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JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY

UNIVERSITY EXAMINATIONS 2020/2021

THIRD YEAR SECOND SEMESTER SUPPLEMENTARY/SPECIAL EXAMINATION

HBC 2303: STRATEGIC MANAGEMENT

DATE: MARCH 2021 TIME: 2 HOURS

INSTRUCTIONS: ANSWER QUESTION ONE (COMPULSORY) AND ANY

QUESTION ONE: 30 MARKS

a. Define strategic management. How does it differ from management. (5 marks)

b. Briefly explain the role of Top Management in strategic implementation

c. Your director has just registered you to prepare a presentation about PESTEL to
be delivered in a business conference in two weeks time. Briefly explain to him
what exactly you will be presenting. (15 marks)

QUESTION TWO: 20 MARKS

Strategic management is a religious process that helps manger deploy the best strategies
to achieve competitiveness in the ever dynamic environment. Clearly explain the
strategic management process.

QUESTION THREE: 20 MARKS

a. Compare and contrast the various levels of management clearly stating what each
level entails. Give one example of a strategy that lies in each level of
management. (12 marks)

b. Compare and contrast strategy formulation and strategy implementation.

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QUESTION FOUR: 20 MARKS

Using an existing firm for illustration, explain how the SWOT matrix works. What may
be the limitations of the SWOT Matrix?

QUESTION FIVE: 20 MARKS

Using an existing business enterprise as an illustration, explain how strategists use the
BCG matrix in analyzing their business units or product lines.

Answers
Question One:
a. Strategic Management: Strategic management refers to the process of planning,
executing, and evaluating an organization's strategies to achieve its long-term goals and
objectives. It involves the identification of an organization's strategic direction, making
decisions on allocating resources to pursue these goals, and adapting to changes in the
external environment. Strategic management goes beyond day-to-day operations and
focuses on positioning the organization for sustainable success in the future.
Difference from Management: While management involves overseeing daily operations
and ensuring tasks are completed efficiently and effectively, strategic management is
concerned with the big picture. It involves setting the organization's overall direction,
defining its purpose, and aligning resources and efforts to achieve long-term goals.
Strategic management is forward-looking and emphasizes making decisions that will
impact the organization's future success, whereas management often deals with
immediate tasks and operational issues.
b. Role of Top Management in Strategic Implementation: Top management plays a
crucial role in strategic implementation by providing leadership, direction, and oversight
to ensure that strategic plans are executed effectively. Their responsibilities include:
 Setting Direction: Top managers define the organization's strategic vision,
mission, and objectives. They clarify the strategic intent and communicate it
throughout the organization.
 Allocating Resources: They allocate resources such as budget, manpower, and
technology to support the implementation of strategic initiatives.
 Organizational Alignment: Top management ensures that the entire organization
is aligned with the strategic goals. They make sure that different departments and
teams work cohesively towards the same objectives.
 Monitoring Progress: Top managers monitor the progress of strategic initiatives,
review performance metrics, and make adjustments as needed to keep the
organization on track.
 Decision Making: They make critical decisions related to prioritizing projects,
resolving conflicts, and adapting strategies based on changing circumstances.
c. PESTEL Presentation Explanation: In the presentation about PESTEL, I will be
discussing a strategic analysis framework that evaluates the external macro-

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environmental factors affecting an organization. PESTEL stands for Political, Economic,
Social, Technological, Environmental, and Legal factors. These factors influence an
organization's business environment and decision-making processes. The presentation
will cover each aspect of the PESTEL framework and provide insights into how these
factors impact an organization's strategies, operations, and long-term success. It will help
conference attendees understand the importance of considering these external factors
when formulating and implementing strategies.

Question Two:
Strategic management is not a religious process but rather a systematic approach to
achieving competitive advantage. The strategic management process involves the
following steps:
1. Environmental Analysis: This involves assessing the internal and external factors
that can affect the organization's performance. This includes conducting a SWOT
analysis (Strengths, Weaknesses, Opportunities, Threats) to identify the
organization's internal strengths and weaknesses and external opportunities and
threats.
2. Strategy Formulation: Based on the analysis, the organization formulates
strategies that align with its goals and resources. This step involves defining the
organization's mission, setting specific objectives, and choosing strategies to
achieve those objectives. Different strategies might include market penetration,
product development, market expansion, or diversification.
3. Strategy Implementation: This is the process of executing the chosen strategies.
It involves allocating resources, structuring the organization, and developing
action plans to put the strategies into practice.
4. Strategy Evaluation: After implementation, the strategies' outcomes are assessed
against the set objectives. Performance metrics are used to measure progress and
identify areas where adjustments are needed.
5. Strategic Control: Continuous monitoring and control mechanisms are
established to track progress and ensure that the strategies are being implemented
effectively. Adjustments are made as needed to keep the organization on track.
6. Feedback and Learning: The organization learns from its successes and failures,
incorporating feedback into future strategies. This step ensures that the strategic
management process is an ongoing and adaptive one.

