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APM Summary > Strategic Planning & Control > Flashcards

Strategic Planning & Control Flashcards

1
Q

What is PM about?

A

Organisation can only meet objectives if they improve in some way. Pm is about how we can improve.

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2
Q

What are some ways we could improve?

A
  • By measuring different KPI’s which are more aligned with our objectives.
  • Improving our target setting through budgeting.
  • Collecting better information through diff MA techniques e.g EMA
  • New production techniques such as JIT, Kaizen.
  • Imploving quality of products/services provided.
  • Improving way information is presented to those who need it.
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3
Q

What is Strategy?

A

Direction and scope of organisaton over the long-term, which achieves advantage in a changing environment through its configuration of resources and competences with aim of fulfilling stakeholder expectations’:

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4
Q

How to set a strategy?

A
  1. Strategic Position (Analysis)
  2. Strategic Choices (Closing the Gap)
  3. Strategy into Action (Implementation)
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5
Q

What does stage 1 - Strategic Position (Analysis)

A
  • Identify key stakeholders and their expectations.
  • Develop long-term objectives to satisfy these stakeholder expectations.
  • Calculate financial and non-financial ratios to show position of organisation.
  • Identify key factors changing the environment outside the organization.
  • Use SWOT analysis to develop strategic position.
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6
Q

How do you close gap between position and expectation?

A
  • Consider possible exit from existing industries.
  • Consider diversification into new industries
  • Consider how to turnaround underperforming existing competitive advantages.
  • Consider entry into new markets
  • Consider development of new products.
  • Consider developing new competitive advantages.
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7
Q

Strategy into Action (Implementation)

A
  • Evaluate above options and choose strategy to be followed
  • Implement any necessary changes in the organisation.
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8
Q

What is a a mission?

A

Broad statement of overall purpose of the business and should reflect core values of the business and S/H expectations.

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9
Q

What makes a good mission statement?

A

Johnson & Scholes -
1. Why do we exist?
2. What are we providing?
3. For whom do we exist?

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10
Q

What is a Critical Success Factor?

A

Things that must go right if the objectives and goals are to be achieved.

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11
Q

How are CSF’s derived?

A

First the mission is transalted into:
* Strategic Objectives
* Tactical Objectives
* Operational Objectives

Then the critical processes are identified and a KPI attached to them.

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12
Q

How many kinds of CSF’s are there?

A

Monitoring: Keeping abreast of on-going operations
Building:- tracking progress of programmes for change initiated by exec.

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13
Q

How may a company asses its position in the market?

A
  1. SWOT (Internal &External)
  2. Benchmarking
  3. Pestle (External- Globe)
  4. Baldridge model/Impact of stakeholders
  5. Porter’s 5 Forces( External -Industry)
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14
Q

What things form an organisations current postion?

A
  • Strengths, weakness, Opportunites and Threats
  • Pestle(Global Environment)
  • Porters Five Forces (Industry) and
  • Benchmarks against competitors
  • It’s stakeholders
  • It’s Ethics & Culture Considerations
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15
Q

What is SWOT?

A

**Purpose: ** positional analysis. Find expectation gap (CSF’s) and therefore finds KPI’s.

Structure: Strength, weakness,Opportunities and Threats.

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16
Q

Benchmarking

A

There are a number of types of benchmarking:
* Internal/External
* Strategic
* Functional
* Operational

Can onl ybe done if company has adopted approrpriate Pefromance measures

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17
Q

What are the benefits of benchmarking?

A
  1. Highlighting which processes need improvement
  2. Focusing managers on the need for change
  3. Helping with efficiency and effectiveness.
  4. Helpin gto prevent failing to meet threshold competences
  5. Helping to identify that distinc competences are in advance of rivals.
    6.
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18
Q

Disadvantages of benchmarking?

A
  1. Implying that there is a single best way to do things which musst be copied by all.
  2. It is not appropriate if the industry is changing radically.
  3. It can mean the company is always behind its rivals.
  4. The wrong activities might be examined.
  5. How accurate are the measurements.
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19
Q

How may stakeholders aspirations be managed?

A

Using Medlow’s matrix.

High/High- capitulate in the ST.

HighPower/Low Excercise- Will have to be kept satisfied/

Low/Low- Can be neglected.
Low/High- Kept informed though little powewr.

20
Q

What influence may Stakeholders have on business?

A
  • Control of Strategic Resources (Strike)
  • Involvement in Strategies
  • Possession of Knowledge or Skills
  • Joining other groups with more power
21
Q

How may management resolve Stakeholder conflicts?

A
  • Prioritization
  • Negotiation
  • Excercising power
  • Sequential Attention
22
Q

What forms the organisational culture?

A
  1. Values
  2. Attitudes
  3. Norms
  4. Expectations
23
Q

What are the levels of culture?

A
  • Basic- which guides behaviour within the organisation?
  • Overt- expressed in the organisation and members?
  • Visible - Style of office and dress rules etc?
24
Q

What ethical codes may an organisation have ?

