Chapter 1

Question 1

what is strategic planning

Answer 1

deciding objectives of the organisation, on resources needed to attain those objectives, on strategies to govern the acquisition

Question 2

what is management (or tactical) control

Answer 2

process by managers ensure that resources are obtained and used effectively and efficiently

Question 3

what is operational control

Answer 3

the process of ensuring that specific tasks are carried out effectively and efficiently

Question 4

3 potential conflicts between strategic and operational decisions

Answer 4

unrealistic / overambitious plans

poor communications

inadequate performance management

Question 5

what are performance management systems

Answer 5

the systems in an organisation by which the performance of that organisation is measured

Question 6

what is strategic management accounting

Answer 6

a form of management accounting in which emphasis is placed on info from external factors and non financial info

Question 7

advs for strategic management accounting

Answer 7

forward looking
focus on threats in external environment
mix of finance and non financial such as customer satisfaction

Question 8

hierarchy of performance measures

Answer 8

1) strategy - forward looking, external, non financial
2) tactics - medium term, linked to budgets
3) operations - day to day, internal, detail, transactional level

Question 9

what is internal benchmarking

Answer 9

compares one unit or function to similair within the organisation

Question 10

advs of internal benchmarking

Answer 10

easier than external benchmarking

Question 11

disadvs of internal benchmarking

Answer 11

not that relevant as units are probably not that similair

wont lead to innovation

not paying enough attention to competition

Question 12

advs of external benchmarking

Answer 12

could remove the rival competitive advantage

Question 13

disadvs of external benchmarking

Answer 13

hard to obtain the info

info will likely be historical

Question 14

advs of external benchmarking - industry non competitor such as schools

Answer 14

as they arent direct competition, more likely to give info

Question 15

disadvs of external benchmarking - industry non competitor

Answer 15

the difference in results need to be looked into, for schools it could be due to area and upbringing

Question 16

what is external functional benchmarking

Answer 16

compare functions to ‘best in class’, regardless of industry

Question 17

adv’s of external functional benchmarking

Answer 17

aim is to find new innovative ways to perform activities

they will be more open to sharing info

Question 18

disadv’s of external functional benchmarking

Answer 18

difference in industrys will make it hard to implement

Question 19

7 stages of benchmarking

Answer 19

set objectives and determine areas to benchmark

establish KPI’s

select organisations to compare

measure own and others performance

compare performances and identify gaps

design and implement and improvement plan

monitor improvement

Question 20

what is swot analysis

Answer 20

a critical assessment of the strengths, weaknesses, opportunity’s and threats

Question 21

what are the 5 key forces that determine the profitability of an industry

Answer 21

new entrants
suppliers ( bargaining power)
buyers ( bargaining power)
substitutes (not always obvious such as holiday over a new kitchen)
all lead to competition and rivalry

Question 22

potential issues with porters five forces model

Answer 22

its not always easy to identify which industry a company is in - they may operate in multiple industrys

Question 23

measures for new entrants

Answer 23

brand value
% of revenue from patented products
market share

Question 24

measures for suppliers

Answer 24

level of discounts offered to customers

cost of suppliers product relevant to overall cost

Question 25

measures for competition and rivalry

Answer 25

market growth

market share

Question 26

measures for buyers

Answer 26

no of buyers
size of buyers
% of sales to largest customers

Question 27

measures for substitutes

Answer 27

relative price / performance of subs

growth rate for substitute markets

Question 28

vertical axis from BCG matrix

Answer 28

market growth

Question 29

horizontal axis from BCG matrix

Answer 29

relative market share

Question 30

what is a star

Answer 30

high market share, high market growth

Question 31

what is a question mark

Answer 31

low market share, high market growth

Question 32

what is a cash cow

Answer 32

high market share, low market growth

Question 33

what is a dog

Answer 33

low market share, low market growth

Question 34

uses of BCG analysis

Answer 34

internal balance can be checked

assess trends

evaluate competitors

evaluate risk

Question 35

what was porters generic strategies

Answer 35

a firm needs to be the lowest cost producer or it must differentiate products from competition

Question 36

what does pest stand for

Answer 36

political environment
economic environment
social factors
technological factors

Question 37

what must you consider in respect of political environment

Answer 37

taxes affect consumer spending
CT policy on business
new regs / legislations - affect profit?

Question 38

what must you consider in respect of economic environment

Answer 38

economy growing or shrinking
inflation
interest rates
exchange rates

Question 39

what must you consider in respect of social factors

Answer 39

change in cultures, tastes and lifestyles/ whats popular

Question 40

what must you consider in respect of technological factors

Answer 40

type of products made or sold

communication with suppliers and customers

Question 41

whats the modern view of management accountant

Answer 41

management accountants spend more time now as consultants not making reports