Strategic Planning & Analysis Flashcards

When performing an environmental scan for a floral business, which framework analyzes Political, Economic, Social, Technological, Environmental, and Legal factors?

Answer: PESTEL

PESTEL analysis examines six macro-environmental factors that can impact a business's strategic opportunities and threats.

A floral designer is considering adding dried floral arrangements to her product line. Which analysis would BEST inform this product diversification decision?

Answer: A demand analysis, cost modeling, and competitive landscape review for dried florals

Product diversification requires validating market demand, understanding new cost structures, and assessing competitive dynamics before committing.

A floral studio owner notices that her net profit margin has declined despite rising revenue. The MOST likely strategic cause is:

Answer: Rising costs or an unfavorable shift in revenue mix are outpacing revenue growth

Profit margin compression despite revenue growth typically signals that costs are rising faster than revenue or that higher-cost, lower-margin work is increasing as a share of sales.

Which of the following is an example of a 'differentiation strategy' for a floral designer in a competitive urban market?

Answer: Specializing exclusively in sustainable, locally sourced, zero-waste floral design

Differentiation creates competitive advantage by offering unique value that rivals cannot easily replicate, justifying premium pricing.

A florist tracking her Net Promoter Score (NPS) finds it has dropped from +45 to +20 after a busy holiday season. The strategic priority should be:

Answer: Investigating service quality issues during the high-volume period and implementing corrective processes

A falling NPS signals declining customer experience quality; root-cause analysis and process improvement are required before the next peak season.

What is the strategic significance of calculating 'contribution margin' for individual floral product lines?

Answer: It reveals how much each product line contributes to covering fixed costs and generating profit

Contribution margin (revenue minus variable costs) shows which product lines are most effective at covering overhead and building profit.

A floral business owner is evaluating whether to lease a second retail location. Which strategic framework would BEST structure the decision?

Answer: A cost-benefit analysis combined with a scenario planning exercise for optimistic, base, and pessimistic outcomes

Major capital decisions require quantifying expected costs and benefits across multiple scenarios to ensure the business can absorb downside risk.