American Management and Business Administration Institute
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Study Guide	This is a Study Guide. As the name implies, it guides the student in the reading of the textbook, The Virtual MBA. The textbook is divided into 12 Chapters and each chapter into several Sections. Sections are numbered consecutively from the beginning to the end of the textbook. We will refer you to the textbook by citing the Section number. This Subject is based on Chapter V of the textbook.
The task of a good manager. Strategy planning and implementing	An effective and flexible strategy is a must in today's changing and competitive markets.Flexibility is key; yesterday's good strategy may not be convenient today. But certain basic concepts of what a a good strategy should be have permanent validity. Now please read Sections56. and 57. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Q1 - Four basic tasks a manager must perform in managing for the long run are mentioned above. See how many you can remember, with a little help: define and implement _______ direction, allocate ______ ______ efficiently, ______ effectively, and create _________ in his business. See Model Answer A1
	Q2- Which are the two basic and equally important parts of strategy mentioned? See Model Answer A2
Strategic definitions: the case of Amazon.com	Amazon.com is a very interesting case of how a clear definition of the type of business and the kind of company proved to be successful. Now please read Sections 58. and 59. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Q3 - When the founders of Amazon.com decided to "be in the business of selling a low-tech commodity -books, through a high-tech medium -the Internet", what were they doing? See Model Answer A3
	Q4 - It was necessary for the new Amazon company to differentiate itself from the established booksellers. How did they decide they would do this? See Model Answer A4
Some weaknesses of an upstart	A new company, especially one with the ambitious goal of competing heat to head with existing book retail chains, had to confront many difficulties. Amazon's founders were aware of the weaknesses and planned to overcome them. Now please read Section 60. of the textbook and return to this point of the Guide. Please continue
Flexibility and the allocation of scarce resources	Flexibility, as mentioned before, is a must. It may take many forms, depending on the type of business and the circumstances. To plan and implement a strategy, the fact that resources are always scarce must be considered. Now please read Sections 61. and 62. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Q5 - Which was the basic strategy quickly implemented by Amazon? See Model Answer A5
	Q6 - We said that a company must be flexible and adaptable. Which two different ways to accomplish this end were mentioned? See Model Answer A6
The Macro approach	The macro approach is aimed at a whole business unit. The textbook uses use IBM as a case and mentions other examples. Now please read Section 63. of the textbook and return to this point of the Guide. Please continue
The micro approach	The micro approach to allocating resources is aimed at specific projects within a single unit. There is also a technical and an intuitive approach to evaluate if a project justifies the resources to be invested. The textbook mentions several cases as McDonald's and Starbucks. Now please read Section 64. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Q7 - Which are the alternatives in a macro approach to allocating scarce resources? See Model Answer A7
	Q8 - To what is the micro approach to allocating resources aimed? See Model Answer A8
Organizing Effectively	A company may be organized in many different ways. Sometimes how it is organized depends on the outlook of the senior managers. But usually there is a well founded reason for organizing in a specific way. The textbooks compares Gillette and Bestfoods and shows why companies that are similar in many ways are differently organized. Now please read Section 65. of the textbook and return to this point of the Guide. Note: In June 2000 Bestfoods agreed to be acquired by the Anglo-Dutch conglomerate Unilever. Please continue
Excellence? Why?	Some mediocre companies are always around, but most are facing a simple alternative: "create excellence or perish". Now please read Section 66. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Q9 - Why are Gillette and best foods organized differently in relation with product development? See Model Answer A9
	Q10 - The need of excellence is caused by the increase in competition in a global economy. From whom to whom has power shifted in consequence? See Model Answer A10
Excellence? Where?	You may call it excellence, or "Total Quality", or "Continuous Improvement". However you name it, it must exist in all and every aspect of the business. Now please read Section 67. of the textbook and return to this point of the Guide. Please continue
Excellence? Who?	No member of the organization is exempt from driving towards excellency. Naturally, senior management must give directions and close supervision. Now please read Section 68. of the textbook and return to this point of the Guide. Please continue
Vision, rewards, measurements	The textbook explains the value of a company's vision and quotes one held by a leading food processing company. It also reviews way to measure performance like the balanced score card and Economic Value Added. Now please read Section 69. of the textbook and return to this point of the Guide. Please answer the questions
Self- evaluation questions	Q11 - To create excellence in a business, many actions must be taken at all level of the organization. However, there is a crucial fist condition. Which is it? See Model Answer A11
	Q12- Why must good informal relationships within and across authority levels be encouraged? See Model Answer A12
Here we say: So long!	This is the End of Subject Strategic Management. The Subject belongs to the Curriculum of the free Certificate Program in Management and Business Administration Online Program offered by AMBAI as a Public Service.
To access all subjects and the Final Test of this Management and Business Administration Program click here.
A2 - Formulation and implementation. Back
A1 - Define and implement strategic direction, allocate scarce resources efficiently, organize effectively, and create excellence in his business. Back
A4 - By offering prospective customers low price, convenience and customer service. Back
A3 - Formulating the basic strategy. Back
A6 - By diversifying, or by focusing on their main strengths and core business, depending on the circumstances, type of business, or the criteria of top management. Back
A5 - Establishing a strong brand identity and a broad base of loyal customers Back
A8 - At specific projects within a single unit. Back
A7 - Directing investment to the businesses or divisions with more profit potential. Divesting unprofitable businesses and investing in or acquiring others Back
A10 - From the manufacturers and retailers, to the consumers. Back
A9 - Because Gillette sells a homogenous product all over the world, while Bestfoods' products must be adjusted to the local tastes in food. Back
A11 - The full and continuous involvement of top management Back
A12 - Because it ensures the flow of information and valuable suggestions to the decision levels. Back

( * ) About this course. AMBAI is a non-profit "Virtual Teaching Institution", whose faculty members are located in different countries and interact among them and with students via the Web; they are executives of multinational corporations who donate their time and effort for this public service program. AMBAI has not applied for nor received accreditation from any private or public institution. The only objective of this free Program is to improve the skills of the students; no claim is made about the usefulness of the Certificate of Completion. The Cambridge, MA address is a postal address only, not the physical location of AMBAI.