kaplan acca p3 slides - dec 2011

7/22/2019 Kaplan ACCA P3 Slides - Dec 2011

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Business Analysis (BA)


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Chapter 1:

The Nature of Strategic Business Analysis


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The Strategic Planning Process


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Levels of Strategic Planning


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Johnson, Scholes and Whittington


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Johnson and Scholes Lenses


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Business Analysis


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Chapter 2:

The Environment and Competitive Forces


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PESTEL Analysis

This model examines the growth prospects for the industryas a whole. This is achieved by examining 6 factors that

are outside the control of the companies in the industry:

Political factors

Economic factors

Social factors

Technological factors

Environmental factors

Legal factors


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Porters Diamond


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Convergence in Industries


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Porters 5 Forces Model


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The Product Life Cycle

Sales

Time

Introduction Growth Maturity Decline

The four stages of a products life


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Strategic Groups

These are organisations with:

same industry similar strategic characteristics

following similar strategies/ competing

on a similar basis can have similar assets and skills


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Strategic Group Positioning


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Chapter 3:

Marketing and the value of goods and services


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Customers and Markets

There are 3 strategic questions that areused to analyse customers:

segmentation

motivation

unmet needs


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Market Segmentation


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Marketing styles

There are three ways to market a productin order to account for the fact that

different segments have different needs:

undifferentiated marketing

differentiated marketing

niche/target marketing


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Marketing Mix Strategies


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Critical Success Factors

performance requirements that are

fundamental to an organisation's success. In

this context CSFs should thus be viewed as

those product features that are particularlyvalued by customers. This is where the

organisation must outperform competition.


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Value Chain Analysis


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Benchmarking

to provide a target for action in order toimprove competitive position.

They can take many forms:

strategic

historical

industry

best-in-class

international


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Chapter 4:

Internal resources and competencies


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Capabilities

Resources Basic Unique

Threshold Core

Same as CompetitorEasy to Copy

Different andDifficult to Copy

Competencies


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Resource Audit (Ms model)

An organisations resources can beorganised into the following categories:

Men

Money

Markets

Materials

Management

Make-up

Manufacturing/Machinery


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Sustaining Competitive

Advantage

The capabilities needed to sustaincompetitive advantage are:

Value of strategic capabilities

Rarity of strategic capabilities

Robustness of strategic capabilities


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Other ways to gain

competitive advantage

innovation by the time the competition catch up, the innovator

has built up brand loyalty and a defendable position

knowledge management this encourages innovation and sharing, and it

reduces complexity. It also ensures continuity as

staff turnover


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SWOT Analysis


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Chapter 5:

Stakeholders, ethics and culture


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The need for corporate

governance

The gap between ultimate beneficiaries andthose making day-today decisions can be large

and agents might not know what the

beneficiaries want.

Self-interest can cause agents to work for

their own benefit at the expense of their

principals (remuneration packages, shareoptions, budget padding, short-termism to make

current results look good at the expense of

long-term performance).


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Typical features

boards should have non-executive directors to adviseand warn the executive directors. Executive and non-executive directors (NEDs) should be in balance so thatneither group dominates

there should be a separation of the roles of chairman andchief executive

executive remuneration should be decided by aremuneration committee, consisting of non-executive

directors

an audit committee, comprising non-executive directorsshould look after the appointment of supervision of auditors.


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Impact of Corporate Governance

Greater shareholder power

Greater pressure

Greater scrutiny

Greater need for risk assessments


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Stakeholder Mapping

Minimal

Effort (A)

Keep

Informed (B)

Keep

Satisfied (C)

Key

Players (D)

Level of Interest

Power

High

High

Low

Low


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Ethics

Ethical issues arise at three levels:

Macro level

Corporate level

Individual level


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Ethical Stances

The extent to which an organisation willexceed its minimum obligations to

stakeholders.


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Corporate Social Responsibility

The following are common areas wherebusinesses get involved in CSR issues:

work creation and training programmes

sponsorship of the arts and sport

employee welfare programmes

community welfare programmes

support for educational institutions and links withbusiness

contributions to overseas aid

environmental programmes.


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Organisational culture

The concept of the cultural web is a useful device for mapping

out change but its real worth is in the fact that we can identify

which elements of culture need to change.


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Mission Statements

A mission statement should contain the following:

purpose

strategy

policies and Standards of Behaviour values.

Also:

mission statements should be short typically half a page note that mission statements can have a valuable role in

setting ethical standards and organisational culture.

Chapter 6:


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Chapter 6:

Strategic ChoiceI


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Corporate Parenting

The issue for corporate parents whetherthey:

add value to the organisation and givebusiness units advantages that they

would not otherwise have

add cost and so destroy the value that

the business units have created.


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Rationales for adding value

A well-managed corporate parent should be ableto add value. Johnson, Scholes and Whittingtonidentify three corporate rationales or roles adoptedby parents in order to do this:

portfolio managers

synergy managers

parental developers.


