Tools and Theories Flashcards
What would you use if you were discussing a macroenvironment?
PESTEL
What does PESTEL stand for?
Political Environmental Social Technological Economic Legal
What would you use if you were discussing a national/geographic advantage?
Porter’s Diamond
What is included in the Porter’s Diamond?
Strategy, Structure and Rivalry Demand Conditions Relates and Supporting Industries Factor conditions AND: Role of the government
What would you use if you were discussing the attractiveness of a market?
Porter’s 5 forces
What is included in Porter’s 5 forces?
Threat of substitutes Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Competitive rivalry
What would you use if you were discussing key capabilities or understanding the difference between two organisations?
Porter’s Value Chain
What is included in Porter’s Value Chain?
SUPPORT: Firm infrastructure HR Management Technology Development Procurement
PRIMARY: Service Marketing + Sales Outbound logistics Operations Inbound logistics
What would you use if you were discussing insourcing and outsourcing?
Value Network
What questions would you ask for the Value Network?
Where are cost and value created? Which activities are centrally important? Where are the profit pools? Make or buy? Who are the best to partner with? What are the best relationships to have?
What would you use if you were discussing the success of a company?
9Ms
What is included in the 9Ms
Money Machinery Materials Manpower Make up MIS (info) Management Methods Market
What would you use if you were discussing internal analysis?
SWOT
What is included in SWOT
Strengths
Weaknesses
Opportunities
Threats
What would you use if you were discussing marketing?
7Ps
What is included in the 7Ps
Product Price Promotion Place People (S) Processes (S) Physical evidence (S)
What would you use if you were discussing price v value?
Strategic Clock
What is included in the Strategic Clock?
Price based:
- No frills
- Low price
Differentiation:
- Hybrid
- Differentiation
- Focussed differentiation
Failure:
- Price based
- Differentiation
- Lock in
What would you use if you were discussing a product portfolio?
BCG Matrix
What is included in the BCG matrix?
High growth, high market share> star
High growth, low market share > Question mark
Low growth, high market share > Cow
Low growth, low market share > dog
What would you use if you were discussing existing or new products/markets?
Ansoff’s Matrix
What is included in Ansoff’s matrix?
Existing product, existing market > Market penetration
Existing product, new market > Market development
New product, existing market > Product development
New product, new market > diversification
What would you use if you were discussing a company’s culture?
Cultural Web
What is included in the cultural web?
- Symbols
- Power
- Stories
- Control systems
- Structure
- Rituals/Routine
THEN: Paradigm
For the cultural web, what are stories?
What people tell about the organisation
For the cultural web, what are symbols?
Objects, acts of people - visual reps
For the cultural web, what is power?
Person or group who hold power
For the cultural web, what is the organisational structure?
Power structure
For the cultural web, what are control systems?
Measurement and reward systems
For the cultural web, what are routines and rituals?
The way we do things
For the cultural web, what is the paradigm?
Set of assumptions and collective experience
When asked to report on two investments, what do you use?
Suitability
Acceptability
Feasibility
When asked to consider the key factors influencing finance, what could you say? (5)
Cash held Cost of borrowing Security Risk Equity finance and control
When asked about the major project variables, what would you say? (4)
Expenditure
Time
Quality
Issues
When explaining the implications for governance with an acquisition/ VC injection, what could you say? (10)
Leadership Timeframe Objectives Leadership Style Intro of NEDs Remuneration Relations with shareholders Risk Management and Internal Controls Aligned Risk Appetite More robust risk management
When asked for the weaknesses of current management accounts, what could you suggest? And 2 recommendations?
Product portfolio profits
Overhead breakdowns
Cost per person
Job category breakdowns
Variance reporting
More balanced measures
What are some KPIs for hotels?
- Occupancy rates
- Average daily rate
- Revenue per room
- Gross operating profit per square metre
- Customer satisfaction
- Carbon footprint
What are the components of integrated reporting?
Financial Manufacturing Human Social Intellectual Natural
What are the key benefits of data analytics?
Consumer behaviour tracking
Open communication channels
Predictive analytics
Analysis of behaviours
What are the main opportunities of big data analytics?
Unlock value Collect more accurate info Segmentation Decision making improvements Develop next generation
What are the TARA boxes?
Transfer > high risk, low prob
Avoid > high risk, high prob
Accept > low risk, low prob
Reduce > low risk, high prob
What does TARA analyse?
Risk v profitability
What would you use if you were discussing stakeholders?
Mendelow’s Matrix
What is included in Mendelow’s matrix?
