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ACCA

Business Analysis
Paper P3
Practice & Revision Notes
ACP3RN09(D)



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INTRODUCTION
Analysis of past papers
Below provides an overview of the syllabus and details of when each element has have been examined. Further details
are included in the relevant chapter of the knowledge bank

Pilot
Dec
2007
June
2008
Dec
2008
June
2009

Strategic position
Mission, objectives and stakeholders Q1 (c) Q2 (a) Q1 (c)
Environmental analysis Q1 (a,b) Q1 (a) Q1 (a)
Marketing Q1 (b) Q3 (b)
Internal capabilities Q1 (b) Q4 Q1 (a) Q 1(a)
Ethics and CSR
Culture Q1 (b)

Strategic choice
Choice and the corporate parent Q2 (b)
Choice and the SBU Q1 (c) Q2 Q1 (b,c) Q1 (b,c)
Evaluation of options Q1 (c) Q2 Q1 (b,c) Q1 (b,c) Q1 (b)

Strategic action
Organisational configuration
Change management Q4
Approaches to strategy Q1 (c)

Business process change
Improving processes Q3 (a) Q3 (a) Q2 Q1 (c)
Software solutions Q2 (a) Q3 (b)

Information technology
E-business
Supply chain management Q4 (b) Q3 (b)
Marketing and CRM Q4 (c) Q3 (c) Q3

Quality issues and project management
Quality management Q3 Q4 (a)
Six sigma Q4 (b) Q4 (b)
Project management Q2 Q3

Financial analysis
Financial implications of business strategy Q1 (b) Q1 (b,c) Q3 (a)

People
Leadership Q2
Performance, reward, job design and staff development Q1 (c) Q 4 Q4 (a)




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27



Knowledge
bank



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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Recognise the fundamental nature
and vocabulary of strategy and
strategic decisions

Discuss how strategy may be
formulated at different levels
(corporate, business level,
operations) of an organisation

Explore the Johnson, Scholes and
Whittington model for defining
elements of strategic management
the strategic position, strategic
choices and strategy into action

Analyse how 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
How different lenses may contribute
to strategy development Dec 2008
Q1c)

Explore the scope of business
analysis and its relationship to
strategy and strategic management in
the context of the relational diagram
of this syllabus

What is Strategy ?



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Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Discriminate between the concepts of
intended and emergent strategies

Explain how organisations attempt to
put an intended strategy into place

Highlight how emergent strategies
appear from within an organization

Discuss how process redesign,
quality initiatives and e-business can
contribute to emergent strategies

Assess the implications of strategic
drift and the demand for multiple
processes of strategy development




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Business Strategy

Strategy
Process
People
Strategy definition
Design Ideas Experience
Intended
strategies
Emergent
strategies
Rational
Planning
Stages
Choice Action
Position
Elements of strategy Mission, objectives and
stakeholders (See Chapter 2)
Lenses
See diagram 1
"the direction and scope of an organisation over the long-term which achieves advantage in a
changing environment through its configuration of resources and competences with the aim of
fulfilling stakeholder expectations." Johnson, Scholes and Whittington (JSW)
JSW
How to get advantage?
Fit or change environment?
Who are stakeholders?
What direction?
How wide a scope? Innovation
Diversity of ideas
See diagram 2

See diagram 3
drift
political
caution
complacency



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1 What is P3 about?
Relational diagram of main capabilities
Business
process
change
(D)
Information
technology
(E)
Quality
issues
(F)
Project
management
(G)
Financial
analysis
(H)
Strategic position (A) Strategic action (C)
Strategic choices (B)
People (I)

2 Rational planning model

POSITION
AUDIT
REVIEW AND
CONTROL
MISSION &
OBJECTIVES
CORPORATE
APPRAISAL
STRATEGIC
OPTION
GENERATION
STRATEGIC
IMPLEMENTATION
ENVIRONMENTAL
ANALYSIS
STRATEGIC
EVALUATION
& CHOICE


POSITION CHOICE ACTION



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3 Crafting emergent strategies (Mintzberg)
3.1 An emergent strategy is one that arises out of patterns of behaviour not consciously imposed by senior
management.
3.2 Mintzberg identifies five elements of strategy.
(Plans)
Intended Realised
Strategy Strategy





Unrealised Emergent
Strategy Strategy


Patterns of Behaviour
4 Application guides
Stakeholders
Mission and stakeholders are likely to be relevant to many strategy based questions. Specific
frameworks may be used where a question asks you to:
(a) assess the mission or corporate objectives Campbell et al; or
(b) identify (ICE) and evaluate (Mendelow) the role of stakeholders
Note that if you are :
(a) discussing a corporate mission that it needs to meet the needs of key stakeholders; and that
(b) if you are discussing the organisations relationship with its stakeholders that the corporate
mission is an important way in which the organisation can communicate with them!

Deliberate
Strategy



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Strategy lenses
Strategy lenses can be used to identify and assess the approach taken to strategy by an organisation in
a question where, for example:
(a) past strategies have been unsuccessful; or
(b) the approach to strategy has been identified as not appropriate and you have to evaluate that
approach and perhaps suggest an alternative.

Rational model
The rational model is a very useful framework for two types of question:
(a) evaluating an organisations approach to strategy; or
(b) the importance of a particular aspect (eg quality, IT, marketing) to strategy since it outlines the
main stages in any decision even if a planning approach is not the approach adopted by the
organisation in the scenario.
You can use the stages of the rational planning model as headings in your answer.





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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Evaluate, through stakeholder
mapping, the relative influence of
stakeholders on organisational
purpose and strategy
Assessment of exit options open to
an owner and impact upon them of
those options Pilot Q1.
Q46 (c)
Advise on the implications of
corporate governance on
organisational purpose and strategy

Assess ethical influences on
organisational purpose and strategy

Explore the scope of corporate social
responsibility

Assess the impact of culture on
organisational purpose and strategy
How culture can affect strategy Dec
2008 Q1(b)

Prepare and evaluate a cultural web
of an organisation
Identifying cultural issues Dec 2008
Q1(b)

Advise on how organisations can
communicate their core values and
mission

Mission, Objectives, Stakeholders: The
Goal



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Business Strategy

Strategy
Process
People
The Goal
Corporate
Operational
Stakeholders
Mission, objectives and
stakeholders
Ethics Culture
See diagram 1
Vision
Mission (statement) Campbell
- Purpose
- Goals
- Standards
- Values
Ackoff
Exciting/applicable/positive
Objectives
SMART
Consistent
Internal
Connected
External
Mapping
Interest
power
External Internal
Codes &
Corporate
Governance
Corporate
behaviour
CSR
Provide benefit
to society rather
than specific
stakeholders
Elements
Values
Attitudes
Norms
Expectations
Handy
Power
Role
Task
Existential
Cultural Web
(J&S)

Symbols
Power
relationships
Structure
Control
Rituals and
routines
Myths
Miles & Snow
Prospectors
Analysers
Defenders
Reactors

Deal & Kennedy
Risk
Excellence



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1 Application guides
Stakeholders
Mission and stakeholders are likely to be relevant to many strategy based questions. Specific
frameworks may be used where a question asks you to:
(a) assess the mission or corporate objectives Campbell et al; or
(b) identify (ICE) and evaluate (Mendelow) the role of stakeholders
Note that if you are :
(a) discussing a corporate mission that it needs to meet the needs of key stakeholders; and that
(b) if you are discussing the organisations relationship with its stakeholders that the corporate
mission is an important way in which the organisation can communicate with them!

