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E3 CIMA > Chapter 4 - Resources and Capabilities > Flashcards

Chapter 4 - Resources and Capabilities Flashcards

1
Q

Position Audit

A 
Planning process to examine:
resources of in-/tangible assets and finance
products, brands and markets
operating sys (prod and distr)
internal org
current results
stockholders returns
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2
Q

Resource audits limiting factors (M’s)

A 
machinery
make-up (culture and structure of Co)
Management
Info
Markets
Materials
Men and women
Methods
Money
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3
Q

Competitive resources

A 
market share
market growth
product quality
leadership
purpose and objectives
management and workers
financial position
profit performance
investment practice
R+D / Innovation
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4
Q

Strategic capabilities

A

Suitable business model?

People, process, resources in place?

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5
Q

Limiting factors definition

A

Anything which limits the activity of an entity. An entity seeks to optimise the benefit from the limiting factor.

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6
Q

Efficiency vs Effectiveness

A

Efficient: how well resources have been utilised

Efficient: deploying resources in the best possible way.

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7
Q

Value drivers

tangible and intangible

A 
TANGIBLE
increase sales
increased profit margin
reduce cash tax rate
reduce incremental capex
reduce working capital
increase competitive advantage timelines
reduce cost of capital
INTANGIBLES
superior management
employees skills and knowledge
brand and reputation
IP
networks and linkages
quality management
first mover advantage
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8
Q

Value chain

A

sequence of business activities by which in the perspective of the end-user value is added.

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9
Q

Porter Value Chain

A

Support: infra, HR, Tech Dev, Procure

Primary: inbound, ops, outbound, Marketing, Service

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10
Q

Using the value chain for:

A

new or better ways to perform activity
combine activities in new or better ways
manage linkages to increase efficiency
manage value system to increase efficiency

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11
Q

Value system

A

series of value chains (of supplier, own, distributor, customer)

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12
Q

Value chain costing challenges

A

Structural decision drive costs (scale, scope, etc)

lack of data precision
subjectivity of a customer benefit
Value chain needs ABC

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13
Q

Value shop

A

Problem finding, evaluate solving, choice, solution implementation, feedback and control

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14
Q

3 main supply chain themes

A

Responsiveness
Reliability
Relationships

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15
Q

Push vs pull model

A

Push according to schedules

Pull according to demand

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16
Q

Drivers of supply chain performance

A 
facilities
inventory
transportation
information
sourcing
pricing
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17
Q

Supply Chain Management (SCM)

A

Planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities.

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18
Q

SCM covers:

A

aim to have a network from raw material to final product

19
Q

SCM Service level agreement (SLA) covers

A

explanation of service
benchmarks to measure performance
procedures for dealing with complaints
procedure for cancelling

20
Q

Partnership approach

A

need for essential suppliers
supplier should have a similar quality concept

Problems:
each partner needs to remain competitive
danger of loss of flexibility
relative bargaining power
arguments about profit sharing
21
Q

EDI
ERP
RFID
SCM

A

Electronic data interchange
Enterprise resource planning
Radio frequency identification
Supply chain management

22
Q

Choosing supplier criterias

A 
price
quality
quantity (capacity)
flexibility
speed (how quickly)
reliability
customer service
location
number of suppliers
credit terms
financially security
relative size
23
Q

e-procurement components

A

e-sourcing (identifying new suppliers)
e-purchasing (product selection and order)
e-payment

Benefits:
cost reduction
lower inventory
control
wider choice of suppliers
quicker ordering
staff focus - transperancy
lower admin burden
Risks:
control (authorization, quality)
implementation risks
data security
perceived risk of authority loss
new speed my offset workflow
24
Q

5 rights for purchasing

A 
time
quantity
quality
price
vendor
25
Q

Product life cycle

A

introduction
growth
maturity
decline

26
Q

Portfolio planning

A

Build
Hold
Harvest
Divest

27
Q

BCG matrix

A 
stars (build)
questions marks (build, harvest, divest)
dogs (divest, hold)
cash cows (hold, harvest)

Shoot the dog, build a star, milk the cow, ask questions.

  • too simple
  • high market share might not mean competitive strength
  • high growth might require large investments
  • differentiation or niche strategies not considered
  • ignores synergies across products
28
Q

GEBS (General Electric Business Screen)

A

market vs. business strength

29
Q

Shell directional policy matrix

A

Competitive capabilities vs prospects for the sector

Double or quit
Growth
Custodial
Try harder
Cash generator
Phased withdrawal
Divest
Leader
30
Q

Difficulties in portfolio planning

A

Innovation is ignored
Completeness of product range is important
Ignores other rivals which might grow market share
Unclear desired market share improvement
What mix of cow, ?, * are good
Questionable how cow, ?, * can be shifted

31
Q

Direct product profitability (DPP) definition

A

Involves the attribution of purchase price and the indirect costs to each product. Thus net profit can be identified. Indirect costs are attributed.

32
Q

Issues with DPP

A

Brand expenditure can be spread
DPP ignores customer needs
Cross- subsidization ignored.

33
Q

New products - Benefit and challenges of innovation

A

attracts early adopters
early adopters might have high switching costs
learning curve might bring cost advantage
1st mover might define industry standard
enables skimming
IP might bring revenue

Difficult gaining regulatory approval
Uncertain demand
High R&D costs
Threat of low cost imitators
cost of introduction
34
Q

New products - strategies

A

leader
follower

No tech change: remerchandising or New Market issue
Improved tech: Reformulation, Improved Prod, Market extension
New tech: Replacement, Product line extentsion, diversification

35
Q

R+D categories

A

Product research (Idea and strat generation, value engineering, life cycle enhancements, backwards compatibility)

Process research (Processes, Productivity, Planning, Quality mgmt)

36
Q

R+D challanges

A

Org: strategic and technical
Fin: not easily planned
Evaluation and control: lack obvioius payoff
Staff problems: highly qualified, hard supervision and renumeration expectation

37
Q

Drivers for innovation

A

Market pull: provide what market wants
Technology push: introduction of tech without initial market signal
Collaboration: between supplier and customer

38
Q

Benchmarking - Definition

A

Gathering of data from targets or comparators to asses performance. Aims to improve performance.

39
Q

Types of benchmarking

A

Internal
Competitive
Functional (comparing internal functions)
Process or activity

40
Q

Steps of benchmarking: 8

A 
Mgmt support
Determine areas and objectives
Understand process and KPI
Choose benchmark Org
Measure performance
Compare and Discuss
Improvement program
Monitor
41
Q

Benchmarking questions to ask

A

Why are these products or services provided at all?
Why in this way?
What are other best practices?
How should activity get reshaped?

42
Q

Levels of benchmarking

A

Resources (revenue, employees, capital, qualifications, age of machinery, patents)

Competences: sales calls per salesman, output per employee, materials wasted

Linked activities: market share, profitability, productivity

43
Q

Benefits and issues with benchmarking

A 
position audit
carried out by managers subject to change
focuses on improvements and targets
helps to innovate
improves performance
early performance warning

doing things right instead doing the right things
yesterday’s solution to tomorrow’s problem
catch up exercise
depends on accurate comparators data
not free and can divert mgmt attention
sharing information with other companies can be a burden or even a risk
might result in lower motivation

E3 CIMA (5 decks)

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