Involve > high power, high interest
Inform > Low power, high interest
Satisfy > high power, low interest
Ignore > Low power, low interest
If asked to discuss ethical behaviour, what do you need to mention
Professional competence and due care Integrity Professional behaviour Confidentiality Objectivity
When retaining and winning customers, what are the 6 main risks?
Strategic - failure to fulfil demands Operational - use of service Key person - founding people, instability Competition - less visible Data - loss or corruption Reputation - bad publicity
When comparing two strategies, how would you lay out your answer?
Advantages and Disadvantages
What are the recommendations for controls for a leak of data?
Changing passwords Restricting permissions Regular reminders to reduce complacency Anti hacking software and anti virus Do not copy onto memory sticks Keep a log of visitors/staff Failed attempts to log on
What would you do if there has been a threat to reveal confidential information?
Alert the authorities
Do not pay sum demanded as unethical
Notify client (risk is larger if you do not)
See if the breach was from you or client
When asked to evaluate an investment appraisal, what do you look at for sales?
Breakdown of products/services
Justification of increase over time e.g. competitive market?
When asked to evaluate an investment appraisal, what do you look at for contribution?
Different services = different contribution
Detail about variable costs
When asked to evaluate an investment appraisal, what do you look at for other costs?
When does marketing begin?
Justification as to why it is unchanged
Breakdown
When asked to evaluate an investment appraisal, what do you look at for tax and working capital?
Current tax rate is a reasonable assumption if not expected to change
Investment would require working capital
When asked to evaluate an investment appraisal, what do you look at for investment?
Single immediate figure at beginning will not be realistic
Realisable value with justification (no cashflows after)
When asked to evaluate an investment appraisal, what do you look at for discount rate?
The WACC should be used if business and financial risk remain at the same levels.
Project specific WACC used
When asked to evaluate an investment appraisal, what do you look at for payback period?
Certainty with figures used Calculated correctly (no TV of money)
When asked to evaluate an investment appraisal, what do you look at for sensitivity analysis?
Amount by which figures need to change for the investment to make a loss
Treats individual figures as independent
Scenario analysis could be more valuable`
When asked about e-marketing and attracting new clients, what will you discuss? (3 types)
Reaching potential clients - search engine positioning
Interesting potential clients - social media, USP
Gaining potential clients - personalisation
When asked about e-marketing and retaining clients, what will you discuss?
Personalised communication Website - registration Newsgroups, blogs Extranets - loyalty Responding to client queries
What are the CEO’s responsibilities for a transformation process?
Lead
Promote approach
Convince board and staff
Clear and detailed presentation to other directors
How would a CEO transform the business (preparing)?
Preparing
- Explain what is driving transformation
- Adoption of approach
- Create motivation
- Introduction for culture and practicality
- Organisation structural changes/ job changes
- Changes in rewards
- Training staff
- Change to information systems
How would a CEO transform the business (implementing)?
Implementing
- Consultive process through meetings and rewards
- Significant involvement by staff
- Get used to working with different people
- Creating new routines
- Behaving in new ways and setting standards
- Reinforced by changing mission, objectives
How would a CEO transform the business (communication)?
Communication
- Clear and open
- Full explanations
- Releasing news early (promote confidence)
For a transformation, when explaining the benefits for the company, what would you say?
Generate more revenue
Close relationships, less appealing to change suppliers
Developing services, learn from customers
For a transformation, when explaining the benefits for the staff, what would you say?
Providing with training to develop knowledge
Developing capabilities
Rewards
For a transformation, when explaining how the work will change, what would you say?
Structural changes Different teams More communication Making clients centre Proactive
When asked to discuss the board composition and information flow for a transformation, what would you say? (3 new roles)
Need for an operations director
Need for a marketing director
Need for a HR director
When asked to discuss the board composition and information flow for a transformation, what would you say for NEDs?
Consider knowledge and experience in sector and fit with strategy
When asked to discuss the board composition and information flow for a transformation, what would you say for information flow? (5 things)
- Sufficient timely information
- Findings summarised to Board
- Obtain and discuss relationships with clients and feedback should be sought
- Board informed immediately if any issues
- KPIs
When you are asked for evaluating a potential acquisition what do you use?
SAF
When you make a case for setting up an internal audit function, what do you say?
Performing audit and other review of each store
Recommend improvements to systems
Monitor risks - complexity
What is the meaning of big data?
Extremely large data sets which may be analysed to reveal patterns, trends, and associations relating to human behaviour.
Characterised by 3Vs:–Volume–Variety–Velocity
Structured (transactional) data
Unstructured data
Nature means traditional methods of storing and processing data will not work
When evaluating the potential application of e-procurement, what would you say?