A
  • Employee- employer relationship
  • Customer care
  • Supplier relationship
    *
25
Q

How should these be implemented?

A
  • Senior management should support
  • Followers prosper
  • Offenders punished
  • Explained to all staff
  • Detail provided
  • Staff have access to detail
26
Q

What does Pestle stand for?

A

Political, Economic, Social, Technologica, Legal and Environmental.

27
Q

What should you ask yourself in the exam?

A

Whcih financial indicators are going to be worse or better due to the environment?

What can the organisation do about it? How will this affect rivals?

28
Q

Examples of Political

A
  • Taxation Policy
  • Govt Stability (Wars, Chaos, Corruption, Nationalisation)
  • Policies on Competion (Monopoly, Collusive Oligopoly/Cartel, Oligopoly, Corruption)
  • Important in providing infrastructure
29
Q

Examples of Economic

A
  • Interest Rates
  • Inflation Rate- driving up direct &operating costs.
  • Business Cycles
  • Disposable Income/GDP
  • Unemployment, energy availability, cost, trade barriers.
30
Q

Examples of Social

A
  • Income distribution, lifestyle changes, education level, etc
  • Population demographcs (Patterns of Demand, Tax Base, Productivity, etc)
    *
31
Q

Examples of Technological

A
  • Govt Spendingon R&D, industry focus.
  • Technological innovations which increase efficiency of labour
  • Or increase variety of goods and demand.
32
Q

Porters 5 forces are?

A
  • Competitors(new)
  • Competitors(existing)
  • Customers
  • Suppliers
  • Substitutes

*

33
Q

Impact of Competitors (new)

A

Drive down margins(companiees may spend more on marketing or lower prices to keep customers).

High Barriers to entry Mitigating threat:
* High fixed costs and capital requirements
* Switching costs
* Access to distribution channels

34
Q

Impact of Competitors (Existing)

A

Drive margins down due to competition.

Indicators of environment:
* Market Growth is slow
* If capacity can nly be increased in large amounts.
* If is difficult to exit the industry.

35
Q

Customers

A

Powerful customers can lobby for lower prices
Will be powerful if:
* Standardization within the industry
* Customer makes low profits
* Product quaality is not particularly important.

36
Q

What is a planning gap?

A

Based on the difference between projection of current activities and forecast of desired position. Measured in terms of demand or reprted in terms of net profit, roce etc.

37
Q

What models may aid in identifying measures to close the gap?

A

Ansoff’s matrix

38
Q

What are the ways in which profit can be increased?

A
  • Improved cost control (most of F5 is concerned with this).
  • Increased divisional performance (much of P5 is concerned with this)
  • Doing something different.
39
Q

What is Ansoff’s Grid?

A

Helps to plan & evaluate growth initiatives. In particular, the tool helps stakeholders conceptualize the level of risk associated with different growth strategies.

40
Q

What are the four possibilities in Ansoff’s matrix?

A

** Market Penetration** - existing products and existing markets

** Market development **- existing products and new markets

** Product development** - new products and an existing market

** Diversification** - new products to a new market.

Strategies are not mutually exclusive

41
Q

Special considerations for multinational companies

A

* Process Specialisation- place labour intensive operations in countries with low wage rates.

* Product Specialisation - consumers in different countries have different requirements and ‘tastes’.

* International Trade issues-
economics of a business may be particularly sensitive to exchange rate fluctuations. There could be import restrictions. There might be transportation problems.

*Political Sensitivties- e.g. Particular countrie smay have particular politcal risks.

* Administrative issues - transfer of profits may result in tax being payable twice. Ownership of foreign companies might be subject to special rules.

42
Q

What are the limitations of traditional Management Accounting?

A

Useful for control purpose as backwards looking and short term.

43
Q

What are the traits of Strategy Management Acccounting?

A
  • Externally focused
  • Forward looking
  • Aimed at achieving goals of entire organisation
  • Produced when neede
  • No standard form.
44
Q

What kind of information would Strategic MA provide?

A
  • Product profitability
  • Customer profitability
  • Pricing decisions
  • Brand values
  • S/H Wealth - What choices will increase it
  • Acquisition and disposal decisions
  • Decisions on entering new industries or markets
  • Decisions on launching new products
45
Q

What is a performance report?

A

It is used to identify:
* Is the department/division/company on course to meet its objectives?
* If not, then corrective action to be taken.

46
Q

What is the structure of a performance report?

A
  • Are the aims of the mission statement being met?
  • Will the high power stakeholders be kept happy?
  • Are we likely to keep our competitive advantage?
  • Is the company meeting its critical success factors?
47
Q

Signs of a poor report/signs of a good report

A

Good:
* Charts
* Benchmarks against budgets, prior periods or other companies and industries.

Bad:
* Too much information
* Irrelevant

APM Summary (12 decks)

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