another factor that delays the decision to close an operation. Similarly, common costs that are
absorbed by a particular process may influence the decision to close down a portion or the whole
of an operation.
Apart from the exit costs, a firm may decide to stay in an industry because the market has a
strategic importance to the firm. For example, a commercial bank may continue to provide
current (checking) accounts despite their low profitability because they are the cornerstone of a
client relationship from which more valuable products can be sold.

6. Explain why successful strategy implementation often hinges on whether the strategy
formulation process empowers managers and employees.

A key element of any strategy is your organization and workforce.

Successful strategy implementation hinges upon aligning your employees to strategic goals. Thus
the overall strategy of the organization must inform their analysis, decisions and actions while
working.
Strategy may be defined and decided in the boardroom and high level meetings, but at the end it
is your workforce that will carry it out in their day to day functioning.

For example, let’s say you’re an automobile producer. If your strategy is to pivot towards a new
demographic(say women in their 20s) in your targeting, you’ll want employees at all levels to be
in sync with this. Salespeople need to focus their efforts on attracting more of this demographic
to the showroom. Marketing managers need to develop strategies to attract this segment. Even
your engineering team will need to develop future designs and modifications keeping this
segment in mind.

To sum it up- yes, you do need to empower managers and employees when formulating strategy.
Their course of action will depend on it, which in turn aids its effective implementation.

This Chicago Booth course touches upon this concept for example, in cultivating your
organization to withstand uncertainty as part of your risk management strategy.

7. Why Strategic Planning is Important in Healthcare?

Improved communication among all chains

It’s easy for departments at every level to become confused as to what’s going on. Both your
employees and stakeholders want to ensure that your organization will have a long-lasting future.
They want to know where your organization is headed and the steps it takes to get there.
Effective planning in healthcare management can help you create clarity and improve
communication. Your strategic plan should address the key issues, your organization’s vision
and goals, and the steps to get there. Your employees and stakeholders will have improved
confidence and faith in your organization.
Developing and sharing a vision
With this in mind, you can make an impact on every level of your organization. Employees will
be committed and motivated to help achieve your vision. Stakeholders will have the confidence
and clarity they need to make sound financial decisions. Strategic planning for healthcare
facilities that’s clearly developed, executed, and communicated can help each of your individuals
carry out your out vision that can lead to a fulfilling future.
Increased employee motivation and engagement
Each of your employees wants to be recognized and heard. Being recognized by their leaders can
greatly impact their productivity, engagement, and safety management. Every employee wants to
have the responsibility to make decisions they know will benefit your organization. This also
motivates them to perform above the minimum acceptable standards as outlined in the job
description or performance evaluation. Employees won’t be motivated to improve themselves for
an organization that doesn’t state a clear vision or a well-executed game plan.
Transformational leadership and authority
Transformational leadership is a type of leadership that inspires your employees to work harder
and to do better. It incorporates techniques that have been cited in organizational behavior
literature. Transformational leaders clearly communicate their organization’s vision, believe in
their individual employees, and have the abilities to produce high levels of performance. Helping
your employees understand how their roles can contribute your organization’s mission and vision
is a crucial part of strategic management.
Increased team cooperation and collaboration
Team collaboration and cooperation is an essential component in delivering high-quality
healthcare. Employees must work together to make your organization a success. Teamwork is
essential for every healthcare industry in order to improve their performance and service.
Effective strategic planning models in healthcare can bring your employees together to deliver
quality care, great customer service, and increased performance.
Take the time to work on your strategic plan before sharing it with your employees. A well
thought-out and executed strategic plan can increase teamwork, improve performance
accountability, and increase employee engagement. With all levels working harmoniously
together, you can quickly achieve the long-term goals of your organization.
Strategic planning in health care organizations involves outlining the actionable steps needed to
reach specific goals. While there are different strategy types and levels, the purpose of all
strategies is to bring an organization’s actions into alignment with its stated mission or values.
Today, health care providers require more patient-centric, value-based approaches, whereas
many of their current systems follow older, more traditional strategy models, according to
Becker’s Hospital Review.
Increasingly, organizations are having to recalibrate their health care strategies to suit current
market trends and changing approaches to patient care. Any professional looking to better
understand the inner workings of health care institutions needs to know the different types of
strategies used in health care, along with their importance for an organization’s success.

The Importance of Strategic Planning

As noted in a report published in the Journal of Oncology Practice, “You may not be able to
control the future, but strategic planning can create a direction for your practice and maximize
your options for influencing your environment.” Strategic planning in health care organizations
entails taking proactive steps toward a goal, not just addressing immediate problems as they
arise. Health care strategy is crucial to an organization’s future success by providing the
framework for making day-to-day choices in alignment with its objectives.

Levels of Health Care Strategy

The American College of Healthcare Executives (ACHE) explains that health care strategies
vary in type (prospective or emergent) and organizational level (corporate, business, or
functional).

