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

Core Activity A - Develop business strategy Flashcards

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
Q

What’s the customer lifetime value (CLV) formula ?

A

CLV = (Profit x retention rate x discount rate) cont’d for each time period

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26
Q

What are the components of the customer portfolio management matrix ?

A

Demanders
Champions
Losers
Acquaintances

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27
Q

What’s the formula for relative market share? (BCG)

A

% = 100 x product or brands market share / nearest competitors market share

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28
Q

What is the formula for market growth rate? (BCG)

A

Growth rate = Total sales current year / total sales previous year

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29
Q

What are key useful terms in lifecycle costing?

A

Cradle to grave
Cradle to cradle

Cradle to factory
Cradle to user

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30
Q

Describe the competencies in internal capability analysis ?

A

Core / distinctive - create competitive advantage

Threshold - minimum requirements and don’t create competitive advantage

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31
Q

What is a CSF?

A

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.

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32
Q

What are the 9 M’s in a resource audit ?

A

Make up - structure & culture

Management

Management information

Manpower

Markets

Materials

Methods

Money

Machinery

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33
Q

What key things should be identified during value chain analysis ?

A

Cost Drivers

Value Drivers

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34
Q

What steps could be used in value chain analysis ?

A
  • Identify sets of value activities
  • Asses activity costs internally
  • Asses the importance of activities
  • Identify where and how cost can be reduced
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35
Q

What style of value chain analysis would be better suited for a service company?

A

value shop model

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36
Q

Describe the 5 steps of the value shop model ?

A

Finding the problem
Problem solving
Choice of solution
Solution implementation
Control and feedback

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37
Q

Whats the main theory behind porters value chain / value system?

A
  • 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
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38
Q

What are the six main areas of strategic decision making set out by Johnson, Scholes and Whittington ?

A
  • Long term direction
  • Scope of activities
  • Determining competitive advantage
  • Adapting to changes in the environment
  • Exploiting unique resources or competences
  • Stakeholder values or expectations
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39
Q

Describe the combination of capability ?

A

Competence
Capacity
Culture (doing it in the right way)

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40
Q

Descrive asnoffs growth matrix ?

A

Product development
Market development
Market penetration
Diversification

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41
Q

Describe visionary thinking?

A

Backwards from perfect (working backwards to achieve milestones & goals)

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42
Q

How can a company avoid fade ?

A

Incorporate second curve thinking

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43
Q

What’s better than if ain’t broke model ?

A

Don’t wait until it’s broken … moving on from success is much harder than moving on from failure

Eg Klopp etc

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44
Q

How might a growth strategy develop?

A

SWOT & GAP analysis - use ansoff matrix to close gap.

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45
Q

What should senior management beware of ?

A
  • 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
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46
Q

What characteristics would greatly assist strategy creation ?

A
  • Long term view
  • Respect all evidence
  • Tolerance of other points of view
  • Openminded
  • Future focussed
  • Ability to see interconnected factors
  • Critical thinker
47
Q

What types of decision maker style exist?

A

Decisive
Flexible
Hierarchic
Integrative
Systematic

48
Q

Describe 2 key strategic choices for businesses ?

A

How do we compete?
Where and how do we grow?

49
Q

How might we assess if diversification is an effective growth strategy?

A
  • Attractiveness test (is the industry attractive?
  • cost of entry test?
  • better off test?
50
Q

What methods for growth exists?

A

Organic
non organic
joint venture

51
Q

What model may be better suited to business units than the BCG matrix?

A

GE McKinsey matrix

52
Q

What is the General electric McKinsey matrix particularly useful for?

A
  • Maps strategic business units
  • Goes beyond existing portfolio
  • Assesses strategic options
53
Q

How might we determine market or industry attractiveness?

A
  • 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
Q

How might we determine Business unit strength?

A

Total market share
Brand strength
Profits / earnings
Customer loyalty
VROIO resources
Strength of Value chain
- Level of product differentiation.
Production Flexibility

55
Q

What are the stages in the process of a merger and acquisition ?

A

strategy
principles
target company
Pre lim Valuation
Valuation
Letter of intent
confidentiality
Initial meeting
Due diligence
Definitive agreement
recording Needs
Rapid Integration

56
Q

What are the four foreign growth and market strategies (business models)

A

International
Multinational
Global
Transnational

57
Q

Describe an International company ?

A

An international company is an importer or exporter and has no or limited investment outside of its home market.

58
Q

Describe a Multinational company

A

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
Q

Describe a Global company?

A

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
Q

Describe a transnational company ?

A

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
Q

How could you analyse Growth strategies ?

A

Porters diamond theory of national advantage

62
Q

What re the pillars of porters diamond ?

A

Firm strategy, structure & rivalry

Demand conditions

Factor conditions

Related and supported industries

63
Q

What is a comparative advantage ?

A

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
Q

Whats an example of factor conditions? (porter diamond)

A

Land
Labour
Capital

65
Q

Whats an example of Advanced factor conditions?

A

Education
Infrastructure
Technology

66
Q

Why tools can be used to predict future probabilities?

A

Monte Carlo style simulations

67
Q

What types of statistical analysis exist and useful for forecasting?

A

Time series
Correlation
Regression
Econometric

68
Q

What’s the moto for game theory?

A

Think forwards and reason backwards

69
Q

How can real options aid strategy ?

A

Positive NPV

Strategy can be evaluated
Room for development
Allows for discretion

70
Q

What are the key points in decision tree analysis ?

