Explanation : Based on past experiences, judgment, and feelings, intuition is essential to making good strategic decisions. Intuition is particularly useful for making decisions in situations of great uncertainty or little precedent. It is also helpful when highly inter-related variables exist when there is immense pressure to be right, or when it is necessary to choose from several plausible alternatives, These situations
describe the very nature and heart of strategic management.
Explanation : The Five Forces model developed by Michael E. Porter has been the most commonly used analytical tool for gramining competitive environment. According to this model, the intensity of competition in an industry depends on five basic forces. These five forces are:
1. The threat of new entrants
2. The intensity of rivalry among industry competitors
3. Bargaining power of buyers
4. Bargaining power of suppliers
5. The threat of substitute products and services.
Each of these forces affects a firm’s ability to compete in a given market. Together, they determine the profit potential for a particular industry. To Wnderstand industry competition and profitability, one must analyze the industry’s underlying structure in terms of the five forces, as shown in the figure below.
Explanation : VED Analysis: Just like ABC Analysis for the classification of inventories, there is an inventory management technique called VED. In VED analysis inventory items are classified depending upon their critically in terms of their effect on the production function. The degree of criticality states whether the item of inventory is vital, or essential or desirable for the retail store;, This classification of dividing inventory is known as VED analysis, where V stands for vital, E stands for essential and D stands for desirable items. Objective: The VED analysis is applied to determine the criticality of an item for displaying in a retail store and its immediate effect on overall buying and other services. It is specially used for material management. Under this analysis, for ‘V’ items, a large stock of inventory is usually maintained, while for ‘D’ type items, the minimum stock is sufficient.