Cultural web
The cultural web is a key model for assessing culture because of its authors (Johnson and Scholes). It
could be useful in questions where:
(a) you are assessing the strengths and weaknesses of a business and have information about
control systems, structure etc; or
(b) the question requires you to consider implementation of change (see chapter 17); or
(c) you are assessing the acceptability and feasibility of a proposed strategy (see chapter 7) and
want to consider whether the current culture supports or hinders that strategy

Other culture models
Handy is useful in questions where you have information about the structure and culture of the
organisation.
Miles and Snow is useful where you may be assessing how the organisation formulates strategy and
could be used in conjunction with the following:
(a) Strategic formulation rational model, incrementalism, emergent strategies (chapter 1);
(b) Parental roles portfolio manager, synergy manager, developer (see chapter 6)




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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Assess the macro-environment of an
organisation using PESTEL
A macro-environmental analysis
using PESTEL. Pilot Q1 and Dec
2008 Q1a)
Q46 (a)
Highlight the key drivers of change
likely to affect the structure of a sector
or market

Explore, using Porter's Diamond, the
influence of national competitiveness
on the strategic position of an
organisation

Prepare scenarios reflecting different
assumptions about the future
environment of an organisation

Discuss the significance of industry,
sector and convergence

Evaluate the sources of competition
in an industry or sector using Porter's
five forces framework
A further environmental and financial
analysis. Pilot Q1
An analysis of the competitive
environment for a retail division
June 08 Q1
Q46 (b)

June 08 Q1 (a)

Environmental Analysis



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Environmental Analysis

PESTEL
Five forces
Diamond
Scenario planning
Macro-environment International Industry or Sector
Environment:
is a source of opportunities and threats
establishes planning assumptions
encourages open organisations
Political
Economic
Social
Technological
Environmental
Legal
Six steps:
1. Drivers
2. Framework
3. Mini scenarios
4. Larger scenarios
5. Write-up results
6. Identify issues
See diagram 1 (opposite)
Factor conditions
Related and supporting industries
Home demand conditions
Firm strategy, structure and rivalry



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1 Porters five forces model







Threat of
New
Entrants


7










Competition and
Rivalry
Suppliers Buyers
Bargaining Power
of Buyers
Bargaining Power
of Suppliers
Threat of Substitute
Products or Services
Potential
Entrants
Substitutes



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2 Application guides
PESTEL
To undertake a PESTEL analysis you need to:
(a) Identify relevant variables/factors under each heading (eg rising interest rates for economic or
growing population or increase in popularity of ecological products for social)
(b) Assess the impact those variables have on the business under consideration
(c) Draw an overall conclusion of the key opportunities and threats presented by the macro-
environment
PESTEL can be used in any question that asks for an environmental analysis or if you are discussing
risks, opportunities or threats. If the question provides more industry specific information you are more
likely to use Porters 5 forces (see below).

Porters diamond
Porters Diamond can be used in a variety of ways:
(a) at a national level, it can help governments to devise policy to encourage competitive
advantage in these industries (eg. tax incentive scheme, industrial policy) by creating clusters of
supporting industrial networks.
(b) at organisational level, it can be used to
(i) assess the current state of domestic industry,
(ii) assess the threats from an overseas competitor; or
(iii) assess the factors relating to a target country for selling our products, locating our
production or both.
Questions where a government is assessing international industrial policy or where a company is
assessing international competition or possible expansion may benefit from an assessment of the
elements of the diamond.

Porters 5 forces
Porters 5 Forces should be used:
(a) in a question where you have been asked to undertake an environmental analysis where the
forces are mentioned (eg competitors) OR a question about competitive position.
(b) to assess the options for increasing profitability or addressing specific threats or opportunities
within an industry; or
(c) assessing a target industry for diversification or expansion.




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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Explore the role of the value chain in
creating and sustaining competitive
advantage
Applying the value chain to a scenario
to then assess the supply chain of the
business Pilot Q4; Dec 07 Q3
Q33
Mock 3 Q3 (a)
Advise on the role and influence of
value networks

Assess different approaches to
benchmarking an organisation's
performance

Discriminate between strategic
capability, threshold resources,
threshold competences, unique
resources and core competences

Advise on the continuing need for
cost efficiency

Discuss the capabilities required to
sustain competitive advantage

Explain the impact of new product,
process and service developments
and innovation in supporting business
strategy

Discuss the contribution of
organisational knowledge to the
strategic capability of an organisation

Identify opportunities for managing
the strategic capability of an
organisation
How an acquisition can add to a
parents portfolio Dec 2008 Q1(b)

Position Audit



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Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Determine the strengths and
weaknesses of an organisation and
formulate an appropriate SWOT
analysis
Assessing the strengths and
weaknesses of a business Dec 07
Q1.
Evaluation of external environment of
a business Pilot Q1.
Mock 3 Q 1 (a)


Q46 (a,b)
Determine generic development
directions (employing an adapted
Ansoff matrix and a TOWS matrix)
available to an organisation





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Unique
Benchmarking
Resources
Minimum
Competitive
advantage
Threshold
Resource audit
Learning
organisation
Knowledge
management
9 Ms
Competences
Capabilities Value chain Knowledge
Innovation
Products
PLC
SWOT
TOWS
Robustness Rarity Non-substitutable Value
early adopters
lock in buyers
define industry standard
price skim
patents
Need to be dynamic to
meet market changes
To compete
Historical
Sector
Best-in-class
Manpower
Money
Machinery
Materials
Markets
Management
Methods
Make up
MIS
Activities and
processes
Tangible
Intangible
BCG
See diagram 3
Tacit
Explicit
Resource-based strategy
Sustainable competitive advantage
comes through possession of
distinctive capabilities.
See diagrams
1 and 2
Intuition valued
Positive conflict
Experimentation

Position Audit (Internal Strategic
Capability)



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FIRM INFRASTRUCTURE
PROCUREMENT
TECHNOLOGY DEVELOPMENT
HUMAN RESOURCES MANAGEMENT
INBOUND
LOGISTICS
OPERATIONS OUTBOUND
LOGISTICS
MARKETING
AND SALES
SERVICE
S
U
P
P
O
R
T

A
C
T
I
V
I
T
I
E
S


1 Value chain
1.1 Porter analysed the various activities of an organisation into a value chain. This is a model of value activities
and the relationships between them.














PRIMARY ACTIVITIES

2 Value system
2.1 A company's value chain is not bounded by a company's borders, its connected to what Porter describes as a
value system.









