Question

Which of the following options best describes what a business strategy does?

1) Sets forth management's game plan for maximizing profits for shareholders
2) Details exactly how management's strategy will result in the achievement of the company's strategic intent
3) Explains how it will achieve high profit margins while at the same time charging relatively low prices to customers
4) Sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner
5) Sets forth management's long-term action plan for achieving market leadership

Answer 1

The best description of what a business strategy does is option 4, which encompasses setting forth the business approach, revenue generation, and value delivery to customers in a profitable way.

Step-by-step explanation:

The question asks which option best describes what a business strategy does. Among the given choices, the one that most accurately captures the essence of a business strategy is option 4. Option 4 states that a business strategy "Sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner."

This definition recognizes the multifaceted nature of business strategy, demonstrating that it is not solely about profit maximization or market leadership but includes understanding the business approach, revenue generation, and delivering value to customers in a profitable way.

Business strategies are crucial for guiding a company in a competitive landscape, ensuring that they can adapt to market conditions while also catering to customers' needs and organizational profit goals.