External Analysis Porter's 5 forces<br />Pestle<br />Industry Life Cycle<b r />Porter's Diamond<br /><br /> Internal Analysis Value

chain<br />Boston Consulting Grid<br />product lif e cycle Emergent Strategies (Mintzberg) Intended<br />Deliberate<br />Unrealised<br />Em ergent<br />Realised 1) Intended<br />2) Deliberate 1) the result of a deliberate planning process<b r />2) Where the intended plans have been put into action 3) Unrealised<br />4) Emergent<br />5) Realised 3) Not all planned strtegies are implemented<br />4) Sometimes strategies are created by force of unforeseen cir cumstances<br />5)This results from a balance of forces of the other types of st rategies Different types of strategy that a business can take - Positioning (versus resou rce-based) Marketing (focus on consumer needs)<br />Competitive Positioning (better than rivals through analysis)<br />Stakeholder Management (Better relat ionships)<br />Resource management (preferential access to resources) Influences on planning horizons: (nature of)<br />n.o.o<br />c.s.<br />n.o.i.<br />n.o.b.e.<br />n.o.m Nature of ownership<br />capital structure<br />Nature o f industry<br />Nature of business environment<br />Nature of management Strategic management approach (5cs) ohmae: Customers competitors corporation (currency country) Different types of strategy that a business can take - Resource based view (vs P ositioning) Find environment to fit firm<br />fit/stretch/leverage Product positioning (definition) Technique which carefully targets variou s product attributes of the (Chosen) market segments Market targeting (split) - 3 types<br />Considers how markets can be split into different sectors and then each sector targeted with a specific product: Considers how markets can be split into different sectors and then each sector t argeted with a specific product:<br /><span style="font-weight:600;">Undifferent iated marketing</span>: One product one market. No attempt is made to segment th e market<br /><span style="font-weight:600;">Differentiated marketing</span>: Th e market is segmented with products being developed to appeal to the needs of bu yers in the different segments<br /><span style="font-weight:600;">Concentrated marketing</span>: Marketing is segmented with the prodcut being specificaly targ eted at a particular segment Mission (definition): 'The business's basic function in society', is expressed in terms of how it satisfies its stakeholders. mission elements:<br />PSPV <span style="font-weight:600;">Purpose</span> Wh y does the organisation exist and for whom (eg shareholders)?<br /><span style=" font-weight:600;">Strategy</span> Mission provides the operational logic for the organisation:<br /> What do we do?<br /> How do we do it?<br /><span style="fontweight:600;">Policies and standards of behaviour</span><br />Mission should infl uence what people actually do and how they behave:<br /><span style="font-weight :600;">Values </span>What the organisation believes to be important: that is, it s principles. Objectives should be SMART<br /> Specific<br /> Measurable<br /> Achievable <br /> Relevant<br /> Time-bound Marketing mix (four Ps) Product: quality of the product as perceived by the pote ntial customer. This involves an assessment of the product's suitability for its stated purpose (ie its features and benefits), its aesthetic factors, its durab ility, brand factors, packaging, associated services, etc.<br /> Price: prices to the customer, discount structures for the trade, promotion pricing, methods of purchase, alternatives to outright purchase.<br /> Promotion: advertisement of a product, its sales promotion, the company's public relations effort, salesmanshi p.<br /> Place: distribution channel decisions, website selling (e-tailing), loca tion of outlets, position of warehouses, inventory levels, delivery frequency, g eographic market definition, sales territory organisation. 7 Ps of service marketing (3 more Ps) People: the people employed by the servi ce deliverer are uniquely important given they are likely to have regular intera ctions with customers. Service businesses therefore need to have excellent recru

itment and selection policies, good training programmes (both in procedures and the service ethos), standard consistent operational procedures (eg airlines), th e flexibility to enable staff to give good service, and effective motivational p rogrammes.<br /> Processes: these often determine the structure of the 'service e ncounter'. There are some important<br />'moments of truth' that determine how e ffective a service is, such as enquiries and reservations before<br />the servic e is granted, registration procedures, timing of when the service is consumed (t he internet<br />allows the purchase of many services to be done 24/7, for insta nce), and what happens after the<br />service has been consumed.