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Business Analysis Oral Exam > C3 Strategy Analysis > Flashcards

C3 Strategy Analysis Flashcards

1
Q

What is Strategy?

Johnson, Scholes and Whittington (2008)

A

Strategy is the direction and scope of an organisation over the long term which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.

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2
Q

What are the three levels of Strategy?

A

Corporate Strategy - concerned with the overall purpose and scope of the business.
Business Unit Strategy - address choice of products, pricing, customer satisfaction, and competitive advantage.
Operational Strategy - through the effective organisation and development of resources, processes and people.

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3
Q

What are the drivers for strategy development and how is strategy formulated?

A

1) Through an individual,
2) Through the experiences and views of internal managers,
3) From people who do the work,
4) Adopting a formal, carefully planned, design process.

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4
Q

What is PESTLE analysis?

A

PESTLE is a strategic framework for understanding external influences on a business.

Political - What are the political factors that are likely to affect the business?
Economic - What are the economic factors that will affect the business?
Sociological - What cultural aspects likely to affect the business?
Technological - What technological changes that may affect the business?
Legal - What current and impending legislation that will affect the business?
Environmental- What are the environmental considerations that may affect the business?

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5
Q

What are the Political influences from the PESTLE?

A
  • Government policies
  • Government term and change
  • Trading policies
  • Funding, grants and initiatives
  • Lobbying and pressure groups
  • Wars, terrorism and conflicts
  • Elections and political trends
  • Internal political issues
  • Inter-country relationships
  • Local commissioning processes
  • Corruption
  • Bureaucracy
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6
Q

What are the Economic influences from the PESTLE?

A
  • Local economy
  • Taxation
  • Inflation
  • Interest
  • Economy trends
  • Seasonality issues
  • Industry growth
  • Import/export ratios
  • International trade
  • International exchange rates
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7
Q

What are the Socio-cultural factors from the PESTLE?

A
  • Demographics
  • Media views of the industry
  • Work ethic
  • Brand, company, technology image
  • Lifestyle trends
  • Cultural Taboos
  • Consumer attitudes and opinions
  • Consumer buying patterns
  • Ethical issues
  • Consumer role models
  • Major events and influences
  • Buying access and trends
  • Advertising and publicity
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8
Q

What are the Technological influences from the PESTLE?

A
  • Emerging technologies
  • Maturity of technology
  • Technology legislation
  • Research and Innovation
  • Information and communications
  • Competitor technology development
  • Intellectual property issues
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9
Q

What are the Legal influences from the PESTLE?

A
  • Current legislation
  • Future legislation
  • International legislation
  • Regulatory bodies and processes
  • Employment law
  • Consumer protection
  • Health and safety regulations
  • Money laundering regulations
  • Tax regulations
  • Competitive regulations
  • Industry-specific regulations
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10
Q

What are the Environmental influences from the PESTLE?

A
  • Environmental regulations
  • Ecological regulations
  • Reduction of carbon footprint
  • Sustainability
  • Impact of adverse weather
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11
Q

What is the Porter’s Five Forces model and what are they?

A

Porter’s Five Forces Analysis is an important tool for understanding the forces that shape competition within an industry. It is also useful for helping you to adjust your strategy to suit your competitive environment, and to improve your potential profit (growth).

Supplier Power / Buyer Power / Competitive Rivalry / The Threat of Substitution / The Threat of New Entry.

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12
Q

What is Supplier Power all about in Porters 5 Forces?

A

Supplier Power: the ability of suppliers to drive up the prices of your inputs.

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13
Q

What is Buyer Power all about in Porters 5 Forces?

A

Buyer Power: the strength of your customers to drive down your prices.

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14
Q

What is Competitive Rivalry all about in Porters 5 Forces?

A

Competitive Rivalry: the strength of competition in the industry.

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15
Q

What is Threat of Subtitution all about in Porters 5 Forces?

A

The Threat of Substitution: the extent to which different products and services can be used in place of your own.

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16
Q

What is Threat of New Entry all about in Porters 5 Forces?

A

The Threat of New Entry: the ease with which new competitors can enter the market if they see that you are making good profits (and then drive your prices down).

17
Q

Name three popular techniques used in internal environmental analysis?

A

The Resource Audit, portfolio analysis using the Boston Matrix, and MOST analysis.

18
Q

What is MOST analysis?

A

MOST analysis examines the current mission, objectives, strategy and tactics, and considers whether or not these are clearly defined and supported within the organisation.

Mission - A statement declaring what the business of the organisation is in and what it is intending to achieve.

Objectives - The specific goals against which the organisation’s achievements can be measured (SMART).

Strategy - Medium or long-term approach that is going to be taken by the organisation in order to achieve the objectives and mission.

Tactics - The detailed means by which the strategy will be executed.

19
Q

Explain the Resource Audit.

What is it and what are the tangible and intangible resours?

A

The Resource Audit helps us to identify core competences or highlights the lack of competences to undermine competitive moves.

Tangible;
Physical resources (building, plant and equipment),
Financial resources (stability, capital to invest),
Human resources (expertise, adaptability, commitment),

Intangible
Know-how (patents and trademarks),
Reputation (brand recognition).

20
Q

What is the Boston Consulting Groups box for portfolio analysis?

A

Looks at the Market Growth and Market Share for product portfolio analysis.

Star - They get the gold,
Cows - Are milked,
Dogs - Must be buried,
Wild Cat - Carefully examined (can become the other 3)

21
Q

What is SWOT analysis?

A

The SWOT (strengths, weaknesses, opportunities, threats) analysis is often used to pull together the results of an analysis of the external and internal environments.

22
Q

In executing strategy there are five contextual issues to be considered. What are they?

A

1) Time - how quickly does the new strategy need to be implemented?
2) Scope - how big is the change?
3) Capability - does the organisation have the required resources for the change?
4) Readiness - Is the organisation, whole, or part affected, ready to make the change?
5) Strategic Leadership - is there a strategic leader for the change?

23
Q

A leader should demonstrate key characteristics. Give examples of these key characteristics.

A

1) Challenges the status quo
2) Establishes and communicates a clear vision of the direction to be taken
3) Models the way / Walks the walk
4) Empowers people to deliver
5) Celebrates success with those who achieve it

24
Q

What are the seven components of McKinsey’s 7-S model? Hard vs Soft

A

Hard;
Strategy / Structure / Systems,

Soft;
Shared values / Skills / Staff / Style

The 7-S model can be used in a wide variety of situations where an alignment perspective is useful, for example, to help you:

Improve the performance of a company.
Examine the likely effects of future changes within a company.
Align departments and processes during a merger or acquisition.
Determine how best to implement a proposed strategy.

25
Q

What is the Balanced Business Scorecard (BBS)?

A

A balanced scorecard is a performance metric used in strategic management to identify and improve various internal functions of a business and their resulting external outcomes.

Financial - The financial perspective is important for all shareholders and other financial backers of an organization.

Internal Business Processes - what internal processes have actually added value within the organizations and what activities need to be carried out within these processes.

Customer -Each organization serves a specific need in the market. This is done with a target group in mind, namely its customers.

Learning and growth - An organization’s learning ability and innovation indicate whether an organization is capable of continuous improvement and/or growth in a dynamic environment.

26
Q

What is the BBS useful to help us develop?

A

CSFs and KPIs!

Critical success factors (CSFs) refer to specific activities, procedures or areas that a business or organization depends on for its continued survival.

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use key performance indicators at multiple levels to evaluate their success at reaching targets. SMART!

Business Analysis Oral Exam (15 decks)

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