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CGMA Strategic level case study > Core Activity A - Develop business strategy > Flashcards

Core Activity A - Develop business strategy Flashcards

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1
Q

What is the definition of strategy?

A

‘Strategy is the direction and scope of an organisation over the long term which achieves advantage for the organisation through its configuration of resources within challenging environments, to meet the needs of markets and fulfil stakeholder expectations’.

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2
Q

What are Druckers 5 fundamental questions ?

A

What is our mission?
Who is our customer?
What does our customer value?
What results do we seek?
What is our plan?

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3
Q

What does a vision statement answer?

A

Where do we want to be ?
Designed to inspire

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4
Q

What question does a mission statement answer?

A

What do we do? What’s our purpose?

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5
Q

For larger and more complex organisations, what levels should a strategy be broken down into?

A

Corporate - (The group)
Business - (Product / service level)
Functional - (Opperational)

Corporate level - sets strategic intent (Growth, stability, recovery) corporate lifecycle?

Business level - must align with corporate strategy but segmented to different markets and customer types

Functional level - operational strategy driven by implementation of business strategy. Determines how the business should operate ie value chain etc.

It should be inclusive and contain bottom up and top down flows

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6
Q

What are the types of corporate level strategy?

A

Growth - Organic / M&A

Stability - Mature/ consolidated

Recovery/ Retrenchment - restructuring

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7
Q

What might a growth strategy across the organisation departments look like?

A

Corporate growth strategy
Business level growth
Departmental level strategy
Finance - raising funds
Sales and marketing - building campaign
Integration of IT systems etc etc
HR - recruitment strategy

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8
Q

What’s the preferred model for overall company strategy ?

A

Strategic control

Autonomy overseen by centre to steer them back on track where required

(Berkshire)

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9
Q

A strategic plan can be accomplished by answering what following questions?

A

Where are we right now? Strategic analysis of ecosystem
Where would we like to go? Define objectives
How do we get there ? The Strategic plan

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10
Q

What steps are involved as part of the strategic management process?

A

Vision, mission & objectives (SMART)

  • Analysis (environmental SWOT internal) ie corporate appraisal
  • Formulation (option generation, Evaluation and choice)
  • lmplementation of strategy (balanced score card) CSF & KPI’s
  • Review and control
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11
Q

What are the common stages of strategic management?

A

Sense of direction and purpose
Strategic goals and plans
Implementing plans
Monitoring and evaluating

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12
Q

Describe the elements of the Boston consulting group Matrix (BCG Matrix)

A

STAR
QUESTION MARK
CASH COW
DOG

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13
Q

What is a corporate appraisal ?

A

SWOT analysis for the group

Environmental / external

Internal

Is there a gap? Can we close the gap?

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14
Q

The strategic evaluation should ….

A

Build on strengths
Address weaknesses
Grasp opportunities
Avoid or minimise threats

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15
Q

What are the four main elements of the strategic formulation process?

A

Analysis - SWOT
Formulation - Evaluate options
Implementation
Review and control

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16
Q

Describe alternative approaches to formal corporate strategy?

A

Incrementalism - small changes in the right direction

Emergent approach - tried and tested as you go along allowing the strategy to evolve or emerge. Constantly evolving

Freewheeling opportunism - no real plan but can adapt quickly to opportunities

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17
Q

What are the 2 complimentary approaches to strategic development?

A

Inside out view - internal capabilities and competencies
Drive change, development and innovations (9ms)

Outside in view - create customer value and a seamless experience
Market orientated approach using customer demand and preferences

SWOT analysis useful to consider both

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18
Q

What’s the key difference between ‘vision’ and
‘mision’

A

Time frame

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19
Q

How might objectives be set once the mission and visions ?

A

Financial
Grow market share

Customer
NPS
CSAT
CES

Operational
Efficiency gains

People
Retention rates
360 degree staff appraisals twice a year

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20
Q

How could PESTEL help to analyse a company ?

A

Link change drivers to key risk factors

Generate ideas for how to strategically position the company

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21
Q

How might the analyse part of the strategy process look?