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Boston Consulting Group Matrix

Relative Market Share

%ratemark

etgrowth

+1 -1

10%

Chapter 7:


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Chapter 7:

Strategic Choice II


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TOWS AnalysisInternal Factors

External

Factors

Strengths (S) Weaknesses (W)

Opportunities

(O)

Examine strategies

that use strengths

to make use ofopportunities (SO).

Examine strategies

that take advantage

of opportunities byovercoming or

avoiding

weaknesses (WO).

Threats (T) Examine strategiesthat use strengths

to overcome or

avoid threats (ST).

Examine strategiesthat minimise the

effect of

weaknesses and

avoid or overcome

threats (WT).


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Directions for Growth - Ansoff

Existing

Existing

New

NewProducts

Markets Marketpenetration

DiversificationMarket

development

Productdevelopment


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Diversification

CORE ACTIVITY

FORWARD VERTICAL INTEGRATION

BACKWARD VERTICAL INTEGRATION

HORIZONTAL

DIVERSIFICATION

UNRELATED

DIVERSIFICATION


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Implementing growth

Organic Growth

Internal development

Easier to control?

Can be risky if not enough skills or

experience


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Implementing growth

Mergers & Acquisitions

Assess by synergy

Transfer of Skills Sharing activities


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Implementing growth

Joint Development

Joint Venture

Franchise

Licence Agency

StrategicAlliance

St t i f C titi


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Strategies for Competitive

AdvantageThere are three generic strategies through which an

organisation could achieve competitive advantage:

Cost leadership, where there is great emphasis onkeeping costs down. This opens up the profit margin bylowering costs, ideally more than any competitor can.

Differentiation, where a better product or service issold. This opens up the profit margin by raising sellingprices.

Additionally an organisation can choose a focus strategy,where the organisation concentrated on a small segmentof the market. Within the focus strategy, the organisationmust choose whether or not to become a cost leader or adifferentiator.


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The Strategy Clock


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Strategies for hyper-competition

Reposition on the strategic clock

Competing successfully

Fight and overcome competitors

strategies

Overcome previous barriers to entry


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Strategy Evaluation

Key words

Acceptability

FeasibilitySuitability

Ch t 8


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Chapter 8:

Organisational Structure


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The boss

Everyone else

Entrepreneurial structure

Organisational structure


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Functional Structure

Board

Production Sales R&D Finance HR


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Divisional Structure

Division 1 Division 2 Division 3

Board

Central functionseg finance, HR

Production Sales R&D


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Matrix Structure

Production

Manager

Purchasing

Manager

Manager

Customer B

Manager

Customer A


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Virtual Organisations

An example:

Chapter 9:


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p

Business Process Change


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Business Processes

Every business has unique characteristics embedded inits core processes that help it achieve its goals and createcompetitive advantage.

Strategic business processes, such as new productdesign or high sensitivity customer care, provide uniqueand durable business advantages to organisations.

Looking at the business in terms of activities andprocesses opens up scope for challenging the waysin which things are done, and coming up withimprovements, or sometimes more radical changes.

H t t


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Harmons process-strategy

matrix

According to Harmon, BPR should be

focused on those activities which are:

of high strategic importance

likely to be complex and dynamic

These are normally the processes that

provide competitive advantage and overall

company success.


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Business Process Redesign


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Software Solutions

BPR will often mean there is a need for new

software in order for the change to work

effectively and efficiently.

The key decision here is whether to buy in a

ready made/generic software package orto pay for a bespoke system

Chapter 10:


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p

Information Technology


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Strategic Context

IT can form an important part in the entire strategicplanning process. For example

it can help provide new technological developments

which open up growth opportunities

It can help a business cope with its competitiveenvironment and market position

Strategic choice can be made easier through the use of

IT

IT can help in strategy implementation IT can help review performance and monitor controls


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McFarlans Grid


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E-business

The stages of e-business:

1. Web presence

2. E-commerce

3. Integrated e-commerce

4. E-business


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Supply Chain Management

The transformation of product from node tonode includes activities such as:

production planning

purchasing

materials management

distribution

customer service

forecasting


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Push vs Pull SCM

Push = supplier-led.

