E3 - 6. Generating and Developing Strategic Options

Question 1

What 3 things does a resource audit do?

Answer 1

1. Reveal strengths and weaknesses
2. Understand core competencies
3. Analyse how value is created

Question 2

What is strategic fit?

Answer 2

Having the right resources to take advantage of opportunities that exist in the external environment

Question 3

What are the 9 Ms of resources?

Answer 3

Manpower
Money
Machinery
Management
Markets
Materials
Methods and Processes
Management Information
Makeup and culture

Question 4

What is foresight?

Answer 4

Rehearsing alternative futures for the organisation

Question 5

What are the 5Cs of foresight?

Answer 5

1. Communication
2. Co-ordination
3. Commitment
4. Concentration on long term
5. Consensus

Question 6

What are the 3 main forecasting methods?

Answer 6

1. Time series
2. Correlation
3. Regression Analysis

Question 7

What is trend analysis?

Answer 7

Spotting trends or patterns in information and extrapolating it to the future

Question 8

What is scenario planning?

Answer 8

Creating a range of plausible scenarios and the action plans required if they do occur, aimed at minimising surprises

Question 9

What 5 things might scenario planning combine?

Answer 9

Known facts about the future, e.g.:
1. Demographics
2. Political
3. Industry
4. Reserve supplies
5. PEST trends

Question 10

When is scenario planning most beneficial?

Answer 10

When the environment is complex and dynamic

Question 11

What are the 6 key steps in scenario planning?

Answer 11

1. Define scope of activity (timescale, region, product etc)
2. Identify key stakeholders
3. Indentify trends, uncertainties and causes of distruption
4. Construct initial scenarios
5. Check for plausibility and reduce to 2/3
6. Use the scenarios to formulate a strategy

Question 12

What are the 4 main advantages of scenario planning?

Answer 12

1. Deeper understanding of environment
2. Indicates what needs to be monitored
3. Encourages environmental scanning
4. Encourages creative thought

Question 13

What are the 4 main disadvantages of scenario plannning?

Answer 13

1. Expensive
2. Distraction from main business
3. Difficult to take action due to vested interest
4. Many scenarios won’t come true

Question 14

What is visioning?

Answer 14

Seeing an image of the future goal of the organisation and coming up with a plan to get to that future

Question 15

What is morphological analysis?

Answer 15

Systematic investigation of all the components of large scale problems, products or processes

Question 16

What is game theory?

Answer 16

The theory that the actions that we take depend to an extent on the actions of our competitors and vice versa, and the understanding that some element of collaboration and/or deep understanding of competitors is needed

Question 17

What are the 3 ‘real options’?

Answer 17

1. Option to make follow on investment
2. Option to wait
3. Option to abandon

Question 18

What is stress testing?

Answer 18

Critically appraising existing strategy, challenging the status quo where there may be risk of complacency