Strategic Management

Major disadvantages:
Reduces Quality. There are only so many quality companies and even less that are priced at levels that provide a margin of safety
Too Complicated
Indexing
Market Risk
Below Average Returns
Bad Investment Vehicles

77. 
    What are the major advantages and disadvantages of an integrative strategy?
    

The advantages include increasing market share, reducing competition, and creating economies of scale. Disadvantages include regulatory scrutiny, less flexibility, and the potential to destroy value rather than create it.

77. 
    How does strategic management differ in for-profit and nonprofit organizations?
    

A strategic plan is used by any organization -- for-profit or nonprofit -- to establish goals as well as to review operations. Some organizations do them yearly, while others do them every 3-5 years. These goals are one of the first major differences in for-profit and nonprofit organizations' strategic plans.

77. 
    Why is it not advisable to pursue too many strategies at once?
    

Organizational resources are too scattered when more than one strategy is being implemented at the same time. No organization can follow all the strategies that can benefit it. Too many strategies cannot be effectively sold and funded at the same time.
Strategic management is like a management journey. For a smooth journey, you will also need a good and suitable highway to drive and eventually reach your destination.

77. 
    What are the pros and cons of a firm merging with a rival firm?
    

Pros:
Economies of scale – bigger firms more efficient
More profit enables more research and development.
Struggling firms can benefit from new management.

Cons:
Increased market share can lead to monopoly power and higher prices for consumers
A larger firm may experience diseconomies of scale – e.g. harder to communicate and coordinate.

77.