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3 Portfolio analysis (product life cycle & BCG)

+
-
Sales and
profits
Introduction Growth Maturity Decline Senility
Sales
Profit
Time


RELATIVE MARKET SHARE

HIGH LOW




HIGH





STARS QUESTION MARK MARKET GROWTH





CASH COW DOG LOW










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4 Application guides
Resource audit
The 9Ms is a simple list of resources that can be used:
(a) to structure an analysis of internal strengths and weaknesses (eg as part of a SWOT); or
(b) as a checklist of some of the implementation issues to consider when a question requires you to
make a recommendation.

Strategic capability
The terminology of strategic capability (threshold and unique competences and resources) is useful to
employ in a question where you are discussing internal strengths and weaknesses especially in
conjunction with the businesses ability to compete. Examples would be a question where you are
discussing:
(a) Porters five forces (chapter 2) and the ability to combat those forces; or
(b) Porters generic strategies and the ability of the business to adopt them as bases of competition
against other competitors (see chapter 7)

Value chain
The value chain is a key model. You can use it as a framework to answer a range of questions
including:
(a) assessment of internal capability strengths and weaknesses; or
(b) looking at how processes inter-relate (see chapter 9); or
(c) developing improvements to current processes and operations; or
(d) assessing the value adding activities by looking at customer need; or
(e) assessing the supply chain (upstream and/or downstream) by looking at our value system (see
below)

Product life cycle
In the exam you can use the product life cycle to assess:
(a) the range of products
(b) the extent to which products are reaching the end of their life cycle; and
(c) whether products earlier in their life cycle are available to replace them
The portfolio of products may therefore be either a source of strength or weakness (in combination with
innovation capabilities and the strength of knowledge management systems).




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BCG
In the exam you can use the BCG to assess:
(a) the range of SBUs under the control of a corporate parent
(b) the extent to which SBUs add value to the corporate parent
(c) those products or SBUs which may be harvested from the portfolio
The portfolio of SBUs may therefore be either a source of strength or weakness for the corporate
parent.




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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Explore the relationship between a
corporate parent and its business
units
How a newly acquired business unit
is performing Dec 2008 Q2(a)

Assess the opportunities and
potential problems of pursuing
different corporate strategies of
product/market diversification from a
national, international and global
perspective

Assess the opportunities and
potential problems of pursuing a
corporate strategy of international
diversity, international scale
operations and globalisation

Discuss a range of ways that the
corporate parent can create and
destroy organisational value

Explain three corporate rationales for
adding value portfolio managers,
synergy managers and parental
developers

Explain and assess a range of
portfolio models (the growth/share
(BCG) matrix, the public sector
New acquisition strategic fit with the
portfolio Dec 2008 Q2(b)

Strategic options generation



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portfolio matrix, market
attractiveness/SBU strength matrix,
directional policy matrix, Ashridge
Portfolio Display) that may assist
corporate parents manage their
business portfolios
Establish success criteria to assist in
the choice of a strategic direction and
method (strategic options)
Evaluating strategic options using
suitable criteria Pilot Q1; Pilot Q2;
Dec 07 Q1, June 08 Q1
Q46 (c)
Q25
Mock 3 Q1 (c)
June 08 Q1 (b and c)
Assess the suitability of different
strategic options to an organisation

Assess the feasibility of different
strategic options to an organisation

Establish the acceptability of strategic
options to an organisation through
analysing risk and return on
investment


Q46 (c)
Q25
Mock 3 Q1 (c)
June 08 Q1 (b and c)




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Strategic options SBUs
Generic options
Direction
Method
Suitable
Acceptable
Feasible
Combinations
Organic
Partnerships Chapter 8
Focus
Cost leadership
Differentiation
Broad
Narrow
Strategy clock (see diagram 1)
Ansoff's matrix (see diagram 2)
Meeting the strategic
needs of business
To key stakeholders in terms of
risk, return and CSR
Can the strategy be
achieved?
Finance
Timescale
HR
Technology
Logistics
Management skill
Production
Lynch's expansion matrix (see diagram 3)
Advantages
Share risk
Easier to walk away
Disadvantages
Relationship management
Share trade secrets
Advantages
Immediate
Buy in expertise
Disadvantages
Lack of experience
Culture clashes
Advantages
Control growth and
direction
Own culture
Disadvantages
Costly
Slow



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Strategic options
corporate parent
Related Unrelated
See diagram 1
Orientations Ohmae's
five reasons
Levels
Tools
Assessing SBUs
BCG
Assessing parent -
Ashridge
Diversity of products and
markets
Geographical diversity
Value creation Options
Synergy
Parental
Portfolio
Role of corporate parent is to
manage diversity to create value
Activities
Envisioning
Intervention
Resourcing
Approaches
Build
Hold
Harvest
Divest
Provide key competence
(eg brand)
Widely diversified
Low cost
Spread risk, but
Lack of focus
Horizontal
(competitors)
Vertical
(suppliers or
buyers)
Economies of scope
Corporate management
skills
See diagram 2
Co-ordinated
Shared services
Caused by:
Customer needs
Flexible labour/capital
Technology
Customers
Company
Competition
Currency
Country
Ethnocentric
Polycentric
Regiocentric
Geocentric
Internationalisation
(export/overseas
branch)
Insiderisation
(production and sales)
Globalisation (world as
a single market)



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1 The strategy clock
1.1 The concept of generic strategies were developed by Bowman when he described the strategic options within
the diagram below.

2 Ansoffs matrix

PRODUCT
(OR SERVICE) PRESENT NEW

MARKET



Withdrawal

PRESENT Consolidation Product Development

Market Penetration




NEW Market Development Diversification
Related
Unrelated







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3 Lynchs expansion matrix

COMPANY
INTERNAL EXTERNAL
NEW DEVELOPMENT DEVELOPMENT
LOCATION




HOME Internal development Merger/Acquisition
COUNTRY Alliance / Joint venture
Franchise/licence



Exporting
Overseas office
ABROAD Overseas manufacture Merger/Acquisition
Multinational operation Alliance / Joint venture
Global operation Franchise/licence













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4 BCG Matrix
Relative market share
HIGH LOW


STAR


QUESTION MARK


HIGH




MARKET




GROWTH

CASH COW DOG LOW

5 Ashridge model
Benefit (fit between SBU opportunities and parental skills etc)
Low High
High

Feel
(fit between SBU
CSFs and
parental skills etc)


Low

Ballast Heartland
businesses businesses






Alien
businesses


Value trap businesses



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6 Application guides
Choice
This chapter contains a systematic 5 stage approach to generating and evaluating strategic options.
Note that the models and approach in this chapter may be either:
(a) used systematically step by step; or
(b) individual models used for structure or idea generation; or
(c) not referred to directly at all!
For some questions the problems and opportunities are obvious as are the potential solutions. In this
case a well argued case will be sufficient with no reference to the contents of this chapter.
In other questions specific models may be asked for and therefore you should use those models.
You may also use these models to generate ideas that you would not otherwise have thought of.
However, dont think that it is essential to use all/any of this chapter to come up with a recommendation !