<br /> Physical e vidence: this refers to items that give physical substance such as logos, staff uniforms and<br />store layout/design it gives the customer who buys a service ' something to show for it'. Orientations of ? <span style="font-weight:600;"> Marketing orientation</sp an>: a marketing-oriented business is one which accepts the needs of potential<b r />customers as the basis for its operations. Its success is seen as being depe ndent on developing and<br />marketing products that satisfy those needs.<br /><s pan style="font-weight:600;"> Sales orientation</span>: Some businesses see thei r main purpose as being just to sell more of the product<br />or services which they already have available. They may make full use of selling, pricing, promoti on and<br />distribution skills, but there is no systematic attempt to identify customer needs, nor to create<br />products or services which will satisfy them. <br /> <span style="font-weight:600;">Production orientation</span>: The business is just preoccupied with making as many units as possible. <br />Customer needs are subordinated to the desire to increase output.<br /> <span style="font-weigh t:600;">Product orientation</span>: The company falls in love with its product, as is often seen with hi-tech<br />industries, and it can no longer see that the sophisticated and costly specification is way beyond<br />the needs of customer s. Price (4 Cs) Costs<br />Competitors<br />Customers<br />Corporate objectives Promotion (the communication mix - SAPP) Sales promotion (such as 'buy on e, get one free' offers)<br /> Advertising<br /> Public relations; and<br /> Person al selling. effectiveness of Human Resources Management (4 Cs) 1 Commitment.<br />2 Com petence. <br />3 Congruence. (common vision)<br />4 Cost-effectiveness. Mintzberg Ideology<br />Strategic Apex<br />Technostructure<br />Support S taff<br />Middle Line<br />Operating Core Operating core (Mintzberg) People directly involved in the process of obtai ning inputs, and converting them<br />into outputs, ie direct operational staff. Middle line (Mintzberg) Conveys the goals set by the strategic apex and controls the work of the<br />operating core in pursuit of those goals, ie middle and fi rst-line managers. Strategic apex (Minztberg) Ensures the organisation follows its mission. Ma nages the organisation's<br />relationship with the environment. Top managers. <br />Support staff Ancillary services such as PR, legal counsel, the cafete ria and security staff.<br />Support staff do not plan or standardise operations . They function independently<br />of the operating core. Technostructure (Minztberg) Analysts determine and standardise work processe s and techniques.<br />Planners determine and standardise outputs (eg goods must achieve a specified<br />level of quality).<br />Personnel analysts standardise skills (eg through training programmes). Ideology (Mintzberg) Values, beliefs and traditions, ie the business culture. Types of organisational structure Simple Structure<br />Machine Bureaucrac y<br />Professional Bureaucracy<br />Divisionalised<br />Adhocracy/Innovative Factors affecting the amount of decentralisation in a business<br />LS<br />SoO< br />EoAD<br />EoC<br />AoM<br />SoTA<br />GoL<br />EoLK Leadership style : if it is authoritative, the business will be more centralised<br /> Size of org anisation: as size increases, decentralisation tends to increase<br /> Extent of activity diversification: the more diversified, the more decentralised<br /> Effe ctiveness of communication: decentralisation will not work if information is not <br />communicated downwards<br /> Ability of management: the more able, the more

decentralisation<br /> Speed of technological advancement: lower managers are li kely to be more familiar with<br />changing technology, therefore decentralise<b r /> Geography of locations: if spread, decentralise<br /> Extent of local knowled ge needed: if required, decentralise 5Ps of strategy Strategy as plan: <br /> Strategy as ploy: <br /> Strategy as patt ern: <br /> Strategy as position:<br /> Strategy as perspective: ERM Internal Analysis, External Analysis, corporate appriasial, mission goal s and objectives, gap, strategic choice, strategy implementation, review and con trol Static environments<br /><br />The 'Four Ss' can be used to describe a static en vironment:<br /> <br /> Static environmental change is slow<br /> Single pr oduct/market<br /> Simple technology<br /> Safe Dynamic environments<br /><br />The 'four Ds' can be used to describe a dynamic environment: <br /> Dynamic the speed of environmental change appears to incre ase through time<br /> Diverse many businesses are now multiproduct and operate i n many markets; business is also<br />increasingly international<br /> Difficult because of the above factors analysis of the environment is not easy<br /> Danger ous because of the above factors ignoring the environment