Business Strategy - 4MBS650

Exam Preparation / Revision Slides

4MBS650 Business Strategy Examination

Open book, based on a case : What’s Wrong With The Company Strategy? » can bring in ANY written/printed material» can NOT bring in PC, PDA, mobile phone» careful preparation => concise set of notes» NO SUPPLEMENTARY RESEARCH

Case available for collection from U/G office

What will be in the exam?

FOUR questions in 2¼ hours (each question worth 25 marks)

Questions may relate to anything covered in the module but you will need to draw definite conclusions / recommendations

It is STRONGLY recommended that you use the worksheets for the cases studied in the seminars as the templates for structuring your analysis of the case /examination preparation.

You should

Spend time fully analysing the case Bring a concise set of notes containing

your analysis into the exam

Key to Case Analysis

I keep six honest serving men

(They taught me all I knew)

Their names are What and Why and When;

And How and Where and Who.

(By Rudyard Kipling)

The best answers show mature judgement

Focus on a few key RELEVANT points and develop them IN DEPTH

Use theory as basis of precise analysis» But don’t regurgitate it without applying it

Consider trade-offs, risks etc JUSTIFY your views / decisions Introduce ideas not mentioned in the case

» Analysis as basis for independent thought Clear conclusions we might disagree with! Questions may require you to combine the results

of several analytical tools to form CONCLUSIONS

Key Elements Evaluating External Environment

» Driving Forces» KSF» Industry Attractiveness

Internal Analysis» Core Competencies» Value Chain

Competitive stance / Strategic approach» Generic Strategies» Sustainability and strategic issues» Diversification

Strategy Implementation» Culture and Leadership» Building Organisation

What is the purpose of a Business Strategy?

Business Strategy is concerned with improving the competitive position of a company in its business environment

NOW FUTURE

Strategy

Put simply

Profit = Revenue – Costs Increase profit by increasing revenue

» Have more attractive product offering than competitors

» Predicting / identifying customer needs» Satisfying these needs – new product, new

delivery mechanism, new delivery channel, responding to other concerns (e.g. environment etc)

» Entering new markets Increase profit by decreasing costs

» Improving efficiency and effectiveness

What makes a winning strategy?

Fit» With environment» Between strategy, resources and architecture

Distinctiveness» In competitive stance» In value chain (=> low cost and/or superior

products) Sustainability

» Enduring distinctiveness (reputation, know-how)» Means of sustaining fit and distinctiveness as

environment changes

Key Questions?

How will the industry / industries in which it operates change over the next few years?

What impact will this have on the attractiveness of the industries?

Will there be any growth? If so where? What are the opportunities and threats?

Key Questions Regarding theIndustry and Competitive

Environment

What are the industry’s dominant economic traits?

How strong are competitive forces?

What forces are driving change in the industry?

What market positions do rivals occupy? What moves will they make next?

What are the key factors for competitive success?

How attractive is the industry from a profit perspective?

IndustryWhat are the industry’s dominant economic traits?

How strong are competitive forces?

What forces are driving change in the industry?

Analyse Industry using

•PEST

•Porter’s 5 Forces

•Industry Life Cycle

Key Questions Regarding theIndustry and Competitive

Environment

What market positions do rivals occupy? What moves will they make next?

Analyse Market / Competitive Environment by using

•Porter’s Five Forces

•Competitor Intelligence

•Strategic Grids

Combine results to get

What are the key factors for competitive success?

How attractive is the industry from a profit perspective?

Questions

How can the co maintain / retain profit growth?

How can it keep its shareholders happy? How can the co. exploit opportunities and

limit the impact of threats? Internal Strengths and Weakness

» Current Strategic approach / Strategy (Does this need to change?)

» Other Considerations

1. How well is the company’spresent strategy working?

2. What are the company’s resourcestrengths and weaknesses and itsexternal opportunities and threats?- SWOT

3. Are the company’s prices andcosts competitive?

4. Is the company competitively strongeror weaker than key rivals? – Competitive Strengths Assessment

5. What strategic issues meriturgent managerial attention?

Company Situation Analysis:

The Key Questions

The Five Generic Competitive Strategies

A Company’s Menu of Strategy Options

Other Considerations

Expanding Markets

Fitting strategies to particular situations

Diversification

Corporate

Culture and

Leadership

Key Questions

What would you advice Co’s management to do?