A

SWOT analysis as the base

SW - Internal / corporate lifecycle analysis

OT - external using PESTAL / industry lifecycle

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22
Q

What’s the formula for churn rate ? Ie customer turnover rate

A

% of customers that left = Number of customers that left / total number of customers

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23
Q

Describe the customer value management cycle?

A
  1. Manage customer segmentation
  2. Measure customer margins
  3. Measure customer lifetime value
  4. Measure customer impact
  5. Manage customer profitability
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24
Q

How can the BCG matrix be used as a visual tool to determine portfolio weightings?

A

Circles implemented based on sales for product

or weighing of portfolio for company

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25
What’s the customer lifetime value (CLV) formula ?
CLV = (Profit x retention rate x discount rate) cont’d for each time period
26
What are the components of the customer portfolio management matrix ?
Demanders Champions Losers Acquaintances
27
What’s the formula for relative market share? (BCG)
% = 100 x product or brands market share / nearest competitors market share
28
What is the formula for market growth rate? (BCG)
Growth rate = Total sales current year / total sales previous year
29
What are key useful terms in lifecycle costing?
Cradle to grave Cradle to cradle Cradle to factory Cradle to user
30
Describe the competencies in internal capability analysis ?
Core / distinctive - create competitive advantage Threshold - minimum requirements and don’t create competitive advantage
31
What is a CSF?
A Critical success factor is an element of organisational activity which is central to its future success. CSFs may change over time, and may include items such as product quality, employee attitudes, manufacturing flexibility and brand awareness.
32
What are the 9 M’s in a resource audit ?
Make up - structure & culture Management Management information Manpower Markets Materials Methods Money Machinery
33
What key things should be identified during value chain analysis ?
Cost Drivers Value Drivers
34
What steps could be used in value chain analysis ?
- Identify sets of value activities - Asses activity costs internally - Asses the importance of activities - Identify where and how cost can be reduced
35
What style of value chain analysis would be better suited for a service company?
value shop model
36
Describe the 5 steps of the value shop model ?
Finding the problem Problem solving Choice of solution Solution implementation Control and feedback
37
Whats the main theory behind porters value chain / value system?
- Finding new or better ways to perform activities - Combining activities in new or better ways - Managing linkages in ones own value chain - Managing linkages externally in the value system
38
What are the six main areas of strategic decision making set out by Johnson, Scholes and Whittington ?
- Long term direction - Scope of activities - Determining competitive advantage - Adapting to changes in the environment - Exploiting unique resources or competences - Stakeholder values or expectations
39
Describe the combination of capability ?
Competence Capacity Culture (doing it in the right way)
40
Descrive asnoffs growth matrix ?
Product development Market development Market penetration Diversification
41
Describe visionary thinking?
Backwards from perfect (working backwards to achieve milestones & goals)
42
How can a company avoid fade ?
Incorporate second curve thinking
43
What’s better than if ain’t broke model ?
Don’t wait until it’s broken … moving on from success is much harder than moving on from failure Eg Klopp etc
44
How might a growth strategy develop?
SWOT & GAP analysis - use ansoff matrix to close gap.
45
What should senior management beware of ?
- Relying on experience thats out of date? - Selective perception and Information use - unchallenged assumptions and acceptance of the status quo - Strategic herding (flavour of the month) - Attachments and emotional ties
46
What characteristics would greatly assist strategy creation ?
- Long term view - Respect all evidence - Tolerance of other points of view - Openminded - Future focussed - Ability to see interconnected factors - Critical thinker
47
What types of decision maker style exist?
Decisive Flexible Hierarchic Integrative Systematic
48
Describe 2 key strategic choices for businesses ?
How do we compete? Where and how do we grow?
49
How might we assess if diversification is an effective growth strategy?
- Attractiveness test (is the industry attractive? - cost of entry test? - better off test?
50
What methods for growth exists?
Organic non organic joint venture
51
What model may be better suited to business units than the BCG matrix?
GE McKinsey matrix
52
What is the General electric McKinsey matrix particularly useful for?
- Maps strategic business units - Goes beyond existing portfolio - Assesses strategic options
53
How might we determine market or industry attractiveness?