Manage stock reorder levels
Faster communication of low inventory levels
Fewer stock outs
Analyse sales trends to predict demand
Real time link with central warehouse
Use of electronic data interchange with suppliers
Easier facilitation of competitive on line bidding
Data security challenges
What is e-procurement?
e-Procurement is concerned with improving the performance of the following - sourcing items at the right price, delivered at the right time, to the right quality, in the right quantity and from the right source.
When comparing debt vs equity (VC), what would you say?
Debt - Fixed interest - Tax deductible - Gearing is low already Shares - Avoids risk of debt - VC would expect to be in mgmt - Conflict
Ratio calculations
When asked to discuss the advantages and disadvantages of staying on as Chairman after a new CEO has been appointed, what would you say?
- Experience and knowledge
- Good relationships with shareholders
- Better scrutiny of executive directors
- Lack of independence
- Resentment
- Confusion over role
When asked to discuss the qualities which a new chief executive should possess?
Ability to work under pressure Ability to admit when errors have been made Interpersonal skills Intellectual breadth Industry experience Transformational skills
When asked why a strategy to open new shops is good, what would you say?
Market penetration
Refurbishment - increase customer purchases
Investment in staff training
Closing shops - improved image
When asked why a strategy to have a website is good for new products/market, what would you say?
New products should be demanded Should not affect current range or image Wider range of customers (infrastructure?) Sales channel needs to be monitored Overseas customers
When asked why a strategy to have increase sales to retail partners is good for new products/market, what would you say?
Consolidate with current retail partners
Penetrate market
Diversify into luxury products?
What does performance excellence result in?
- Delivery of increasing value
- Improvement of operational effectiveness
- Organisational and personal learning
What headings do you use for the Baldridge model?
- Leadership
- Strategy
- Customers
- Measurement, analysis and knowledge management
- Workforce
- Operations
- Results
With the Baldridge model, what does leadership mean?
Senior leader’s responsibilities, successful now and in the future
Communicating and setting values
With the Baldridge model, what does strategy mean?
Develop strategic objectives and action plans, implement them, change them and measure progress
With the Baldridge model, what does customers mean?
How we engage customers for long term success and stresses customer engagement
With the Baldridge model, what does measurement, analysis and knowledge mean?
Effectively, measuring, analysing and improving performance and managing organisational knowledge to drive innovation, improvement and organisational competitiveness
With the Baldridge model, what does workforce mean?
Key workforce practices
With the Baldridge model, what does operations mean?
Product design, innovation and operational effectiveness and investment in e-commerce
With the Baldridge model, what does results mean?
All results necessary to sustain our organisation
What do factor conditions include in Porter’s Diamond?
Physical resources
Human resources
Knowledge
Infrastructure
What do demand conditions include in Porter’s Diamond?
Home market demand and home based customers
What do related and supporting industries include in Porter’s Diamond?
Influenced by other industries/organisations that supply it
What does Strategy, Structure and Rivalry include in Porter’s Diamond?
Created, organised, managed
What does Government support include in Porter’s Diamond?
Supportive of the industry?
What are the aims of integrated reporting in effective communication?
Improve the quality of information
Different communication strands and methodologies
What is the role of integrated reporting?
Benefit all stakeholders - how we create value
Communicating broader and more relevant information
Good for decision making
Broader than pure financial data
What are the benefits of integrated reporting?
Improved relationship
Greater insight into business model
Greater understanding of use and dependence on resources
Understanding drivers of performance and value
Outperform other companies
How does integrated reporting help build a relationship with stakeholders?
Overall explanations
Staff - employment stability and future prospects
Local communities - commitment to local economy
Transparency allows to tell a story preventing assumptions
Pivotal role in investment decision process
Economic analysis - understand trends and externalities
Industry analysis - factors driving competitiveness
Company strategy - Management quality and corporate strategy
What are the challenges posed by disruptive technologies?
More convenience Lack of competitive advantage Flexibility Wider choice of product offerings Personalisation Smartphone technology
When there is a risk of lack of focus on information strategies, what are the outcomes and recommendations?
Failure
Business opportunities missed
Wasted resources
Employ IT director
Align business strategy
When there is a risk of cyber and data security breaches, what are the outcomes and recommendations?
Loss of key data
Severe business interruption
Damage to reputation
Invest in latest cyber security
Implement and upgrade information systems
When there is a risk of business continuity threat, what are the outcomes and recommendations?
Unable to operate effectively
Loss of business
Cease to operate
Disaster recovery plan
Strategic level focus