Pull = customer/ market led. Consumershave a direct voice in the functioning of thesupply chain. This is what e-commercefacilitates and this was very rare prior to

the development of e-commerce. Manybusinesses have developed this furtherinto upstream SCM

Impact of successful


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Impact of successful

downstream SCM

Customers become more reluctant to

switch

Disintermediation Continual updates

Cheaper communication

Consumer/ user groups Better information on consumers

Customers can start to customise products


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E-marketing


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E-marketing: the 7Ps

E-marketing involves extending the original 4Ps of

marketing (product, price, promotion and place) to

incorporate the following:

people/participants

processes

physical evidence

6 s: Benefits over Traditional


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6s: Benefits over TraditionalMarketing Methods

Customer Relationship Management


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Customer Relationship Management

(CRM)

There are 4 stages in the customer life cycle:

Selection

Acquisition

Retention

Extension

IT can play a pivotal role in improving all aspects of

CRM

Chapter 11:


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Chapter 11:

Quality


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Benefits of Improving Quality

It is a differentiator

Reduced internal failure costs

Reduced external failure costs

Potentially requires less capital investment

However there may be an increase in:

Prevention costs

Appraisal costs

Quality Control vs Quality


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Quality Control vs Quality

Management

Quality control = reactive (old way to do

things)

Quality management = proactive (themodern way to improve quality)


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Total Quality Management

Everyones involved

Customer focused

Internal and external buyer/supplierrelationships established

Try to get it right first time

Use a kaizen system


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The V-model

Capability Maturity Model


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Capability Maturity Model

Integration (CMMI)

Th Si Si A h


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The Six Sigma Approach

This is an extension of the TQM approach.

It is a data-driven approach it uses a wide

range of statistical calculations and techniques to

examine and analyse quality problems

It aims to reduce the variation in process outputso that there are no more than 3.4 defects per

million opportunities

DMAIC


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DMAIC

Define

Measure

Analyse

Improve

Control

Chapter 12:


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Chapter 12:

Project Management

ProjectManagement

Projectfeatures andconstraints

Project RiskManagement

ProjectPlanning

ProjectInitiation

The ProjectPlan

ProjectCompletion

Managing andLeadingProjects

P j t C t i t


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Project Constraints

Cost

Time

Scope

Project Risk Management


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Project Risk Management

Risk management comprises:

risk assessment (identifying and

analysing risk) assessing the lossprobability and magnitude for each item

risk control (taking steps to reducerisk, provide contingency and monitor

improvements).

H t i k


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How to manage risk

Ignore it

Insure against it

Transfer it

Mitigate it

C t t f j t l


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Contents of a project plan

A i P j t Q lit


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Assessing Project Quality

Define

Measure

Analyse Design

Verify

Chapter 13:


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p

Finance & Strategy

Diff t O i ti l T


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Different Organisational Types

Listed Companies

Non-listed businesses

Not for Profit organisations

Funding Sources


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Funding Sources

What to consider


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What to consider

Cost

Gearing

Control

Security

Cash flow Availability

Exit routes

Funding of NFPs


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g

Strategic funding

Self-generated income

Developmental funding

Cost minimisation

Project returns

Working Capital Management


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Working Capital Management

Investment Appraisal Ratios


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Investment Appraisal Ratios

Chapter 14:


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p

Strategy and People

Objectives of HRM


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Objectives of HRM

Identifying the kinds of talent needed Recruiting an adequate supply

Developing peoples potential by training,

development and education.

Retaining as high a proportion as possible

Motivating the talented personnel

Improving the performance and productivity

of the most talented.

Creating an organisational culture in which

talent is nurtured and can flourish

Leadership


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Leadership

An effective leader will need

Vision

Communication Passion and motivation

Flexibility

Appraisal Systems


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Appraisal Systems

A good appraisal system should have:

Relevance

Fairness Serious intent

Cooperation

Efficiency

Facilitating change


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Facilitating change

Project and strategic change need staffsupport. In order for these changes to be

effective they may need:

new output measures

new skills and competences required

changes to roles and job descriptions changes to responsibilities

Reward Systems


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Reward Systems

When designing a reward system weshould consider:

Organisational objectives CSFs and KPIs

Desired behaviour

Competitor systems

Legislation

Constraints

Human Resources and Strategy


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Human Resources and Strategy

HRM is becoming increasingly important to businesses:

people are seen as a major source of competitive advantage,

training and development is seen as an investment, not a cost

learning is seen as essential

employees expect to learn and change and retrain as necessaryas strategy demands

Staff development is seen as a key management role

changes outside the organisation are reflected in changes to

training and development needs

human resource implications are considered as part of strategicplanning.

Chapter 15:


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Managing Change

Reasons for Strategic Change


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Reasons for Strategic Change

There are many ways in which a businessstrategy might change. But these fall into twogeneral categories:

planned/intended strategic changes

emergent strategic changes

In either case, the change process will have tobe managed and led well by seniormanagement.

Types of Strategic Change


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TransformationIncr.

Big Bang

Realignment

Extent of Change

Sp

eedofChange

Evolution

Reconstruction

Adaptation

Revolution

Types of Strategic Change

Barriers to Change


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Barriers to Change

The Change Process


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The Change Process

Lewin suggested that successful change is

achieved in three stages:

Unfreezing existing behaviour

Making the change

Refreezing the new behaviour

Contextual Features


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Leadership Styles


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Leadership Styles

kaplan acca p3 slides - dec 2011

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