Porter generic strategies
Porters generic strategies be a cost leader or differentiate using either a narrow or broad focus - can
be used either:
(a) as a start point in assessing what strategy a business should adopt; or
(b) where the question specifically asks for the basis of competition or how the business should
compete.
Note also that Bowman took Porters 4 options and further analysed them to provide you with more
bases of competition to consider (although several are untenable (see diagram above).

Ansoffs matrix
Ansoffs matrix is a very important model that can be used in any question where you are asked to
discuss strategic options to:
(a) identify options for growth for general discussion; and
(b) providing a structure for your answer starting with current activities and then working through
options of new products, new customers etc.




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Lynchs expansion matrix
Lynchs expansion matrix is a useful list of options to consider when the question asks for:
(a) an identification of strategic options this is the next layer of that decision; or
(b) market entry or growth options eg where the business wants to increase its market share by
being a cost leader can do this by domestic or international operations using a range of
methods acquisition, joint venture etc .

SAF
The Suitable Acceptable Feasible (SAF) model is a good systematic approach to adopt to any question
that asks you to evaluate options. Alternative approaches include:
(a) advantages and disadvantages; or
(b) strengths and weaknesses.
Whichever structure you adopt you must remember to justify your points using evidence (from the
scenario and/or models as appropriate) and draw a conclusion based on your analysis.
Adopting a systematic approach means that recommendations will write themselves

Role of corporate parent
The role of the corporate parent may be an issue if you are looking at a question where:
(a) the company is large and diverse and has lots of separate businesses/divisions; and/or
(b) operates globally.
Other terms to look out for in a question are head office or holding company. The effectiveness of the
centre in creating value may be an issue in these types of scenarios.

BCG matrix



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The BCG model can be used in the exam to:
(a) assess the strengths and weaknesses of the portfolio of businesses in a group (note that this is
its primary purpose); or
(b) assess the balance of the portfolio of products for an SBU (but make sure that you acknowledge
for the examiner that Johnson, Scholes and Wittington do not advise this use of the model see
use of product life cycle for this analysis in chapter 4); or
(c) identify options for each SBU/product range that results (eg you may wish to invest in stars and
sell off dogs)





Ashridge model
The Ashridge model is useful in a question where you have a corporate parent and you have information
about:
(a) the opportunities and threats facing each business; and
(b) the particular skills and approach adopted by the parent (see parental roles above).
This raises the questions of the cost of the parent compared to the value it creates and the number of
SBUs it can effectively manage.


Globalisation
The issue of globalisation pervades many questions because even if the business is currently locally
based it may well face international competition. In questions:
(a) Yip (general factors) and Ohmae (factors specific to the business) may be used to discuss why
and how a business may want to be global;
(b) Orientations (ethnocentric etc) may be used to discuss the way in which a business competes
globally; and
(c) You should also consider some of the practicalities (eg language, culture, legal constraints etc)
depending on what the question has asked you to do.




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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Advise on how the organisation can
be structured to deliver a selected
strategy

Explore generic processes that take
place within the structure, with
particular emphasis on the planning
process

Discuss how internal relationships
can be organised to deliver a selected
strategy

Discuss how external relationships
(outsourcing, strategic alliances,
networks and the virtual organisation)
can be structured to deliver a
selected strategy

Explore (through Mintzberg's
organisational configurations) the
design of structure, processes and
relationships


Implementation: Structure



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Centralisation
co-ordination
cost
crisis decisions
Decentralisation
motivation
speed/local
succession
planning
Styles
planning style
financial control
control style
Alliances
Networks
Flexible firm
(see diagram 4)
Virtual organisation
Structure
The organisational configuration should be consistent
with the business strategy being followed.
Choosing a structure
Mintzberg organigrams
Processes Structure Relationships
Types of structure Control External Internal
Responsibilities
Communication lines
Values
Hierarchy
functional
divisional
holding company
Matrix
matrix (see diagram 1)
transnational (see diagram 2)
Objectives and constraints
Co-ordinated processes?
Role of parent?
Support culture?
Feasible?
Design principle
Specialist collaboration?
Links strengthened?
Flat?
Accountability lines clear?
Flexible?
Outputs
Inputs
Balanced scorecard
Direct
Indirect
Performance
targets
Four perspectives:
Financial
Customer
Internal business
Innovation and
learning
See diagram 3



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1 Matrix structure
1.1 Matrix type structures maintain coordination by co-working across functions. This usually means some form of
dual authority that can be complex and confusing and may make control more difficult.











2 Transnational structure
2.1 A global company may adopt a transnational structure. This is an attempt to think globally but act locally.

Global Global Global Corporate Group
product functional parent
managers managers




Country
manager


In-country Company Company






Economies Network Local
of scale synergies solutions
Area Manager A
Area Manager B
Area Manager C
Production
Dept
Sales
Dept
Finance
Dept
Distribution
Dept
R & D
Dept
Marketing
Dept





















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3 Organisational forms
3.1 Mintzberg described organisational forms using organigrams as follows.







Technostructure Support staff








4 Flexible firm
4.1 Flexible firm is a firm that makes greater use of non-permanent staff supporting a smaller core of multi-skilled
staff.


Professional
core




Self- Contingent
employed workforce
specialists (portfolio
workers)

Strategic apex
Middle
line
Operating core



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5 Application guides
Configuration
You may use these in the exam to:
(a) assess the strengths and weaknesses of these areas for the organisation in the scenario (note
this is the Make-up in the 9Ms); and/or
(b) develop specific strategies for improvement in all or some of these
(c) identify specific processes that could be improved (see chapter 9-11)

Mintzbergs organigrams
Mintzbergs organisational forms can be used in the exam to assess:
(a) which of these elements is dominating; and
(b) whether this is appropriate for the business.
You can therefore assess whether this is a strength or a weakness for the business and how this needs
to change to support a recommended strategy.

Balanced scorecard
The Balanced Scorecard is particularly appropriate to raise in a question where:
(a) you are discussing strategic implementation control is an important part of that; and/or
(b) a business has a number of intangibles (eg product development, training, process
improvement) that are crucial to success.


Control styles
Goold and Campbells control styles could be used in the exam in conjunction with parental roles (see
chapter 6) to assess the value added and approach taken by a corporate parent to the management and
control of the SBUs in the group.
The type of question where this would be useful is one where you are looking at a larger company or
group with diverse business units/subsidiaries (or where the strategy is to diversify). The approach
taken by the parent/holding company can be assessed by looking at:
(a) whether they are hands on or hands off using the parental roles; and/or
(b) whether they are central planners or set more high level strategic or financial goals for the SBU
(using Goold and Campbell).




