Answer Key Ch1

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PART III

LECTURE NOTES

CHAPTER 1

THE NATURE OF STRATEGIC MANAGEMENT

CHAPTER OUTLINE

| |What is Strategic Management? | | |Key Terms in Strategic Management | | |The Strategic-Management Model | | |Benefits of Strategic Management | | |Why Some Firms Do No Strategic Planning | | |Pitfalls in Strategic Planning | | |Guidelines for Effective Strategic Management | | |Comparing Business and Military Strategy | | |The Cohesion Case: McDonalds |

CHAPTER OBJECTIVES

After studying this chapter, you should be able to do the following:

|1. |Describe the strategic-management process. | |2. |Explain the need for integrating analysis and intuition in strategic management. | |3. |Define and give examples of key terms in strategic management. | |4. |Discuss the nature of strategy formulation, implementation, and evaluation activities. | |5. |Describe the benefits of good strategic management. | |6. |Discuss the relevance of Sun Tzu’s The Art of War to strategic management. | |7. |Discuss how a firm may achieve sustained competitive advantage. |

CHAPTER OVERVIEW

Chapter 1 provides an overview of strategic management. A practical, integrative model of the strategic-management process is introduced. Basic activities and terms in strategic management are defined. The benefits of strategic management are presented. This chapter also introduces the notion of boxed inserts. A boxed insert in each chapter showcases excellent strategic management under harsh economic conditions.

VTN (Visit the Net): The website www.strategyclub.com, designed by Dr. David, provides strategic planning tools, templates, links, and information to help strategic management students analyze cases.

VTN (Visit the Net): The website http://www.pearsonhighered.com/david/ provides sample tests and supplemental material for each chapter.

Doing Great in a Weak Economy – McDonalds
Despite the fact that most firms were struggling in 2008, McDonald’s increased its revenues in 2008 and nearly doubled its net income. Fortune Magazine in 2009 rated McDonald’s as the 16th “Most Admired Company in the World”. McDonald’s low prices and expanded menu items have attracted millions of new customers.

EXTENDED CHAPTER OUTLINE WITH TEACHING TIPS

I.WHAT IS STRATEGIC MANAGEMENT?

A. Strategic management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

1. The term strategic management is used synonymously with strategic planning.

2. The purpose of strategic management is to exploit and create new and different opportunities for tomorrow...
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