Strategy Types
No matter their size or mission, most organizations employ some form of strategy to make
progress towards their long-term goals. There are two main strategy types that organizations
employ: prospective and emergent.
Prospective Strategy
The majority of large health care organizations develop thorough plans to prepare for future
issues that may affect their facilities and the health care field at large. These providers must
focus on creating strategies that anticipate potential needs for additional resources, such as
capital and personnel. This type of long-term planning is known as prospective strategy.
Prospective strategies should also allow for flexibility in case unforeseen developments occur in
the health care sector. For example, if providers develop a prospective strategy based on an
expected nursing shortage in the years ahead, and that shortage is less severe than anticipated, a
flexible strategy would include a plan for reallocating resources to other areas.

Emergent Strategy
Emergent strategies involve a retrospective analysis of events to make better decisions going
forward. Developments such as the implementation of new health care policy, swings in
prescription drug prices, and outbreaks of epidemic diseases can cause health care market
fluctuations that require providers to continually experiment and adapt. Organizations that rely
on emergent strategies must be extremely flexible to be able to re-evaluate internal strategies and
quickly recalibrate to better suit current market trends. Many providers analyze competitors’
strategies and implement tactics that seem to be working for other leaders in the field.

Strategy Levels within Organizations

In addition to prospective and emergent strategy approaches, there are also different strategy
levels within organizations. Organizational strategies are often subdivided into corporate,
business, and functional levels.

Corporate-Level Strategy
This level of strategy often involves a board of directors, executive leaders, and stakeholders. As
the top tier of the decision-making process, the corporate level oversees strategy for the entire
organization, with a focus on defining mission and big-picture goals, such as fund allocation and
business deals.

Business-Level Strategy
This strategy level prioritizes specific product lines. Business-level strategy focuses on projects
in development, and managers have the authority to develop strategies based on the needs of
their directives. Managers translate the directions and intent of those at the corporate level into
actionable strategies for individual projects and employees.

Functional-Level Strategy
The third tier in an organization’s strategic approach is the functional level, which supports the
corporate and business levels. The focus at this level is tied to the end products or services the
company provides. Functional-level strategy integrates research, marketing, production, and
distribution to better connect products and services with the company’s client base.
Managers involved in developing strategies at every level must consider how their plans will
affect individuals throughout the organization. For example, a strategy aimed at increasing health
care services during a facility’s expansion should consider the additional hours current staff
members may need to work before new professionals can be hired. Similarly, if administrators
plan to divert more resources to a specific department in a health care facility, the strategy needs
to account for how decreases in resources will impact other departments. Ideally, information
should cascade from corporate down to the functional level, with the final product meeting all
goals and driving business success.

Developing Strategies with Advanced Education

Strategic planning in health care organizations helps medical institutions operate successfully
with respect to business objectives and optimal standards of patient care. Professionals looking to
gain a better understanding of health care strategies to help analyze, create, and implement them
may need advanced education beyond a bachelor’s degree.
Heath care administrators or executives must have a comprehensive understanding of health care
stratagems to effectively manage an entire facility, clinic, or department. A graduate degree, such
as Regis College’s Master of Science in Health Administration, will help professionals add new
skills into their already-existing foundation of experience, which can enable them to integrate
strategy systems in the workplace.

Strategy Implementation and Career Growth

Earning a Master of Science in Health Administration can enhance a professional’s working
knowledge of health care systems, and it may also aid in career advancement. Medical facilities
often seek out candidates with master’s degrees, as that level of education signifies that the
candidate possesses advanced knowledge and applied experience.
Demand for strategic leadership roles is also on the rise. The U.S. Bureau of Labor Statistics
expects health care administrator jobs to grow by 20 percent between 2016 and 2026, which is
much faster than average. That equates to an additional 72,100 open positions.
A Master of Science in Health Administration may be the perfect fit for professionals looking to
elevate their understanding of health care system strategies while also expanding their career
opportunities.
8. Explain with reasons the advantages and disadvantages of capitalizing brands on the
balance sheet.

To capitalize is to record a cost or expense on the balance sheet for the purposes of delaying full
recognition of the expense. In general, capitalizing expenses is beneficial as companies acquiring
new assets with long-term lifespans can amortize or depreciate the costs. This process is known
as capitalization.

Capitalization may also refer to the concept of converting some idea into a business or
investment. In finance, capitalization is a quantitative assessment of a firm's capital structure.
When used this way, it sometimes also means to monetize.
Benefits of Capitalization
Capitalizing assets has many benefits. Because long-term assets are costly, expensing the cost
over future periods reduces significant fluctuations in income, especially for small firms. Many
lenders require companies to maintain a specific debt-to-equity ratio. If large long-term assets
were expensed immediately, it could compromise the required ratio for existing loans or could
prevent firms from receiving new loans.