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7


How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Advise on how an organisation can
reconsider the design of its processes
to deliver a selected strategy
Assessing upstream and downstream
supply chains Pilot Q4; Dec 07 Q3
Making recommendations for major
process areas of a provider of
motorist breakdown assistance
June 08 Q2.
Q33 (b,c)
Mock 3 Q3 (b,c)
June 08 Q2 (a)
Appraise business process change
initiatives previously adopted by
organisations

Establish an appropriate scope and
focus for business process change
using Harmon's process-strategy mix
Making recommendations for major
process areas of a provider of
motorist breakdown assistance
June 08 Q2.
June 08 Q2 (a)
Explore the commoditisation of
business processes

Advise on the implications of
business process outsourcing
Analysing the advantages of
outsourcing purchase and
maintenance of vehicles June 08
Q2
June 08 Q 2 (b)
Recommend a business process
redesign methodology for an
organisation

Evaluate the effectiveness of current
organisational processes

Describe a range of process redesign
patterns

Implementation: Changing business
processes



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Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Establish possible redesign options
for improving current processes of an
organisation

Assess the feasibility of possible
redesign options

Assess the relationship between
process redesign and strategy

Establish information system
requirements required by business
users

Assess the advantages and
disadvantages of using a generic
software solution to fulfil those
requirements

Establish a process for evaluating,
selecting and implementing a generic
software solution

Explore the relationship between
generic software solutions and
business process redesign




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Improving businesses processes
Process redesign Process improvement Process re-engineering
Process strategy matrix
Feasibility
Principles of BPR
Process redesign
methodology
Package selection
Five-step approach
Outsourcing
There are three types of process
change depending on level of change
Incremental change to existing processes
More extensive improvement of middle
size processes
Four patterns
Re-engineer
Simplify
Value added analysis
Gaps and disconnects
Social
Technical
Environmental
Financial
1. Establish requirements
2. Assess using criteria
3. Select
obtain tenders
first pass selection
second pass selection
implementation
long-term relationship
Harmon (See diagram 1)
1. Planning
2. Analysis
3. Redesign
4. Development
5. Transition
Fundamental rethink and radical redesign to
achieve dramatic improvement
Customer focused outcomes
Perform process to use output
Centralised control of resources
Autonomy
Linkages
One source data capture
1. Vision and objectives
2. Identify process
3. Understand and measure
current process
4. Identify change levers
5. Design and build prototype
Advantages
Expertise
Cost savings
Focus
Disadvantages
Knowledge of business
Costly pay for mark up
Lose internal capability



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1 Process strategy matrix
1.1 Harmon's process strategy matrix can be used to categorise an organisation's processes into four groups.
1.2 Outsource Complex and dynamic processes but not part of company's core competences: hard to automate,
so outsource, examples: advertising, staff counselling.
1.3 Improve Complex, dynamic, high value processes: careful process improvement, focusing on people, their
skills and their interactions, example: product development.
1.4 Automate / outsource Simple, commodity-like processes: automate with off-the-shelf systems or outsource,
example, payroll accounting.
1.5 Automate Simple but important: automate to improve efficiency using eg workflow, CRM, Six-Sigma,
example: sales order processing.

Low Strategic importance High


Outsource


Improve



High




Process
complexity




Low


Automate/Outsource


Automate




2 Application guides
Harmans matrix
Harmans matrix is a key model, useful in questions where:
(a) you have information about the key processes of a business; and/or
(b) you are told how important and complex they are to the business
The matrix then suggests the most likely route to improvement particularly where the technology is
available to automate and a market is available to support processes by outsourcing them.




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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Principles of e-business
Discuss the meaning and scope of
e-business.

Advise on the reasons for the
adoption of e-business and recognise
barriers to its adoption

Evaluate how e-business changes the
relationships between organisations
and their customers

Discuss and evaluate the main
business and marketplace models for
delivering e-business

Advise on the hardware and software
infrastructure required to support
e-business

Advise on how the organisation can
utilise information technology to help
it deliver a selected strategy
Assessing upstream and downstream
supply chains Pilot Q4; Dec 07 Q3.
Q33 (b,c)
Mock 3 Q3 (b,c)
E-business application: upstream supply chain management
Analyse the main elements of both
the push and pull models of the
supply chain

Discuss the relationship of the supply
chain to the value chain and the value
network

Implementation: I.T. and E-business



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Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Assess the potential application of
information technology to support and
restructure the supply chain
Assessing upstream and downstream
supply chains Pilot Q4; Dec 07 Q3.
Q33 (b,c)
Mock 3 Q3 (b,c)
Advise on how external relationships
with suppliers and distributors can be
structured to deliver a restructured
supply chain

Discuss the methods, benefits and
risks of e-procurement

Assess different options and models
for implementing e-procurement

E-business application: downstream supply chain management
Define the scope and media of
e-marketing

Highlight how the media of
e-marketing can be used when
developing an effective e-marketing
plan

Explore the characteristics of the
media of e-marketing using the '6I's of
Interactivity, Intelligence,
Individualisation, Integration, Industry
structure and Independence of
location
Explaining how e-marketing differs
from traditional marketing for a
provider of professional education
June 08 Q3
June 08 Q3 (a)
Evaluate the effect of the media of
e-marketing on the traditional
marketing mix of product, promotion,
price, place, people, processes and
physical evidence
Evaluating how to use e-marketing to
vary the marketing mix June 08 Q3
June 08 Q3 (b)
Assess the importance of online
branding in e-marketing and compare
it with traditional branding




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Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
E-business application: customer relationship management
Define the meaning and scope of
customer relationship management

Explore different methods of acquiring
customers through exploiting
electronic media

Evaluate different buyer behaviour
amongst online customers

Recommend techniques for retaining
customers using electronic media

Recommend how electronic media
may be used to increase the activity
and value of established, retained
customers
Assessing upstream and downstream
supply chains Pilot Q4; Dec 07 Q3.
Q33 (b,c)
Mock 3 Q3 (b,c)
Discuss the scope of a representative
software package solution designed
to support customer relationship
management





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E-Businesses and upstream
supply chain management
Varieties of E-commerce Impacts Upstream supply chain
management
Channel structures Advantages Benefits
Business models Barriers Risks
New business models
Available to all
Speed of communication
Networking
New intermediaries
Changes to ways of working
Cost reduction
Capability
Communication
Control
Customer service
Competitive advantage
Technology
Not relevant
Lack of skills/knowledge
Customers don't use
technology
B2B
B2C
C2B
C2C
B2G
C2G etc
Costs
Stock levels
Control
Supplier range
Manufacturing cycles
Vertical integration
Vertical disintegration
Virtual integration
e-procurement
Disintermediation
Reintermediation
Counter intermediation
Control
Organisational
Security
Supply chain
breakdown
Internet Protocols (IP)
Intranet OSI
Extranet Wifi
E-mail M-Commerce
Servers
Brokerage Affiliate
Advertising Community
Infomediary Subscription
Merchant Utility
Manufacturer



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E-Marketing and downstream
supply chain management
E-marketing strategy
6 I's characteristics of
e-marketing
Customer relationship
management (CRM)
Marketing mix
and e-marketing
Customer retention Buyer behaviour
and e-marketing
Increasing value Types of buyer behaviour
CRM software
See diagram 1
Independence of location
Industry structure
Integration
Interactivity
Individualisation
Intelligence
Product
Price
Place
Promotion
People
Process
Physical evidence Complex
Habitual
Variety seeking
Dissonant
Sales automation
Service management
Marketing automation
Management reporting
Database marketing
Data mining
Cookies
Personalisation
Extranets
Online communities
See diagram 2
Search engine registration Partnership
campaigns
Newsgroup and forums Viral marketing
Newsletters E-mail



