Skip to content

IAI Actuarial Core Principles · Business Management · Strategy, competitive advantage, strategic decision process and PEST analysis

A junior actuary at Himalaya Life asks why strategy is described as a means of gaining sustainable advantage rather than a list of annual targets. Which reply is most accurate?

Strategy concerns the long-term positioning of an organisation relative to competitors and its environment, and annual targets are only tools for monitoring progress against it. It is not limited to listed firms or pricing, and it is not fixed permanently because it must adapt as conditions change.

  1. AStrategy is about the long-term positioning of the organisation relative to competitors and the environment, whereas annual targets are tools for monitoring progressCorrect
  2. BAnnual targets are the whole of strategy, since they are measurable
  3. CStrategy applies only to organisations listed on stock exchanges
  4. DStrategy is fixed for ever once the mission statement is written
  5. Strategy concerns only the choice of product prices

Explanation

Strategy deals with long-term direction and positioning against competitors and the environment. Annual targets are derived from it for control purposes. Strategy is not limited to listed firms, to pricing, or fixed permanently, since it must adapt to change.

Did you get it right without looking?

One question tells you little. A timed set on Strategy, competitive advantage, strategic decision process and PEST analysis shows your real accuracy, how long you take and where you lose marks.

Practise Strategy, competitive advantage, strategic decision process and PEST analysisFree diagnostic mock

More Strategy, competitive advantage, strategic decision process and PEST analysis questions