- Long run growth rate - Market size - Industry competition and profits (porters 5 forces) - Product lifecycle - Changes in demand - Trend in prices - Availability of resources - Market segmentation
54
How might we determine Business unit strength?
Total market share Brand strength Profits / earnings Customer loyalty VROIO resources Strength of Value chain - Level of product differentiation. Production Flexibility
55
What are the stages in the process of a merger and acquisition ?
strategy principles target company Pre lim Valuation Valuation Letter of intent confidentiality Initial meeting Due diligence Definitive agreement recording Needs Rapid Integration
56
What are the four foreign growth and market strategies (business models)
International Multinational Global Transnational
57
Describe an International company ?
An international company is an importer or exporter and has no or limited investment outside of its home market.
58
Describe a Multinational company
A multinational (or multi-domestic) company has investments in other countries but does not have coordinated product offerings in each country. It is more focussed on adapting its products and services to each individual local market.
59
Describe a Global company?
A global company is invested and present in many countries. A global company markets its products using the same coordinated product brand in all markets and generally, has one corporate office that is responsible for global strategy. The emphasis is on gaining global economies of scale and efficiency.
60
Describe a transnational company ?
A transnational company is a more complex organisation that seeks to achieve potentially conflicting objectives (for example, global efficiency versus local responsiveness). It is invested in foreign operations and has a central corporate facility, but it gives decision-making, R&D, and marketing powers to each individual foreign market.
61
How could you analyse Growth strategies ?
Porters diamond theory of national advantage
62
What re the pillars of porters diamond ?
Firm strategy, structure & rivalry Demand conditions Factor conditions Related and supported industries
63
What is a comparative advantage ?
an economic theory that describes when a country, individual, or business can produce a good or service at a lower cost than others Ie high in labour market high in land /resources farming
64
Whats an example of factor conditions? (porter diamond)
Land Labour Capital
65
Whats an example of Advanced factor conditions?
Education Infrastructure Technology
66
Why tools can be used to predict future probabilities?
Monte Carlo style simulations
67
What types of statistical analysis exist and useful for forecasting?
Time series Correlation Regression Econometric
68
What’s the moto for game theory?
Think forwards and reason backwards
69
How can real options aid strategy ?
Positive NPV Strategy can be evaluated Room for development Allows for discretion
70
What are the key points in decision tree analysis ?
Square = decision point Circle = potential outcome Draw from left to right / evaluate from right to left
71
How can decision tree analysis be useful ?
Present complex data into a diagram of decision making
72
What are the 5 c’s that relate to foresight?
Communication Concentration Coordination Consensus Commitment
73
How can scenario planning be effective beyond the results of the exercise ?
Encourage collaborative thinking and learning / decision process in different environments
74
What are the steps involved in scenario planning ?
Define scope, issues and horizon Define key drivers Collect and analyse data Develop scenarios Apply scenarios Maintain and update
75
What is strategic optimisation with SFA
Suitability Feasibility Acceptability
76
What are blue ocean strategies
In a sea of your own league with no competition/ constantly looking foreword and innovating Solid growth and high margins
77
What’s a red ocean strategy ?
Constantly fighting with competitors ? Ie bloody ocean
78
What’s a red ocean strategy ?
Constantly fighting with competitors ? Ie bloody ocean
79
Describe the components of mendalows matrix ?
Stakeholder matrix Minimal effort Keep informed Keep satisfied Key players
80
What’s the pyramid of CSR ?
Philanthropy Ethical Legal Economic
81
What’s the format for documenting strategic plans ?
Vision, missions and objectives Strategic direction, goals & objectives Basis of competitive advantage Product and market portfolio Revenue and profit model Capabilities and resources Strategic risk management
82
What are the 8 steps for making strategy happen at business unit level ?
Involved the team and create a sense of urgency List actions and assign responsibilities Set a timeframe and deadlines Identify resources Establish how actions will be measured Establish a review process Ensure everyone is aware of the action plan Keep the plan alive
83
What’s the process for defining KPI’s ?