can have serious<br /> consequences for the business PESTEL Political factors<br /> Economic factors<br /> Social/demographic factors< br /> Technological factors<br /> Ecological factors<br /> Legal factors Economic factors (external)<br />G<br />Bc<br />Ir<br />I<br />U<br />Er <br /> Globalisation<br /> Business cycles<br /> Interest rates<br /> Inflation<br / > Unemployment<br /> Exchange rates Ecological factors (external)<br /> S<br /> P<br /> G ECOLOGICAL FACTORS<br /> Sustainability issues, eg energy, natural<br />resources<br /> Pollution<br /> Gre en issues Technological factors (external)<br /> Gi<br /> N d<br /> SoTT<br /> LR&amp;D c<br / > D TECHNOLOGICAL FACTORS<br /> Government investment and R&amp;D<br />policy <br /> New discoveries: products and<br />methods of production<br /> Speed of tec hnology transfer<br /> Levels of R&amp;D spending by<br />competitors<br /> Develo pments in other industries that<br />could transfer across Social Demographic factors (external)<br /> Id<br />- Sm<br />- Loe/h<br />- Sop< br />- L<br />- Ad<br />- Lc<br />- C<br />- Awl<br />- Gc SOCIAL/DEMOGRAPH IC FACTORS<br /> Income distribution<br /> Social mobility<br /> Levels of educatio n/health<br /> Size of population<br /> Location<br /> Age distribution<br /> Lifest yle changes<br /> Consumerism<br /> Attitudes to work and leisure<br /> Green consu mers Political Factors (external)<br /> Swp<br />- Tp<br />- R<br />- Gs<br /><br /> POLITICAL FACTORS<br /> Social welfare policy<br /> Taxation policy<br /> Regulatio ns<br /> Government stability Legal factors (external)<br /> Cl<br />- Epl<br />- El<br />- Cp<br />- H&amp;Sr LEGAL FACTORS<br /> Competition legislation<br /> Environmental protection laws<br /> Employment law<br /> Consumer protection<br /> Health and safety regulations Industry life cycle<br />4 stages Introduction newly-invented product or s ervice is made available for purchase<br /> Growth a period of rapid expansion of demand or activity as the industry finds a market<br /> Maturity a relatively st able period of time where there is little change in sales volumes year to year<b r />but competition between businesses intensifies<br /> Decline a falling-off in activity levels as businesses leave the industry and the industry ceases to exi st<br />or is absorbed into some other industry. Porter's 5 forces<br /> Thread of substitute products or services<br />Threat of New entrants<br />Bargaining power of suppliers<br />Bargaining power of buyers <br />Rivalry amongst existing competitors Types of competitor (four) Brand competitors - similar products<br /> Indust ry competitors similar products but are different in other ways<br /> Generic com petitors compete for the same disposable income with different products<br /> For m competitors offer distinctly different products that satisfy the same needs 9Ms (factors to be reviewed in a resource audit) Machinery <br />Make-up< br />Management<br />Management information<br />Markets<br />Materials<br />Men

and women<br />Methods<br />Money Porters Value Chain &quot;support activities&quot; include: administrative i nfrastructure management, human resource management, technology (R&amp;D), and p rocurement.<br />&quot;primary activities&quot; include: inbound logistics, oper ations (production), outbound logistics, marketing and sales (demand), and servi ces (maintenance)<br /><br /><br /> BCG<br />Assessing rate of market growth as high or low depends on the condition s in the market.<br /> Market share is assessed as a ratio: it is market share co mpared with the market share of the<br />largest competitor. Thus a relative mar ket share greater than 1 indicates that the product or SBU is<br />the market le ader.<br /> <br /> Stars - Strategy: build (forgo short-term earnings and pro fits to build market share).<br /> Cash Cows - Strategy: hold (maintain the marke t position) or harvest (take maximum earnings in<br />the short term at the expe nse of long-term development) if weak.<br /> Question marks. - Strategy: build o r harvest.<br /> Dogs- Strategy: divest (release resources for use elsewhere) or <br />hold. Porters Generic Competitive Strategies <span style="font-weight:600;">Cost lead ership:</span> Producing at the lowest cost in the industry as a whole (not nece ssarily being the<br />producer offering the lowest prices to the consumer, thou gh the cost leader can compete freely on price in<br />the marketing mix).<br /> <span style="font-weight:600;">Differentiation</span>: The provision of a produc t or service which the industry as a whole believes to be unique.