A

Square = decision point

Circle = potential outcome

Draw from left to right / evaluate from right to left

71
Q

How can decision tree analysis be useful ?

A

Present complex data into a diagram of decision making

72
Q

What are the 5 c’s that relate to foresight?

A

Communication
Concentration
Coordination
Consensus
Commitment

73
Q

How can scenario planning be effective beyond the results of the exercise ?

A

Encourage collaborative thinking and learning / decision process in different environments

74
Q

What are the steps involved in scenario planning ?

A

Define scope, issues and horizon

Define key drivers

Collect and analyse data

Develop scenarios

Apply scenarios

Maintain and update

75
Q

What is strategic optimisation with SFA

A

Suitability

Feasibility

Acceptability

76
Q

What are blue ocean strategies

A

In a sea of your own league with no competition/ constantly looking foreword and innovating

Solid growth and high margins

77
Q

What’s a red ocean strategy ?

A

Constantly fighting with competitors ?
Ie bloody ocean

78
Q

What’s a red ocean strategy ?

A

Constantly fighting with competitors ?
Ie bloody ocean

79
Q

Describe the components of mendalows matrix ?

A

Stakeholder matrix

Minimal effort
Keep informed
Keep satisfied
Key players

80
Q

What’s the pyramid of CSR ?

A

Philanthropy
Ethical
Legal
Economic

81
Q

What’s the format for documenting strategic plans ?

A

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
Q

What are the 8 steps for making strategy happen at business unit level ?

A

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
Q

What’s the process for defining KPI’s ?

A

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
Q

How can KPIs be better utilised ?

A

Split into leasing and lagging (building block model)

Ie business drivers (leading)

Actual results (lagging)

85
Q

What tool can be used to implement vision and strategy ?

A

Balanced scorecard with strategic approach

Objectives
Measures
Targets
Initiatives

86
Q

What are the scopes of change and the afire of change in the ‘Types of change model’ ?

A

Nature of change
Incremental
Big bang

Scope of change
Realignment
Transformational

87
Q

What are the key three C’s when managing change ?

A

Communication

Consultation

Counsel

88
Q

What leadership styles exist in change management?

A

Coercion
Education
Collaboration
Direction

89
Q

Describe an integrated model useful for managing the change process ?

A

Scoping change
Strategic alignment
Change planning
Transition
Review

90
Q

Describe an integrated model useful for managing the change process ?

A

Scoping change
Strategic alignment
Change planning
Transition
Review

91
Q

Describe the 8 step change model

A

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
Q

Describe the cultural Web/ paradigm

A

Stories
Rituals and routines
Symbols
Organisation structures
Control systems
Power structures

93
Q

Describe McKinsey 7 s model

A

Hard elements
Strategy
Structure
Systems

Soft elements
Shared value
Skills
Staff
Style

94
Q

Describe the SAFeR framework useful for choosing how to grow ?

A

Suitability
Acceptability
Feasibility
Risk

95
Q

Describe the key elements of strategy formulation - target setting

A

Goals
Objectives
CSF
KPI’s

96
Q

What are the types of big data analytics

A

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
Q

What are the types of big data analytics

A

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
Q

What are the 12 distrusting technologies as part of the AI Industrial Revolution?

A

X

99
Q

Describe McKinseys two by two digital disruption strategy matrix ?

A

X degree of change
Y pace of change

Low risk moves
Live in two worlds
Build agility
Take bold action

100
Q

Describe McKinseys two by two digital disruption strategy matrix ?

A

X degree of change
Y pace of change

Low risk moves
Live in two worlds
Build agility
Take bold action

101
Q

How do the WEF four pillars fit into CGMA strategy model

A

Pillar 1 - vision
Pillar 2 - business models (environmental analysis)
Pillar 3 - enablers (internal analysis)
Pillar 4 orchestration (implementation)

102
Q

What’s the overriding purpose of the strategy development process ?

A

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
Q

What are the 5 strategic options generated by the WEF?

A

Scenario based
Epicentre-driven
Unorthodox
Customer-centric
Mirrored

104
Q

What are the key elements of an intelligent operating model ?

A

Human
Liquid
Enhanced
Living
Modular

105
Q

What 4 successful digital operating models are described by the WEF?

A

Customer centric
Process oriented
Data powered
Ecosystem

106
Q

Give an example of a digital transformation programme governance structure?

A

Sponsor
Programme board
Business change manager
Program office

107
Q

Describe the change s curve ?

A

Awareness
Understanding
Acceptance
Experimentation
Adoption
Embedded

108
Q

Describe the change s curve ?

A

Awareness
Understanding
Acceptance
Experimentation
Adoption
Embedded

109
Q

What are the three elements of digital traction ?

A

Scale
Active usage
Engagement

110
Q

What financial metrics are useful as well as digital traction?

A

CAC
LTV

LTV / CAC ration = 3

Payback CAC / MRR

111
Q

What are porters three main strategies with reference to the Options generation phase of the strategy process

A

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
Q

What key framework can be used when developing strategy ?

A

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
Q

What are the 5 stages of the strategy process and what framework wan be used for strategic decision making?

A

Mission / vission
SWOT / Gap analysis
Options generation
Implementation
Evaluate & review

SAF

Suitably acceptability feasibility

114
Q

What are the 5 stages of the strategy process and what framework wan be used for strategic decision making?

A

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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