BST

Question 1

Internal analysis

Answer 1

CSF - Critical success factors (9 m’s - men, machines, money, materials etc…)

Porters value chain analysis
- Primary activities (Inbound/Outbound logistics, Operations, Sales and marketing, After Sale Services)
- secondary activities (HRM, technology, firm infrastructure, procurement)

Product life cycle
Development, Introduction, Growth, Maturity, Decline

BCG matrix
Problem child - attractive market but no market share
Star- Attractive market and high share (high threat of new entrants)
Cash cow - not attractive market but high share
Dog - Low share of unattractive market

Question 2

PESTEL (external analysis)

Answer 2

PESTEL
Political
- tax policy
- gove spending
-foreign trade regulations

Economic
- Economic growth
- Exchange/interest rates
- Inflation

Social
- Attitudes, taste and fashion
- Population demographics
- Income distribution

Technological
- New products
-Improved production
- Rate of obsolescence

Environmental
- Sustainability
- Pollutions and climate change
- Green finance issues

Legal
- Industry legislation
- Competition legislation
- Employment law

Question 3

Porters five forces (external analysis)

Answer 3

Threat of new entrants
- barriers to entry: brand loyalty, economies of scale, capital requirements, Access to distribution, Government subsidies.
- Market attractiveness: High growth, high attractiveness, few competitors, switching costs.

Threat of Substitutes
- Availability
- Relative pricing and performance
- Switching costs

Competitive rivalry
- Number of existing competitors
- Industry growth
- Switching costs
- Exit barriers
- High operating gearing

Power of suppliers
- Few large suppliers
- Product differentiation
- Switching costs
- Supplier has other buyers

Power of customers
- Few large customers
- Many small customers
- Product differentiation
- Switching costs
- Price transparency

Question 4

Stakeholder analysis

Answer 4

Mendelows matrix
Low interest, Low power - Minimal effort
High interest, Low power - Keep informed
Low interest, High power - Keep satisfied
High interest, High power - Key players

Mission statements
- Purpose
- Strategy
- Policy
- Values

Question 5

Strategic Options

Answer 5

Competitive positioning
- Cost leadership - lowest cost - supply, labour,
- Differentiation - Strong branding, product innovation
- Niche (Differentiation or Cost leadership)

Directions for growth (Ansoff matrix)
- Market penetration - price cuts
- Market development - new customers
- Product development
- Diversification - related (gain supplier or customer) or unrelated (new market)

Question 6

Strategies for products and markets

Answer 6

Market Segmentation
- Industrial segmentation (B2B sales)
- Customer segmentation (B2C sales)

Marketing Mix (4ps or 7ps if service)
- Product - brand, quality and USP
- Price - 4 Cs (cost, competitors, customers and corp objectives)
- Place - Direct or indirect
- Promotion - Advertising, promotion, public relations

(3 more if service)
- People - staff appearance, training and knowledge
- Process - Efficiency of service
- Physical evidence - tangible aspects of the service

Question 7

Strategies for change

Answer 7

Lewins force field

• Driving forces
  Changing markets, globalisation, increased competition, new tech
• Barriers to change
  Cultural - group inertia, power inertia, structural inertia
  Individual - habit, security, fear of unknown, effect on earnings,

Lewins iceberg
Unfreeze > Move > refreeze

Question 8

Evaluation of change

Answer 8

Financial performance - evaluation of numbers given

Non financial performance - Innovation and learning, customer perspective (scorecard) , internal business

Benchmarking
- internal (against last year or other branches)
- Competitive (against competitors or sectors)
- Activity (against best practice)
- Generic - against similar but not identical process

Question 9

Organisational Structure

Answer 9

Structures
- Entrepreneurial - built around owner or manager, decision maker
- Functional - outgrown entrepreneurial structure, smaller comp with few products
- Divisional - structured by product lines/brands - profit centers with GMs
- Matrix - combines divisional and functional
- Flexible - Changes to circumstances but lack of control

Mintzberg structure
- Operating core
- middle line
- strategic apex
- technostructure
- support staff

Other factors:
- Tall or Flat
- Decentralisation
- Contingency structures

ROI and RI

ROI - Profit/Divisional capital employed
- Widely recognised

RI = profit - (capital employed * target returns)
- Less likely to lead to dysfunctional decisions

Transfer pricing
- Cost plus pricing (cost + percentage)
- Market price (less discount and no selling cost)
- 2part (Variable cost/unit + fee to cover fixed cost)
- Dual pricing (divisions charge different amount - utilise suspense account)

Question 10

Risk management

Answer 10

Breakeven (Total fixed cost/contribution per unit)

Question 11

Development and change

Answer 11

Organic growth
Adv - Can spread costs, more control, easier to finance
Disadv - slow, no acquired knowledge, risk of failure

Acquisition
Adv - Quicker than organic, acquire knowledge, cost savings, lower risk, reduce competition
Disadv - lack of strategic fit, lack of understanding business acquiring, Paying too much, failure to retain customer base

Joint ventures (contractual) and strategic alliances (sharing knowledge)
Adv - Access to local resource, shared risk, attractive to smaller/risk averse companies
Disadv - Shared profit, agreement making struggle, share trade secrets

Franchising and licensing
Adv - increase distribution without capital investment, rapid expansion, local expertise
Disadv - Share profit, could split off on their own, operating decision conflict

International expansion