Question Three:
a. Levels of Management Comparison:
1. Top-Level Management (Strategic Level): This level comprises executives
responsible for the overall direction and long-term strategies of the organization.
They set the vision, mission, and objectives. Example strategy: Deciding to
expand into a new international market.
2. Middle-Level Management (Tactical Level): Middle managers oversee specific
departments and functions. They translate the overall strategies into actionable
plans and allocate resources accordingly. Example strategy: Creating a marketing
campaign to increase brand awareness.

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 3. Lower-Level Management (Operational Level): Operational managers are
responsible for daily operations and supervising front-line employees. They ensure
that tasks are carried out efficiently. Example strategy: Implementing a new
inventory management system to streamline supply chain processes.
b. Strategy Formulation vs. Strategy Implementation:
 Strategy Formulation: This involves the process of analyzing the internal and
external environment, defining the organization's goals, and developing strategies
to achieve them. It's about deciding where the organization wants to go and how it
will get there.
 Strategy Implementation: This is the phase where the formulated strategies are
put into action. It involves allocating resources, structuring the organization,
assigning responsibilities, and executing action plans to achieve the established
goals.
While strategy formulation is more about planning and decision-making, strategy
implementation is about execution and operationalizing the plans.

Question Four:
The SWOT matrix is a tool used for strategic planning and analysis. It involves
identifying an organization's internal strengths and weaknesses (S-W) and external
opportunities and threats (O-T) to develop strategies that leverage strengths, address
weaknesses, seize opportunities, and mitigate threats. Here's how it works using an
existing firm, "Company X," as an illustration:
Strengths (S): Company X has a strong brand reputation and a dedicated customer base.
Weaknesses (W): Company X's production process is outdated, leading to higher costs
compared to competitors.
Opportunities (O): There's a growing market demand for eco-friendly products, and
Company X has the potential to innovate in this area.
Threats (T): New regulations in the industry might require costly adjustments to
Company X's operations.
Limitations of the SWOT Matrix:
 Simplicity: The SWOT matrix oversimplifies complex situations and might not
capture all nuances.
 Lack of Prioritization: It doesn't provide a clear method for prioritizing factors or
strategies.
 No Weighted Analysis: It treats all factors equally, whereas some might be more
impactful than others.
 Static Analysis: It might not reflect dynamic changes in the environment over
time.
 Subjectivity: Different individuals can interpret and fill out the matrix differently.
 Doesn't Provide Detailed Guidance: It outlines factors but doesn't give detailed
guidance on how to address them.

Question Five:
The BCG matrix (Boston Consulting Group matrix) is a tool used to analyze a company's
business units or product lines based on their market growth rate and relative market

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share. Here's how it works using an existing business enterprise, "Company Y," as an
illustration:
 Stars: High-growth products or business units with a strong market share. They
require investment to maintain growth. Example: Company Y's new innovative
smartphone line.
 Question Marks (Problem Children): High-growth products with low market
share. They require careful consideration on whether to invest more or divest.
Example: Company Y's experimental AI-powered home automation devices.
 Cash Cows: Low-growth

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products or business units with a high market share. They generate steady cash flow that
can be used to support other units. Example: Company Y's established line of office
software products.
 Dogs: Low-growth products with a low market share. They might not generate
much profit and might not be worth investing in. Example: Company Y's outdated
and low-selling fitness wearables.
Strategic Implications:
 Stars can become future cash cows if their growth is sustained, so investments are
often directed to maintain their growth trajectory.
 Question marks require careful analysis. If they have potential, investments might
be made to increase their market share, turning them into stars. If not, divestment
might be considered.
 Cash cows generate funds that can be reinvested into other units or for strategic
initiatives.
 Dogs might be considered for divestment if they're not contributing to the
company's overall goals.
The BCG matrix helps strategists allocate resources and make decisions about the
company's business portfolio. However, it has limitations:
 Simplification: It oversimplifies complex business situations by focusing solely
on two factors (market growth rate and market share).
 Market Share Focus: It doesn't consider other factors that might influence
success, such as competition, market trends, and technological changes.
 Static View: It assumes that market conditions are stable, while markets are often
dynamic and subject to rapid changes.
 Market Growth Rate Definition: The definition of "high" or "low" market
growth can vary between industries and over time.
 Neglects Synergies: It might not account for potential synergies between business
units or product lines that could impact their overall success.
Strategists should consider these limitations while using the BCG matrix as part of their
strategic analysis.