Determine mission, vision and objectives (what we want to achieve) Determine strategic objectives (How we’re going to do it) Determine critical success factors that link to objectives Measure the performance by determining balanced KPI’ that link to CSF
84
How can KPIs be better utilised ?
Split into leasing and lagging (building block model) Ie business drivers (leading) Actual results (lagging)
85
What tool can be used to implement vision and strategy ?
Balanced scorecard with strategic approach Objectives Measures Targets Initiatives
86
What are the scopes of change and the afire of change in the ‘Types of change model’ ?
Nature of change Incremental Big bang Scope of change Realignment Transformational
87
What are the key three C’s when managing change ?
Communication Consultation Counsel
88
What leadership styles exist in change management?
Coercion Education Collaboration Direction
89
Describe an integrated model useful for managing the change process ?
Scoping change Strategic alignment Change planning Transition Review
90
Describe an integrated model useful for managing the change process ?
Scoping change Strategic alignment Change planning Transition Review
91
Describe the 8 step change model
Create sense of urgency Create powerful coalition Set the vision for change Communicate the need for buy in Empower employees for broad based action Generate short term wins Consolidate gains Anchor new approaches in culture
92
Describe the cultural Web/ paradigm
Stories Rituals and routines Symbols Organisation structures Control systems Power structures
93
Describe McKinsey 7 s model
Hard elements Strategy Structure Systems Soft elements Shared value Skills Staff Style
94
Describe the SAFeR framework useful for choosing how to grow ?
Suitability Acceptability Feasibility Risk
95
Describe the key elements of strategy formulation - target setting
Goals Objectives CSF KPI’s
96
What are the types of big data analytics
Descriptive - what’s happened so far? Diagnostic - why did it happen? (Drivers) Predictive - what do we expect to happen? Prescriptive - what should we do ?
97
What are the types of big data analytics
Descriptive - what’s happened so far? Diagnostic - why did it happen? (Drivers) Predictive - what do we expect to happen? Prescriptive - what should we do ?
98
What are the 12 distrusting technologies as part of the AI Industrial Revolution?
X
99
Describe McKinseys two by two digital disruption strategy matrix ?
X degree of change Y pace of change Low risk moves Live in two worlds Build agility Take bold action
100
Describe McKinseys two by two digital disruption strategy matrix ?
X degree of change Y pace of change Low risk moves Live in two worlds Build agility Take bold action
101
How do the WEF four pillars fit into CGMA strategy model
Pillar 1 - vision Pillar 2 - business models (environmental analysis) Pillar 3 - enablers (internal analysis) Pillar 4 orchestration (implementation)
102
What’s the overriding purpose of the strategy development process ?
Use of information collected via external and internal analysis to generate strategic options or choices and evaluate new business models Define Create Deliver Capture
103
What are the 5 strategic options generated by the WEF?
Scenario based Epicentre-driven Unorthodox Customer-centric Mirrored
104
What are the key elements of an intelligent operating model ?
Human Liquid Enhanced Living Modular
105
What 4 successful digital operating models are described by the WEF?
Customer centric Process oriented Data powered Ecosystem
106
Give an example of a digital transformation programme governance structure?
Sponsor Programme board Business change manager Program office
107
Describe the change s curve ?
Awareness Understanding Acceptance Experimentation Adoption Embedded
108
Describe the change s curve ?
Awareness Understanding Acceptance Experimentation Adoption Embedded
109
What are the three elements of digital traction ?
Scale Active usage Engagement
110
What financial metrics are useful as well as digital traction?
CAC LTV LTV / CAC ration = 3 Payback CAC / MRR
111
What are porters three main strategies with reference to the Options generation phase of the strategy process
Cost leadership - to attract customers through price Differentiation - to provide competative advantage Focus - Not separate to the above. What market should the business focus on ?
112
What key framework can be used when developing strategy ?
SAF Suitability - does it align with mission and objectives, values etc Acceptability- align with stakeholders ? ROIC etc Feasibility- do we have resources.. financial and internal 9ms etc
113
What are the 5 stages of the strategy process and what framework wan be used for strategic decision making?
Mission / vission SWOT / Gap analysis Options generation Implementation Evaluate & review SAF Suitably acceptability feasibility
114
What are the 5 stages of the strategy process and what framework wan be used for strategic decision making?
Mission / vission SWOT / Gap analysis Options generation Implementation Evaluate & review SAF Suitably acceptability feasibility

CGMA Strategic level case study (6 decks)

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