E3 - 6. Generating and Developing Strategic Options Flashcards
What 3 things does a resource audit do?
- Reveal strengths and weaknesses
- Understand core competencies
- Analyse how value is created
What is strategic fit?
Having the right resources to take advantage of opportunities that exist in the external environment
What are the 9 Ms of resources?
Manpower
Money
Machinery
Management
Markets
Materials
Methods and Processes
Management Information
Makeup and culture
What is foresight?
Rehearsing alternative futures for the organisation
What are the 5Cs of foresight?
- Communication
- Co-ordination
- Commitment
- Concentration on long term
- Consensus
What are the 3 main forecasting methods?
- Time series
- Correlation
- Regression Analysis
What is trend analysis?
Spotting trends or patterns in information and extrapolating it to the future
What is scenario planning?
Creating a range of plausible scenarios and the action plans required if they do occur, aimed at minimising surprises
What 5 things might scenario planning combine?
Known facts about the future, e.g.:
1. Demographics
2. Political
3. Industry
4. Reserve supplies
5. PEST trends
When is scenario planning most beneficial?
When the environment is complex and dynamic
What are the 6 key steps in scenario planning?
- Define scope of activity (timescale, region, product etc)
- Identify key stakeholders
- Indentify trends, uncertainties and causes of distruption
- Construct initial scenarios
- Check for plausibility and reduce to 2/3
- Use the scenarios to formulate a strategy
What are the 4 main advantages of scenario planning?
- Deeper understanding of environment
- Indicates what needs to be monitored
- Encourages environmental scanning
- Encourages creative thought
What are the 4 main disadvantages of scenario plannning?
- Expensive
- Distraction from main business
- Difficult to take action due to vested interest
- Many scenarios won’t come true
What is visioning?
Seeing an image of the future goal of the organisation and coming up with a plan to get to that future
What is morphological analysis?
Systematic investigation of all the components of large scale problems, products or processes
What is game theory?
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
What are the 3 ‘real options’?
- Option to make follow on investment
- Option to wait
- Option to abandon
What is stress testing?
Critically appraising existing strategy, challenging the status quo where there may be risk of complacency