Also, capitalizing expenses increases a company's asset balance without affecting its liability
balance. As a result, many financial ratios will appear favorable. Despite this benefit, it should
not be the motivation for capitalizing an expense.

Limitations of Capitalizing
To capitalize assets is an important piece of modern financial accounting and is necessary to run
a business. However, financial statements can be manipulated—for example, when a cost is
expensed instead of capitalized. If this occurs, current income will be understated while it will be
inflated in future periods over which additional depreciation should have been charged.

9. Since the late 1900s, several factors enabled a marked increase in the frequency and scale
of corporate disasters and scandals.

These factors include notably:

Globalisation - markets are global, and connected as never before, natural boundaries and limits
that existed before globalisation no longer exist, so problems can reach and spread far wider than
in earlier times.

Technology - the vast modern scale of technologies and the sheer size of things that
organizations now create and process, in every sector, increase the scale of the potential damage
of corporate wrong-doing. For example consider the enormous scale of manufacturing,
production, commodities, machinery, transport, construction, IT or the web compared with a
generation ago. When something goes wrong in modern times, the impacts are potentially bigger
than ever in history.

Population - volumes and densities of populations everywhere have increased dramatically since
the late 1900s. Where corporate scandals and disasters happen, the potential to affect vast
numbers of people has never been greater.

Free Market - since the late 1900s the fondness of (mainly 'western') governments for 'free
market' capitalist economics (basically the view that market forces should be kept free from
interference) has encouraged the development of unregulated major risk-taking in organisational
governance - and this style of running organisations has now become deeply embedded into
corporate attitudes. Most corporations are run in an extremely selfish and greedy manner. Short-
term gain and the enrichment of directors and senior staff continue to drive corporate strategy
and decision-making everywhere. Combined with the other factors, this creates a potent recipe
for disasters of all kinds.
Given that these factors are likely to persist in offering progressively greater potential for the
negative impact of corporate activity on societies, economies and the environment people are
increasingly calling for substantially improved visibility and controls in Corporate Governance.

10. According to Henry Mintzberg why simply organization as vehicle for shareholders
investment is inadequate?

11. List down six guidelines for effective strategic management offers by R.T. Lenz?

R. T. Lenz offers six guidelines for effective strategic management

1. Keep the process simple and easily understandable
2. Eliminate vague planning jargon
3. Keep the process non-routine, so vary assignments, team membership, meeting formats,
settings, and even the planning calendar.
4. Welcome bad news and encourage devil’s advocate thinking.
5. Do not allow technicians to monopolize the planning process.
6. To the extent possible, involve managers from all areas of the firm

12. Although there are many marketing variables that impact the success or failure of
strategy-implementation efforts, two variables are central to the process. What are these
variables? Discuss why they are so important.

Two variables of central importance to strategy implementation are market segmentation

and product positioning. Segmentation is important because it is a key to matching supply
and demand, which is one of the thorniest problems in customer service. Segmentation
often reveals that large, random fluctuations in demand actually consist of several small,
predictable and manageable patterns. Product positioning is important because it is a
severe mistake to assume the firm knows what customers want and expect. Many firms
have become successful by filling the gap between what customers and producers see as
good service. What the customer believes is good service is paramount, not what the
producer believes service should be. Positioning entails developing schematic
 representations that reflect how a firm’s products or services compare to competitors’ on
dimensions most important to success in the industry.

13. What is a typology of generic competitive strategies provide by Mintezberg.

Mintzberg proposes a typology of generic competitive strategies using the dimensions of:

Differentiation strategies:
(for instance, price differentiation strategy; image differentiation strategy; support
differentiation strategy; quality differentiation strategy; design differentiation strategy;
and undifferentiation strategy), and

Scope strategies
(for instance, unsegmentation strategy; segmentation strategy; niche strategy; and
customising strategy).

According to Mintzberg, differentiation is a supply-driven concept, whilst scope is a

demand-driven concept.

14. In insurance, diversification is achieved through the law of large numbers.

Verify this statement

The law of large numbers is a statistical concept that calculates the average number of
events or risks in a sample or population to predict something. The larger the population
is calculated the more accurate predictions. In the field of insurance, the Law of Large
Numbers is used to predict the risk of loss or claims of some participants so that the
premium can be calculated appropriately. For example there is an average that of every
100 insurance participants, there is one participant who filed an accident claim, then the
premium of 100 participants should be able to provide Sum Assured to at least 1 accident
claim. The larger the insurance participant is calculated, the more precise the prediction
of the calendar and the calculation of the premium. Life insurance, as a tool for risk
spread, can only work if a life insurance company is able to bear the same risk in large
numbers. Here apply what is called the law of large number. The law of large numbers
states that if the amount of exposure to losses increases, then the predicted loss will be
closer to the actual loss. The use of the law of large numbers allows the number of losses
to be predicted better.

15.
Answer: