Question Bank

1. Elaborate the strategic management process.

I. Situation Analysis
The external environment includes groups, individuals, and forces outside of the
traditional boundaries of the organization that are significantly influenced by or have a
major impact on the organization. External stakeholders, part of a company’s operating
environment, include competitors, customers, suppliers, financial intermediaries, local
communities, unions, activist groups, and local and national government agencies and
administrators. The broad environment forms the context in which the company and its
operating environment exist, and includes sociocultural, economic, technological,
political, and legal influences, both domestically and abroad. One organization, acting
independently, may have very little influence on the forces in the broad environment;
however, the forces in this environment can have a tremendous impact on the
organization. The internal organization includes all of the stakeholders, resources,
knowledge, and processes that exist within the boundaries of the firm.
SWOT ANALYSIS
A ​SWOT analysis i​ s a tool strategists use to evaluate Strengths, Weaknesses,
Opportunities, and Threats. Strengths are company resources and capabilities that can
lead to a competitive advantage. Weaknesses are resources and capabilities that a
company does not possess, to the extent that their absence places the firm at a
competitive disadvantage. Opportunities are conditions in the broad and operating
environments that allow a firm to take advantage of organizational strengths, overcome
organizational in the broad and operating environments that may impede organizational
competitiveness or the achievement of stakeholder satisfaction.
II Strategic Direction
Strategic direction pertains to the longer - term goals and objectives of the organization.
At a more fundamental level, ​strategic direction d​ efines the purposes for which a
company exists and operates. This direction is often contained in ​mission ​and ​vision
statements​. An organization’s mission is its current purpose and scope of operation,
while its vision is a forward – looking statement of what it wants to be in the future.
Unlike shorter - term goals and strategies, mission and vision statements are an
enduring part of planning processes within the company. They are often written in terms
of what the organization will do for its key stakeholders. A well - established strategic
direction provides guidance to the stakeholders inside the organization who are largely
responsible for carrying it out. A well - defined direction also provides external
stakeholders with a greater understanding of the company and its activities. ​BHM |
Welcomgroup Graduate School of Hotel Administration, MAHE, Manipal Year 2019:
Strategic Hospitality Management | BHM 408 Page: 11

III Strategy Formulation

Strategy formulation​, the process of planning strategies, is often divided into three levels:
corporate, business, and functional. One of the most important roles of ​corporate - level
strategy i​ s to define a company ’ s domain of activity through selection of business areas
in which the company will compete. ​Business - level strategy ​formulation pertains to
domain direction and navigation, or how businesses should compete in the areas they
have selected.
Sometimes business - level strategies are also referred to as ​competitive strategies​.
Functional - level strategies ​contain the details of how functional resource areas, such as
marketing, operations, and finance, should be used to implement business - level
strategies and achieve competitive advantage. Basically, functional - level strategies are
for acquiring, developing, and managing organizational resources. These
characterizations are oversimplified, but it is sometimes useful to think of corporate -
level strategies as “ where to compete, ” business - level strategies as “ how to compete
in those areas, ” and functional - level strategies as “ the functional details of how
resources will be managed so that business - level strategies will be accomplished. ”
Corporate - level decisions a ​ re typically made at the highest levels of the organization
by the CEO and/or board of directors, although these individuals may receive input from
managers at other levels. If an organization is involved in only one area of business,
then business - level decisions tend to be made by these same people.
Business - level decisions ​in organizations that have diversified into multiple areas,
which are represented by different operating divisions or lines of business, are made by
division heads or business - unit managers.
Functional - level decisions ​are made by functional managers, who represent
organizational areas such as operations, finance, personnel, accounting, research and
development, or information systems.
IV Strategy Implementation
Strategy formulation results in a plan of action for the company and its various levels,
whereas ​strategy implementation r​ epresents a pattern of decisions and actions that are
intended to carry out the plan. Strategy implementation involves managing stakeholder
relationships and organizational resources in a manner that moves the business toward
the successful execution of its strategies, consistent with its strategic direction.
Implementation activities also involve creating an organizational design and
organizational control systems to keep the company on the right course. ​Organizational
control ​refers to the processes that lead to adjustments in strategic direction, strategies,
or the implementation plan, when necessary.
2. Explain the major perspectives of strategic management in hospitality
business.
Page 6 (textbook)
page 6 onwards (course material)
3. Explain the traditional, resource based and stakeholder perspectives of
strategic management.
Refer above question 2
4. What are the important characteristics associated with strategic
thinking? How can an organization encourage this sort of thinking?
​The company was in search of a strategic thinker, who possesses the six
characteristics of strategic thinking:
1. Intent - focused
2. Comprehensive
3. Opportunistic
4. Long - term oriented
5. Built on the past and the present
6. Hypothesis – driven

5. Hotels and restaurants are among the most competitive businesses in the
world. Elaborate the application of strategic management principles in
hospitality industry. (temporary ans.)
Hotels and restaurants are among the most competitive businesses in the world.
The hospitality industry primarily consists of businesses that provide accommodation,
food and beverage, or some combination of these activities. Hospitality businesses
provide services, which differ from tangible products because they are immediately
consumed and require a people – intensive creation process. They differ from other
service establishments by providing for those who are in the process of traveling away
from home in contrast to local residence, although restaurants often serve both
travelers and local guests. The offering of an experience is also becoming an
important component of hospitality. “Travel and tourism” is a broad term used to
capture a variety of interrelated businesses that provide services to travelers​.
The foodservice industry consists of a wide variety of different businesses,
including institutional providers and food contractors. Contract companies are highly
consolidated after aggressive merger and acquisition activities that gave them strong
positions in the various on - site segments. ​Segmentation i​ s a strategy that
distinguishes properties on the basis of price, service, function, style, offerings, and
type of guest served.

6. Why is analysis of the broad environment important for effective

strategic management?
Page 13 onwards (course material)
7. What are the components of the broad environment? Give an example
of a trend in each area that could affect the welfare of a business
organization.

Refer ans 6
8. Describe the role of lawmakers, regulatory agencies, revenue-collection
agencies and the courts as they relate to doing business in India. Are
these roles likely to be different in other countries?
Lawmakers often pursue legislation in response to requests and pressures
from constituents.
Regulatory agencies and revenue - collection agencies develop the specifics
of the regulations
needed to carry out new laws, and they serve an enforcement role as well.
The courts
handle disputes, interpret laws as needed, and levy fines and penalties.
Although one organization
may not be able to alter major political forces as a whole, it may have
considerable
impact within its own specific industries and operating domain.
Consequently, major political forces are considered a part of the broad
environment, while government agencies and administrators
are considered a part of the operating environment.

9. What are the five forces of competition? Describe their potential

influence on competition in an industry with which you are familiar
with.
10. What role can political strategy play in influencing
regulations? How can firms use political influence to balance power with
strong competitors, suppliers or customers?
Political strategies include all organizational activities that have as one of their
objectives the creation
of a friendlier political climate for the organization. Many large organizations
hire lobbyists
to represent their views to political leaders. While lobbying can be part of a
political strategy,
it is only a small part of the bigger political picture. Companies may donate to
political causes
or parties, special - interest groups, or charities. They may pursue community -
relations efforts or become involved in community service. Most large
organizations have public - relations officers,
and many do public - relations advertising.
11. Describe the major forms of interorganizational
relationships and provide one possible advantage of each form.

•​Joint Venture: An entity that is created when two

or more firms pool a portion of their resources
to create a separate jointly owned entity
•​Network
•​Network :A hub and wheel configuration with a
local firm at the hub organizing the
interdependencies of a complex array of firms
•​Consortia
•​Consortia: Specialized joint ventures
encompassing many different arrangements.
Consortia are often a group of firms oriented
 towards problem solving and technology
development, such as R&D consortia
•​Alliance: An arrangement between two or more firms
that establishes an exchange relationship but has no
joint ownership involved
•​Trade Association
•​Trade Association: Organizations (typically nonprofit)
that are formed by firms in the same industry to
collect and disseminate trade information, offer legal
and technical advice, furnish industry-related
training, and provide a platform for collective
lobbying
•​Interlocking Directorate
•​Interlocking Directorate: Occurs when a director or
executive of one firm sits on the board of a second
firm or when two firms have directors who also serve
on the board of a third firm. Interlocking
directorates serve as a mechanism for interfirm
information sharing and cooperation
12. What really is an organization mission? What is the
difference between a mission and a vision? What can a mission include?
Does a mission have to be formally written down to be effective?
Page 22 onwards (course material)
13. What are some of the key forces influencing strategic
direction in an organization? What is inertia and how can inertia lead a
successful firm to failure?
Page 22 (course material)
14. Describe the three elements that are critical in defining
the business of an organization. Define the business of a large diversified
organization with which you are familiar.
Page 18 (course material)

15. What are five common ethical frames of reference? What

are their limitations.
In making decisions that deal with ethical issues, it is important to have a
frame of
reference. Few ethical dilemmas have simple right - or - wrong answers.
Instead, they are complex
and require balancing the economic and social interests of the organization.
The following
are five theoretical models that often influence organizational decisions:
Economic Theory. Under economic theory, the purpose of a business
organization
is to maximize profits. Profit maximization will lead to the greatest
benefit for the most people. Other than profit maximization, there are no
ethical issues in business.
Limitations of Economic Theory: Assumptions of profits being evenly
distributed
is naive. Not all business decisions relate to profit making, and
some ways of increasing profits hurt society.
Legal Theory. Laws are a reflection of what society has determined is right
and wrong. Compliance with the law ensures ethical behavior.
Limitations of Legal Theory: The social and political processes used to
formulate
laws are complex and time consuming. Because the processes
are subject to manipulation, the laws may not truly reflect the interests
of society.
Religion. Everyone should act in accordance with religious teachings.
Limitations of Religion: As a model for business decision making, religious
values are difficult to apply. There are many different religious beliefs,
and there is no consensus on the behaviors that are consistent with
the beliefs.
Utilitarian Theory. Utilitarian theory says to focus on the outcome of a
decision.
Everyone should act in a way that generates the greatest benefits for
the largest number of people.
Limitations of Utilitarian Theory: Under this model, immoral acts that
hurt
society or a minority group can be justified if they benefit the majority.
Universalist Theory. Universalist theory says to focus on the intent of the
decision. Every person is subject to the same standards. Weigh each
decision
against the screen: Would I be willing for everyone else in the world
to make the same decision?
Limitations of Universalist Theory: This model provides no absolutes.
What
one person believes is acceptable for all in society may be offensive to
others

16. Create a mission statement for a Hotel or a Restaurant of

your choice. Make any logical assumptions that are necessary to
complete the task. Include all the elements of strategic direction,
including vision, business definition, enterprise strategy (what the
 organization does for stakeholders) and a statement of what the
organization values.
17. Describe the generic business- level strategies. Provide an
example of hospitality brands that you think are pursuing each of these
strategies.
18. How can an organization pursue a differentiation
strategy?
19. How can an organization pursue the business-level
strategy of low-cost leadership?
20. What are competitive dynamics? Why has competition
become more dynamic in the food service industry for past few decades.
21. If you were a market leader in a segment of the hotel
industry, which of the strategies that reflect competitive dynamics would
probably be the most attractive to you? If you were a weak competitor
with few resources, which strategy would you likely find attractive?
22. Describe the three basic corporate-level strategies.
23. Elaborate the strengths and weaknesses of concentration
strategy and vertical integration strategy.
24. What is the difference between forward and backward
integration? Which is likely to be more profitable for hospitality firms?
Why?
25. Elaborate as to why an unrelated diversification strategy
generally a good idea?
26. List ten common reasons for mergers and acquisitions.
What are some of the major reasons that mergers and acquisitions often
produce unsatisfactory results?
27. Which of the major restructuring techniques is most likely
to provide rapid results? Defend your answer.
28. Describe some of the key factors that lead to success in
restructuring, regardless of the technique used to restructure?
29. What are some of the key factors that lead to success in
restructuring, regardless of the technique used to restructure?
30. Elaborate the usefulness of BCG Matrix in business
portfolio management.