P3 Business Analysis

2 Section A: Strategic Position A1. The need for, and purpose of, strategic business analysis A2. Environmental issues affecting the strategic position of an organisation A3. Competitive forces affecting an organisation A4. Marketing and the value of goods and services A5. The internal resources, capabilities and competences of an organisation Designed to give you the knowledge and application of:

3  Fundamental nature and vocabulary strategy and strategic decisions.  How strategy may be formulated at different levels (corporate, business level, operational) of an organisation.  Johnson, Scholes and Whittington model for defining elements of strategic management - the strategic position, strategic choices and strategy into action.  Strategic management is affected by different organisational contexts.  Compare three different strategy lenses (Johnson, Scholes and Whittington) for viewing and understanding strategy and strategic management.  Scope of business analysis and its relationship to strategy and strategic management in the context of the relational diagram of this syllabus. A1: The need for, and purpose of strategic business analysis Learning Outcomes

4 Strategy, strategic decisions and its relationship to business analysis Where we are now Strategic decisions Competencies Resources Where we want to be in the future Strategy  direction and scope of an organisation over the long term  which achieves advantage in a changing environment  through its configuration of resources and competencies  with the aim of fulfilling stakeholder expectations. Continued …

5 Business Analysis Analysing strategic position Determining strategic choices Taking strategic action Business process change Information technology Project management Financial analysis People  impact of strategy on environment or vice versa  organisation’s strategic capability  expectations & influences of stakeholders  how organisations differentiate themselves from competitors &  achieve competitive advantage  adequate structuring of organisation  matching strategies to resources  managing change Continued …

6 Mission statement VisionGoal Objective Resources Vocabulary of strategy Capabilities Strategic decisions MechanicsCharacteristics Assessing scope of organisation’s focus Analysing companies’ strengths & weaknesses against background of above two factors Forecasting shifts & trends in the business environment Determining organisation’s long-term goals & direction Apply to the entire organisation Determining scope of organisational activity General / big picture decisions Continued …

7 Horizontal consistency Vertical consistency What are my goals? How do I achieve my goals? What are the steps to achieve my goals? Refer to Example (page 7)  bank’s board sets lending guidelines  Corporate strategy  bank’s executives identify potential clients  Business strategy  bank’s management targets and markets these companies Operational strategy Strategy at different levels of the organisation Operational strategy Business strategy Corporate strategy

8 Strategic management and organisational contexts “Organisational context” refers to: Organisational size Multinationals Small business Organisational type Manufacturing Services Public sector Not-for-profit Organisational purpose

9 Strategic lenses for viewing and understanding strategy  What is our 5 year plan?  How should we innovate to be ahead of the game?  How do we convert our ideas into actions in order to achieve our long term goals?  How can we use our past experiences to frame future strategies? Strategy as ideas Strategy as design Strategy as experience Important for managers to balance the three lenses appropriately

10 Recap  Fundamental nature and vocabulary strategy and strategic decisions.  How strategy may be formulated at different levels (corporate, business level, operational) of an organisation.  Johnson, Scholes and Whittington model for defining elements of strategic management - the strategic position, strategic choices and strategy into action.  Strategic management is affected by different organisational contexts.  Compare three different strategy lenses (Johnson, Scholes and Whittington) for viewing and understanding strategy and strategic management.  Scope of business analysis and its relationship to strategy and strategic management in the context of the relational diagram of this syllabus.