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1 Developing an effective e-marketing plan

E-BUSINESS STRATEGY
Opportunities and threats
PESTEL factors Analysis of
demand, competitors,
resources and intermediaries
Use SMART mnemonic
Assessment of online
revenue contribution
Actions
Situational
analysis
Control
Tactics
Objectives
Strategy
Target market strategy
segmentation, positioning
7Ps product, price, place,
promotion, people, process
and physical evidence
Tasks
Resources
Partnering &
outsourcing
Marketing
research
Analysis of web-
server log files

2 Buyer behaviour
2.1 Research suggests a five-stage decision-making process for a purchase.

Need
recognition
Information
search
Purchase
evaluation
Evaluation of
alternatives
Purchase
decision




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3 Application guides
6Is and 7Ps
These two models can be used to assess e-marketing in a question:
(a) 6Is to identify the differences between traditional marketing and electronic marketing including
the related risks and opportunities; and
(b) 7Ps to identify the specific mix(es) and marketing approaches that can be achieved using
electronic means.

CRM
Customer relationship marketing may be relevant in a question where:
(a) the business is currently spending a lot on marketing with poor results; or
(b) the company has a small number of large customers; or
(c) customer loyalty is a critical success factor for the chosen strategy.
In the above circumstances it may be the case that it is cheaper and more effective to manage a longer
term relationship with customers (eg account management, data gathering) to gain loyalty and longer
term commitments.
Branding may also yield benefits in the above circumstances and therefore may be another aspect that
you want to discuss depending upon the scenario.

Channel structures
Reference to disintermediation and reintermediation is useful in a question where you are assessing
the risks and opportunities facing an intermediary (eg wholesaler, packager, importer etc).

E-business models
Different types of e-business models (eg merchant, brokerage etc) will be useful to generate ideas in a
question where you have to :
(a) assess the e-commerce currently adopted by a business; or
(b) develop an online presence where one doesnt currently exist you can then refer to a range
of options and assess their strengths and weaknesses for the business

IT and the value chain
The: benefits and opportunities for IT can be identified by looking at the activities in the value chain - eg
inventory control, procurement, marketing and operations (see chapter 4).



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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Discriminate between quality, quality
assurance, quality control and a
quality management system
Discussion of the current and
potential role of quality for a
manufacturing firm Dec 07 Q4
Mock 3 Q4 (a)
Assess the relationship of quality to
the strategy of an organisation

Appraise quality initiatives previously
adopted by organisations
Discussion of the current and
potential role of quality for a
manufacturing firm Dec 07 Q4
Mock 3 Q4 (a)
Advise on the structure and benefits
of a quality management system and
quality certification

Justify the need and assess the
characteristics of quality in computer
software and the implications of these
characteristics for testing, liability and
ownership
Discussing the characteristics and
importance of software quality to a
software company and their clients
Pilot Q3
Q27 (a)
Discuss the stages of systems
development through the medium of
the V lifecycle model
The V model as applied to project
software Dec 2008 Q3a)

Advise on how the V life cycle model
defines and partitions testing and
contributes to improved computer
software quality

Implementation: Quality



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Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Discuss how the process of computer
software development process might
be improved through the application
of the Capability Maturity Model
Integration (CMMI) process
Assessing implications of CMMI for a
software company Pilot Q3
Q27 (b)
Define the scope, principles and
objectives of Six Sigma
Examining how a six sigma approach
can address quality issues in a
manufacturing firm Dec 07 Q4
Mock 3 Q4 (b)
Discuss the team roles typically
required by Six Sigma

Outline the Six Sigma problem-
solving process (DMAIC)

Discuss the significance and
implications of measurement in the
Six Sigma problem-solving process

Explain the application of Six Sigma
within e-business, the value chain
and process redesign




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Quality
Quality control
Quality assurance
Quality management
system
IT systems
development
The V model
Capability maturity
model integration
Six Sigma
DMAIC methodology
Project
management
(Chapter 11)
Six concepts:
Critical to quality
Defect
Process capability
Variation
Stable operations
Design
Tools
Statistical control
Defect measurement
Process mapping
Root cause analysis
Organisation
Steering committee
Project team
Leaders
Master
Blackbelt
Greenbelt
Principles:
Process driven
Systems approach
Effective leadership
Factual decision-making
Wide participation
Continuous improvement
Mutual benefit
Costs:
Appraisal
Prevention
Internal failure
Five levels:
1. Initial capability
2 Respectable success
3. Standard processes
4. Consistent management
5. Process optimisation
Degree to which a set of inherent characteristics
fulfils requirements ('fit for purpose')
meets specification
design
service
administration
See diagram 1
SPICE:
1. Identity
2 Access
3. Improve
Define
Measure
Analyse
Improve
Control



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1 The V model
1.1 The 'V' model shows the key links between systems development, testing and quality assurance.
1.2 The model is in the shape of a 'V' to show the three horizontal links, representing quality control checks that take
place during systems development.

1.3 The left side of the 'V' shows the systems development phases in logical sequence.
2 Application guides
Costs of quality 12
The costs of quality can be used in most questions where quality is a potential issue to assess :
(a) where costs are being incurred; and
(b) how the approach to quality may be amended to improve overall performance (eg spending more
on prevention (quality assurance) to reduce the failure costs both internal and external or the
benefits of more rigorous appraisal (quality control)).






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V model
The V model may be useful in a question where:
(a) a business is introducing, or planning to introduce a new IT system; or
(b) an IT system implementation may have gone wrong use the model to assess where it may
have benefited from greater or more effective testing


CMMI
The CMMI model is useful in a question to assess the current approach to quality of the business and
what it needs to do to enhance the quality systems by:
(a) assessing their current information, processes and capabilities to judge where they rank on the
CMMI scale; and
(b) consider what improvements are required to move on to the higher levels (eg greater data
capture and use of that data to improve and learn to move from level 3 to level 4).