<br /><span sty le="font-weight:600;">Focus </span>(or niche) involves a restriction of activiti es to only part of the market (a segment) through:<br /> Providing goods and/or s ervices at lower cost to that segment (cost-focus)<br /> Providing a differentiat ed product or service to that segment (differentiation-focus) Ansoff Matrix (Product Market Strategies) Market Penetration (present/pres ent)<br />Product Development (new/present)<br />Market Development (present/new )<br />Diversification (new/new)<br />- which can be unrelated or related<br />if related<br />horizontal or vertical integration<br />- if unrelated:<br /> - financial reasons<br /> - spread risk<br /> - other<br />< br />can also divest/demerger/withdraw<br /> Targeting (when marketing)<br />MASSD Measurable<br />Accessible<br />Stable<b r />Substantial<br />Defensible Product (Marketing mix)<br />QPBAPS Quality and reliability<br />Packacing<b r />Branding<br />Aesthetics<br />Product mix<br />Servicing/associated services BCG issues (from q1 mock1) Normally assumes constant rate of future growth< br />normally used for conglomerates<br />no risk included<br />focus on known m arkets and known products<br />difficulties in forecasting growth Lynch's Expansion method matrix Internal/External development vs Home Country/Ab road<br /><br />i.e. Home + Internal= internal domestic development<br />Home + External = joint venture, merger acquisition alliance franchise<br />abroad + ex ternal = same<br />abroad + internal = exporting, overseas office/manufacture/op eration Kay's sources (of core competencies) Internal Architecture (relationship with employees)<br />External Architecture (relationship with suppliers/customers)<b r />Network Architecture (collaboration between business) Risk management<br />TARA selection, implementation, monitoring and review of suitable risk treatments<br /><br />Transfer<br />Avoidance<br />Reduction<b r />Accept/Retention Executive vs Non-executive<br /> E<br />- day to day running<br />- speci alise in particular areas <br />- range of responsibilities and duties under CA< br /><br />NE<br />- not involved day to day. <br />- variety of skills and expe rience to apply - independent<br />- encouraged to be actively involved in:<br / > - recruitment of ED and their remuneratin<br /> - audit committe e<br /> - being a voice for shareholders<br /> Barriers to change Cultural Barriers<br />Personnel Barriers<br /> Management styles to overcome barriers to change Education<br />Communica tion<br />Participation<br />Change agents Gemini 4 Rs (for business transformation) Reframe<br />Restructure<br />Re

vitalise<br />Renewal Mendelow's Power interest matrix<br /> low/low - monitor (minimum effort)<br /> low/high - keep informed<br />high low - keep satisfied<br />high/high - engage closely and influence actively Porter's Diamond Firm strategy, structure, rivalry<br />Factor Conditions <br />Demand Conditions<br />Related and supporting industries Strategic Competitive Advantage This could be through: <br />resources (unique)< br />competencies (core)<br /><br />n.b. no SCA from 'threshold' resource/compet ence Types of divisionalisation Functional<br />Geographic<br />Product/brand<br />Customr/market segment Types of Risk = likelihood x impact<br />BOSHFC Business (which can be subdivide d into)<br />- Operational<br />- Strategic<br />- Hazard<br />Financial<br />Co mpliance<br /><br />nb. can also split into internal / external Mergers and acquisitions<br />Porter tests Cost of entry - aatractive indus tries tend to have high costs of entry<br />Better off - the acquisition must do something for s/h that they cannot do for themselves Evaluation criteria (of strategies and performance) Suitability<br />Feasibi lity<br />Acceptability Critical Success Factors (MIT approach) Industry structure<br />Competitive stra tegy<br />Environmental factors<br />Temporary factors<br />Functional manageria l position<br /><br />(not really sure) Balanced Scorecard Customer - what do existing and new customers value from us<br />Internal Business - what processes must we excel at to achieve our fina ncial and customer objectives<br />Innovation and learning - can we continue to improve and create future value<br />Financial - how do we create value from our shareholders Operations planning (4 vs)<br />Capacity planning (LSSM) Volume<br />vari ability<br />variety<br />visibility<br /><br />loading<br />sequencing<br />sch eduling<br />monitoring Purchasing mix Quantity<br />Quality<br />Price<br />Delivery Information quality<br />ACCURATE accurate<br />complete<br />cost-benefic ial<br />user-targeted<br />relevant<br />authoritative<br />timely<br />easy-to -use Business value vs technical quality matrix divest - (low/low)<br />renew (high/low)<br />maintain/enhance - (high/high)<br />reassess - (low/high) Firce field analysis (Lewin)<br /><br />3 step approach (Lewin)<br /><br />(chan ge) Driving vs resisting<br /><br />Unfreeze <br />move<br />refreeze Nature of change vs Management role matrix Tuning (Incremental/Pro-active)< br />Adaption (Incremental/Reactive)<br />Planned (Transformational/Pro-active)< br />Forced (Transformational/Reactive)