10.4 Strategic Failure (AQA A Level Business): Flashcards
Exam code: 7132
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What does strategic planning involve?
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Cards in this collection (30)
What does strategic planning involve?
Setting the mission, vision and objectives, analysing the environment (e.g. SWOT), making competitive choices and creating a coordinated action plan.
Give two benefits of strategic planning.
Clear direction and improved coordination (also better decision-making, proactive thinking, accountability and stakeholder confidence).
What are the four stages of the strategic planning cycle?
Planning, implementing, monitoring and reviewing.
Give two reasons strategies fail.
Poor execution and resistance to change (also internal/external obstacles, environmental change, poor planning and lack of flexibility).
Define a planned strategy.
A planned strategy is the deliberate approach a business sets out in advance, with clear objectives and detailed plans.
Define an emergent strategy.
An emergent strategy develops over time as the business adapts to changing circumstances, rather than being planned from the start.
Why might planned and emergent strategy diverge?
A changing external environment, unexpected internal factors, or new opportunities and innovation.
Define strategic drift.
Strategic drift is when a business's strategy gradually loses relevance because it fails to adapt to a changing environment.
Give two reasons for strategic drift.
Slow response to change and complacency/overconfidence (also resistance from staff and a lack of innovation).
Give two consequences of strategic drift.
Loss of competitive advantage and declining sales/market share (leading ultimately to business failure if unchecked).
What is strategic performance evaluation?
Measuring how well a strategy is delivering its intended outcomes, using both quantitative and qualitative data.
Give two tools used to evaluate strategic performance.
Financial data and KPIs (also market performance, the balanced scorecard, benchmarking and stakeholder feedback).
Give one challenge in evaluating strategic performance.
Unclear objectives (also external factors, time lags and subjective judgement).
The strategic planning cycle is plan, implement, monitor and .
The strategic planning cycle is plan, implement, monitor and review.
True or False?
A planned strategy is set out in advance, while an emergent strategy develops over time.
True.
Most businesses end up with a combination of planned intentions and emergent adaptations.
True or False?
Strategic drift happens when a business adapts too quickly to its environment.
False.
Strategic drift happens when a business fails to adapt to a changing environment.
Why should strategic evaluation be ongoing?
So results can be acted on quickly where performance is off track — not just at the end of a strategic cycle.
Define contingency planning.
Contingency planning is predicting risky or unwanted events and developing a process for how the business will respond.
Give two things contingency planning commonly covers.
Risk assessments and evacuation plans (also emergency staff responsibilities, alarm testing and preventative measures like fireproof doors).
Give one benefit of contingency planning.
It helps a business respond immediately and survive a crisis (also reducing costs/losses and keeping stakeholders safe).
Give one limitation of contingency planning.
It is time-consuming, spending may be wasted if not needed, and it is hard to budget for unknown crises.
Define crisis management.
Crisis management is the immediate handling of a disruptive and unexpected event.
What kind of leadership might a crisis require?
Radical solutions such as autocratic leadership and centralised decision-making to ensure business continuity.
Name two factors affecting effective crisis management.
Speed and transparency (also control and communication).
Why does speed matter in crisis management?
A rapid response can contain or reduce the damage caused by the crisis.
Why does transparency matter in crisis management?
Keeping customers informed and telling the truth protects reputation.
Give an example of a crisis situation.
IT/data loss or a warehouse fire (also natural disasters, theft, loss of a CEO or an infection outbreak).
A rapid, honest response during a crisis helps protect a business's .
A rapid, honest response during a crisis helps protect a business's reputation.
True or False?
Contingency planning and crisis management can completely eliminate the risk of disruption.
False.
They cannot eliminate the risk, but they improve resilience and reduce the negative impacts.
True or False?
Contingency planning happens in advance, while crisis management is the immediate response to an event.
True.
Contingency planning prepares for risks beforehand; crisis management handles a disruptive event as it happens.
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