Six sigma
The Six Sigma approach can be used in questions about quality. It is designed for complex large scale
manufacture (eg Motorola mobile phones where it was developed) so will not apply to all
circumstances. However the principles may be referred to for example :
(a) concepts eg eradicating defects and being customer focused can be applied to most
businesses;
(b) DMAIC methodology can provide a systematic approach to quality improvement
(c) tools some of these may provide some ideas for improvement eg seeking the cause of the
errors not the just symptom; and
(d) organisation project based, long term improvement and giving staff responsibility for quality
may also be universally applicable ideas




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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Assess the contribution of the
lifecycle model and the cycle of
competition to understanding
competitive behaviour

Analyse the influence of strategic
groups and market segmentation

Determine the opportunities and
threats posed by the environment of
an organisation

Analyse customers and markets Analysis of a no frills positioning
strategy Dec 07 Q1
Electronic marketing and the
marketing mix for a professional
training provider June 08 Q3
Mock 3 Q1 (b)

June 08 Q3
Establish appropriate critical success
factors for products and services


Implementation: Marketing



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Competitors and
Customers
CPA
Product, Price,
Place, Promotion
+
People
Processes
Physical
Types of
segment
Buyer
behaviour
Inception
Growth
Shakeout
Decline
Competition dynamics Customers
MASS
Product Service
Attack
Hyper-competition
Defence
Kotler Industry life cycle Marketing Analysis
Segmentation
Marketing mix
Head on
Flank
Encircle
Bypass
Guerilla
Constant battle
Short-term
tactics
Position
Mobile
Flanking
Contraction
Pre-emptive
Consumers:
Convenience
goods
Shopping goods
Speciality goods
Industrial buyers
Price
Quality
Stability
Benefit
Demographic
Geographic
Measurable
Accessible
Substantial
Stable
Determine customer need
Target markets
Deliver satisfaction
Better than the competition
Undifferentiated
Differentiated
Concentrated
Positioning
Customer
specific costs
Target
Examples:
Attributes
Application
Price/quality
Maturity
Process
Identify need
Seek information
Evaluate options
Purchase
Evaluate purchase



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1 Application guides
Marketing strategy
In the exam the process of formulating a marketing strategy is useful in the following circumstances:
(a) where you are asked about how to determine a marketing approach; or
(b) when the question scenario asks you to look at how a company should enter a new market.


Marketing mix
The marketing mix is a key model that can be applied as a framework for most questions about
marketing or what may attract customers to our products.


Segmentation, positioning and targeting
Marketing potentially has many layers to it. You may want to discuss the following where the question
contains:
(a) information about different buyer groups buyer behaviour and/or segmentation
(b) different markets and currently a single marketing mix targeting
(c) information about competitor marketing mixes - positioning




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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Determine the distinguishing features
of projects and the constraints they
operate in

Discuss the relationship between
organisational strategy and project
management

Identify and plan to manage risks
Advise on the structures and
information that have to be in place to
successfully initiate a project

Assess the importance of developing
a project plan and discuss the work
required to produce this plan
Explaining role of PID and business
case in preventing problems with a
project Dec 07 Q2
Mock 3 Q2 (a)
Explain the relevance of projects to
process redesign, e-business systems
development and quality initiatives
The V model as applied to project
software Dec 2008 Q3(a)

Discuss the organisation and
implications of project-based team
structures

Establish the role and responsibilities
of the project manager and the
project sponsor


Reviewing and Controlling Strategy:
Project management



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Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Identify and describe typical problems
encountered by a project manager
when leading a project

Advise on how these typical problems
might be addressed and overcome
Analysing a project and the
contribution that project management
can have to improve process and
outcomes Dec 07 Q2
Mock 3 Q2 (b)
Monitor the status of a project and
identify project risks, issues, slippage
and changes and the likely
achievement of business benefits

Formulate responses for dealing with
project risks, issues, slippage and
changes
Ideas for addressing project slippage
Dec 2008 Q3(b) and Q3(c)

Establish mechanisms for
successfully concluding a project

Discuss the meaning and benefits of
an end project review, including
benefits realisation

Evaluate how project management
software may support the planning
and monitoring of a project





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Project management

Project manager
Tools Completion
Project team Stakeholders
See diagram 2
See diagram 3
Management Planning Control
Risks Project life cycle Milestones
A project is an undertaking with a beginning and
an end carried out to meet established goals
within cost, schedule and quality objectives
Defined
Specific resource
One off
Cuts across organisation
Steps
Identify, analyse and prioritise
Manage avoid, reduce,
transfer, absorb
Resolve
Monitor
If slippage:
Do nothing
add resource
Work smarter
re-plan
re-schedule
Incentive
Change specification
Budget
Resource histogram
Gantt chart
Critical path analysis
PERT
Software
Work breakdown structure
Completion report
client sign off!
Post completion audit
improve planning
improve resourcing
improve risk management
learn from mistakes
maintain good practice.
Balancing five factors:
Scope
Resource
Risk
Time
Quality
See diagram 1
Skills
Who?
Recruitment
Supervision



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1 Managing stakeholders
1.1 Stakeholders are people who have an interest in the end results of the project. They are not all necessarily
involved in the day-to-day work, but may attend project meetings.
1.2 Key stakeholders of a project (adapted from Gido and Clements)
Project sponsor
Project owner
Project customer
Project manager
Project team
Project brief,
allocation of
funds, terms
of reference
Project proposals
schedules, status
reports

2 Planning projects
2.1 Projects can be divided into several phases to provide better management and control. These phases make up
the project life cycle.


250










Initiation
Planning
Control
R
e
s
o
u
r
c
e
s

r
e
q
u
i
r
e
d

The phases of a project
Start Time
Finish
Execution
Completion



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3 Milestone slip charts
3.1 A progress report may include a milestone slip chart that compares planned and actual progress towards
project milestones.
3.2 Planned progress is shown on the X-axis and actual progress on the Y-axis. Where actual progress is slower
than planned progress slippage has occurred.
Milestone slip chart


4 Application guides
Project management
Many questions relating to effective project management may be approached by considering the
following :
(a) balancing the five elements of the project - quality, scope, resource, time and risk; and
(b) the different aspects of the project at each of the stages of the lifecycle.




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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Assess the contribution of four
different approaches to job design
(scientific management, job
enrichment, Japanese management
and re-engineering)

Explain the human resource
implications of knowledge work and
post-industrial job design

Discuss the tensions and potential
ethical issues related to job design

Advise on the relationship of job
design to quality initiative, process
redesign, project management and
the harnessing of e-business
opportunities

Discuss the emergence and scope of
human resource development,
succession planning and their
relationship to the strategy of the
organisation

Advise and suggest different methods
of establishing human resource
development

Advise on the contribution of
competency frameworks to human
resource development

Discuss the meaning and contribution
of workplace learning, the learning
organisation, organisation learning
and knowledge management

Reviewing and Controlling Strategy:
Managing People



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Explain the role of visionary
leadership and identify the key
leadership traits effective in the
successful formulation and
implementation of strategy and
change management

Explain how the effective recruitment,
management and motivation of
people is necessary for enabling
strategic and operational success

Discuss the judgemental and
developmental roles of assessment
and appraisal

Evaluate the concept of performance
management and explore its
relationship with strategic management

Advise on the relationship of
performance management to
performance measurement
(performance rating) and determine
the implications of performance
measurement to quality initiatives and
process redesign

Explore the meaning and scope of
reward management and reward
practices

Discuss and evaluate different
techniques of reward and their
relationship to job design, appraisal
and deployment of staff
Evaluating changes to a reward
system for a retail division June 08
Q1
June 08 Q1 (c)
Explore the principles and difficulty of
aligning reward practices with
strategy
Deficiencies of an existing reward
scheme Dec 2008 Q4(b) and Q4(c)

