TOPCIMA Advanced Strategic Analysis

1
TOPCIMAAdvanced Strategic Analysis Business
Strategy

• CIMA Paper 10

2
Strategy Question and Process

• A means to achieve the objectives
• A basis for competitive advantage

Two Basic Questions
Where to Compete
How to Compete
3
Strategic Planning Process
Internal Env
Position Audit
Options
Evaluation and Choice
Implementation and Control
Mission and Objectives
External Env
4
Stakeholder Mapping




Low
Minimal Effort
Keep Informed
Power
Keep Satisfied
Key Players
High
Level of Interest
High
Low
5
Sources of Data

• Primary data collection
• - Observation - Surveys

• Secondary data collection
• - Internal sources - accounting / marketing
  data
• - External sources - Periodicals / internet

6
The Pestel Framework

• Political
• Economic
• Social
• Technical
• Environmental-social responsibility
• Legal

7
5 Forces
Threat of New Entrants
Power of Buyers
Power of Suppliers
Rivalry
Threat of Substitutes
8
Competitive Advantage of Nations Porters Diamond
Demand Conditions
Related and Supporting Industries
Strategy, Structure and Rivalry
Factor Conditions
9
The Life Cycle
Maturity
Intro
Decline
Growth
Sales
Time
10
Competitor Analysis

• Strategy where and how
• Resources and competences
• Objectives are they being met?
• Assumptions culture?
• Competitors who are they?
• Predictions for the future?
• What are they likely to do in the future?
• How will they respond to our initiatives?
• How can we influence their reactions to our
  initiatives?

11
Resources and Competences
Different and Difficult to Copy
Same as Competitor Easy to Copy
Basic
Unique
Resources
Threshold
Core
Competence
12
The Value Chain
Infrastructure
Human Resource Management
Technology
Margin
Procurement
Inbound Logistics
Operations
Service
Marketing and Sales
Outbound Logistics
13
The Position Audit
Where are we now?
Internal Environment
External Environment
Weakness
Threat
Strength
Opportunity
What happens if we do nothing?
14
Gap Analysis
Objective
Objective Measure
Future operations
Current operations
Time
15
Porters Generic Strategies
How
Differentiation
Cost Leadership
Broad Scope
Where
Focus
Narrow Scope
16
Ansoff Growth Strategies
Product
Existing
New
Market Penetration
Product Development
Market Development
Diversification
17
Boston Consulting Group
Market Share
High
Low
Star
Problem Child
Cash Cow
Dog
18
Assessing the Viability of Strategy

• Feasibility
• Resources
• Competencies
• Implementation

• Suitability
• Objectives
• Strengths
• Opportunity

Acceptability To Stakeholder Groups
19
Information Issues
Sources
Internal
External

1. Who
2. When
3. Why
4. What

Reliability Known
Reliability ?

• Broader Focus
• Less Cultural
• Distortion

More Relevant
Relevance ?
20
Knowledge Management
The management of the information, knowledge and
experience available to an organisation.
Create Capture Store Make Available Utilise
To Build a Competitive Advantage
21
Knowledge Management
To Build a Competitive Advantage
Structural Capital
Human Capital

• Development
• Maintenance
• Retention

• Innovation intellectual property
• Customer address lists / records
• Organisational processing systems

22
Determination of the Measurement Mix
Identify Objectives
Draft CSF
Update the CSF
Position Review
Draft a Mix
Consider Change Implications and Test
Deploy and Monitor
23
The Balanced Scorecard
Financial
Operations
Customer
IT?
Learning
HR
Research
Kaplan and Norton
24
Benchmarking

• Identification of best practice.

Internal
Process
Competitor
Different Company Similar Process
Similar Process Direct Competitor
Same Company Different Department
25
Shareholder Value

• Shareholder value

Present value of free cash flow from operations
plus value of marketable securities - Value of
debt
26
Change Management

• Key executive commitment
• Objectives of change identified
• Communication and training
• Performance measures The BSc
• Team and budget
• Appoint change champion
• Participation

27
Earls Three levels of Strategy
What
IS Strategy

• Division/SBU/function based
• Demand orientated
• Business focussed

IM Strategy
Wherefore
Applications

• Organisation based
• Relationship orientated
• Management focused

Management
IT Strategy
How

• Activity based
• Supply orientated
• Technology focused

Delivery
28
McFarlans Strategic Grid
Low
Strategic Impact of Future Systems
Strategic Impact of Current Systems
Support
Turnaround
Factory
Strategic
High
High
Low