Strategic Planning and Risk Management Flashcards

A SWOT analysis evaluates a company's:

Answer: Strengths, Weaknesses, Opportunities, and Threats

SWOT analysis is a strategic planning tool that assesses internal strengths and weaknesses alongside external opportunities and threats facing the organization.

Porter's Five Forces model analyzes competitive intensity by examining:

Answer: Rivalry, new entrant threat, substitutes, buyer power, and supplier power

Porter's Five Forces framework assesses industry attractiveness through five competitive forces: competitive rivalry, threat of new entrants, threat of substitutes, bargaining power of buyers, and bargaining power of suppliers.

Enterprise risk management (ERM) is best described as:

Answer: A comprehensive framework for identifying, assessing, and managing risks across the entire organization

ERM is an integrated, organization-wide approach to risk management that addresses all categories of risk — strategic, operational, financial, and compliance — in a coordinated manner.

A company pursuing a cost leadership strategy aims to:

Answer: Achieve the lowest cost structure in its industry to offer competitive prices and earn above-average profits

Cost leadership strategy, as defined by Porter, seeks to become the lowest-cost producer in an industry, enabling competitive pricing or higher margins than rivals.

A key performance indicator (KPI) should be:

Answer: Specific, measurable, and directly tied to strategic objectives

Effective KPIs are specific, measurable, actionable metrics that are directly linked to strategic goals and reviewed regularly to track progress and drive accountability.

The risk response strategy of 'risk avoidance' involves:

Answer: Eliminating the risk by not undertaking the activity that creates it

Risk avoidance eliminates a risk entirely by choosing not to engage in the activity that generates it, often by canceling a project, exiting a market, or changing a business process.