Advise on the relationship of reward
management to quality initiatives,
process redesign and the harnessing
of e-business opportunities





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Leadership, performance and
reward
Leadership HR management
Recruitment and selection Planning Performance management
(Chapter 16)
Psychological contract
Appraisal
Demand Supply
Trait
Theory X or Y
Dictatorial/autocratic/democratic/laissez-
faire
Tasks and/or people
Action centred
Psychological proximity
Maturity of followers
See diagram 1
Numbers
Skills
Turnover
Succession planning
Strategy
Technology
Job design
Growth targets
Mutual expectations of employer
and employee
Coercive
Calculative
Co-operative
Extrinsic or intrinsic
Five elements:
Strategy
Competitiveness
Techniques
Options
Objectives
Reward
Reward
Performance
Potential



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Succession
planning
Job Design and staff development
Job design
Knowledge work Staff development
Human capital
theory
Developmental
humanist approach
Scientific
management
Job enrichment Japanese style BPR
Dialogue and trust
Sharing information
Principle based
management
Problem solving
Peer evaluation
Investment in the capabilities
and commitment of staff
Combination of tasks and
responsibilities to form complete
jobs
Investment
Demonstrate returns
Empowerment
Life-long learning
Job content motivation
Standard methods
Piecework
Specialisation
Work groups
Combined tasks
Achievement
important
Less specialisation
Consensus
Life-time employment
Teamwork
Multi-skilled and flexible
Process teams
Market driven
Systematic:
identification
assessment
development
Part of HR planning



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1 Application guides
Job design
The issue of job design is inextricably linked to process change. Consideration of the effect of process
change on job design may be relevant in a question where you have to:
(a) evaluate or discuss the implementation of a process change (eg a new IT system); or
(b) evaluate job design if you change the design of jobs it may be an option to change the
process!
HR cycle
Devannas model of the HR cycle is a useful framework for any question in which you are considering
the current and future role of staff in an organisation and its strategy. It can be used to:
(a) evaluate an organisations approach to each stage of staff development and appraisal; and
(b) identify areas in which improvements could be made to the processes of performance
management, staff development and reward strategy to support the chosen strategy of the
business.
This aspect could be assessed in conjunction with elements of the balanced scorecard innovation
and learning and internal business perspective since improvement here depend upon staff attitudes,
motivation and skills.

1 Performance management
The HR cycle
1.1 Devanna's model shows the links between the topics in Chapters 15 and 16.












Selection Performance
Appraisal
Human resource
development
Rewards



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How have the syllabus learning outcomes been examined?
Syllabus Guide
detailed outcomes
How syllabus outcomes are
examined
Exam question reference in
P&R kit
Explore different types of strategic
change and their implications
An analysis of the nature, scope and
type of change proposed by a
pharmaceutical company June 08
Q4
June 08 Q4 (a)
Determine the organisational context
of change and use the cultural web to
diagnose this organisational context
An analysis of the internal contextual
features that could influence the
success of a change proposed by a
pharmaceutical company June 08
Q4
June 08 Q4 (b)
Establish potential blockages and
levers of change

Advise on the style of leadership
appropriate to manage strategic
change

Specify organisational roles required
to manage strategic change

Discuss levers than can be employed
to manage strategic change

Reviewing and Controlling Strategy:
Change Management



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Change management
Diagnosis of change
Force field
analysis
Types of
change
Context of
change
Styles of change
management
Levers
Roles
Change agent
Education and
consultation
Collaboration and
participation
Intervention
Direction
Coercion
Turnaround Cultural web
Scope
Time available
Areas to preserve
Opinion diversity
Resources
Workforce
readiness
Power
Persuasion
Staff need to be open
Involvement
Need time
Scope
Realignment
Transformation
Nature
Incremental
Big Bang
Four types:
Adaptation
Evolution
Reconstruction
Revolution
Driving forces
Restraining
forces
Seven elements:
Crisis stabilisation
Management
changes
Stakeholder
communication
Attention to target
markets
Concentrate effect
Finances restructured
Prioritisation
Challenge the
paradigm
Leaders
Middle managers
Outsiders
Change agent
Top-down
Need power
Extreme direction
Power and urgency
1. Symbols
2. Power
relationships
3. Structure
4. Control
5. Rituals and
routines
6. Myths



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1 Application guides
Force field analysis
In the exam you are likely to be faced with several situations of change, including:
(a) making recommendations that require a change to the organisation in the scenario; or
(b) a scenario that contains a change that you are asked to analyse and comment upon
Lewins Force Field model can be used to identify the drivers and resisters to change and therefore
consider what to do about that resistance or to evaluate the proposal in terms of the feasibility of
implementation.

Change issues
Pace, manner and scope and the 3Cs are two practical frameworks to use when discussing change:
(a) if the question asks about factors to consider you can use pace, manner and scope as a
framework; or
(b) if the question asks for how to manage the change effectively you could use the 3 Cs
(communicate, consult, council) as a start point
As with many of the questions in the P3 paper other approaches are valid and the above frameworks
may generate additional related ideas for you. The key question to ask yourself is am I answering the
question? If the answer is yes then you are probably on the right lines!

Contextual issues
The eight contextual factors identified by Balogen and Hope Hailey can be used in a question that asks
about:
(a) contextual issues within a change; or
(b) factors to consider when making a change




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Other aspects of change
The implementation of change is very practical however the above frameworks may be useful where the
question asks for:
(a) approaches to change styles of change management; or
(b) how to implement change and overcome resistance cultural web; or
(c) who should enable the change leadership and change agents.
However, all of the above may give you some ideas when attempting any change question in addition to
the application of a critical eye to the contents of the scenario.





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105



Appendices



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Appendix A: Relevant articles
Articles that provide further insight into the P3 syllabus are available on the ACCA website at:
http://www.accaglobal.com/students/study_exams/qualifications/acca_choose/acca/professional/ba/technical_articles/
The attached list of articles has been compiled to provide you with some structure during the home study phase of your
revision and includes the most recent, or more important, articles that we recommend you read as part of your study for
this exam. To assist you in prioritising your reading we have reproduced the most important articles in this section.

Article Author Date Read
Pass Notes Business Analysis the examiners own guidance for students
of this paper
Steve Skidmore September
2007

Strategic Planning important analysis of this key approach to strategy David Jennings February
2008

Business Process Change important for two key aspects of the syllabus:
BPR and Change
Adrian Thomas September
2008

Accounting and organisational cultures financial control culture and
excellence cultures
Graham Morgan November
2008

Business Analysis case study format changes highlighting the fact that
case studies may contact flow diagrams in the future
Steve Skidmore January
2009

21 years of textbook strategy examining the influence of key theorists Ralph Bedrock May 2007
The seven deadly sins of strategy implementation focusing on the latter
part of the rational planning process
Martin Corboy
and Diarmid
Corrbui
May 2007
The strategy planning process (Parts 1&2) Sean Purcell May 2007




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Appendix B: June 2009 Exam Questions and Solutions





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