OBJECTIVES On completion of this paper candidates should be able to: • identify and apply the principal concepts and ideas in the theory and practice of strategic management • understand
Trang 1To ensure that candidates can exercise
judgement and technique in strategic
business management to enable them to
contribute to the formulation of business
strategy, the development of products and
services and the maintenance of quality
throughout the organisation
OBJECTIVES
On completion of this paper candidates
should be able to:
• identify and apply the principal
concepts and ideas in the theory and
practice of strategic management
• understand the internal and external
factors affecting an organisation and
apply this knowledge to evaluate its
strategic position
• identify appropriate strategies based on
the evaluation of the organisation’s
objectives and position
• identify the appropriate methods of
implementing chosen strategies and
evaluate their impact on organisational
structures and operations
• understand the impact of globalisation
on strategic business planning
• integrate knowledge effectively and use
it creatively in applying concepts and
techniques
• analyse, interpret and apply data and
information and present reasoned
conclusions
and Development
• communicate analyses and conclusions effectively and with sensitivity for different purposes and contrasting audiences with due emphasis on social expectations
POSITION OF THE PAPER IN THE OVERALL SYLLABUS
Candidates should have a sound understanding of Paper 1.1 Preparing Financial Statements and 1.2 Financial Information for Management, Paper 1.3 Managing People and Paper 2.1 Information Systems The information in these papers will provide some of the basic material for strategy analysis and development
Paper 3.5 builds upon the knowledge obtained in Paper 1.3 by
• reinforcing the importance of recruitment and selection processes and procedures
• examining the importance of training and development and motivation within
a strategic context
• providing a more strategic view of human resource issues
• extending the coverage of work organisations
Paper 3.5 develops parts of the knowledge gained in Paper 1.1 and 1.2 by
• applying and interpreting financial information for strategy evaluation and strategy recommendation
• giving more emphasis on pricing policies and procedures
• examining performance measurement criteria
Paper 3.5 develops parts of the knowledge obtained in Paper 2.1 by
• reinforcing the knowledge of managing information systems at a strategic level
Although much of the knowledge gained in Part 3 will be specific to the individual papers, Paper 3.5 will, by its very nature, provide integration with most of the other papers at this level
In Paper 3.1 Audit and Assurance Services there will be links with professional and ethical considerations
In Paper 3.3 Performance Management there will be strong relationships with areas
on performance measurement and decision-making
In Paper 3.4 Business Information Management there will be related material
on information resource management and information systems and competition
In Paper 3.7 Strategic Financial Management there will be relationships with objectives and corporate governance, strategy formulation and the global economic environment
Trang 2Paper 3.5: Strategic Business Planning and Development (Continued)
SYLLABUS CONTENT
1 Models of strategic
management
(a) What is strategic management?
(i) corporate strategy
(ii) business strategy
(b) Why is strategic management
important?
(c) The process, content and context of
strategic management
(d) Process of strategy development
(i) deliberate or prescriptive strategies
(ii) emergent and incremental
strategies
(e) Strategic content
(i) strategic analysis
(ii) strategic choice
(iii) strategic implementation
(f) Strategic management in different
contexts
(i) configuration
(ii) culture
2 External environmental
scanning
(a) Analysis of the general environment
(i) SLEPT analysis
(ii) Porter’s diamond
(iii) forecasting and scenarios
(b) Analysis of the customers and
markets – marketing research
(c) Analysis of the competitive
environment
(i) five forces model
(ii) competition and collaboration
(iii) competitor intelligence for
business advantage
(iv)sustainable competitive advantage and critical success factors
3 Internal assessment
(a) Resource audit
(b) Analysis of capabilities and core competences
(c) Adding competitive value – value chain and value system
(d) Analysis of human resources
(e) Analysis of financial resources
(f) Analysis of operations resources
4 The nature of strategy analysis and choice
(a) The purpose of the organisation (i) stakeholder expectations (ii) cultural context (iii) mission, objectives and strategic intent
(b) Developing the strategy (i) alternative directions for strategy development
– resource based – market based – finance based (ii) methods of strategy development – internal development – strategic alliances – mergers and acquisitions
(c) Strategy evaluation and selection (i) analysis of suitability, feasibility and acceptability
(ii) corporate/ business strategy selection
5 The nature of strategy implementation
(a) Marketing issues (i) segmentation, targeting and positioning
(ii) strategies for market leaders, followers, challengers and nichers (iii) development and application of marketing mix strategies (b) Finance issues
(i) performance evaluation (ii) funding the implementation and the resource allocation
(c) Research and Development issues (i) management of innovation (ii) management and control of quality (d) IS/ IT issues
(i) IT/ IS as a strategic resource (ii) the management of information systems development
(e) HR issues (i) recruitment and selection (ii) motivation and discipline (iii) appraisal and performance evaluation
(iv) staff training and development (f) Project management issues (i) the project life cycle (ii) objectives of project management (iii) estimation of resource
requirements (iv)tools and techniques of project management
(g) Management of change issues (i) understanding the types of strategic change and their causes
Strategic Business Planning and Development (Continued)
Trang 3(ii) development of a strategic
change programme
– power influence
– culture influence
(iii) management roles in the
strategy change process
(iv) managing the strategic change
process
6 Matching structures with
strategy
(a) Types of organisation structures
(i) simple
(ii) functional
(iii) divisional
(iv) matrix
(v) multinational
(vi) global
(vii) strategic business unit
(b) Centralisation versus decentralisation
(c) Organisational configurations
7 The nature of global
competition
(a) The role of traditional international
marketing
(b) The development of the global
business
(i) market convergence
(ii) cost advantages
(iii) government pressures
(iv) currency volatility and trade barriers
(v) the emergence of global
competition
(c) Global strategies
(i) standardisation versus
customisation
(ii) product positioning (iii) channel management (v) the development of global brands
(d) Managing a global company (i) ethnocentric, polycentric or geocentric orientation (ii) cross cultural management and leadership
(e) Reaching global customers (i) international marketing research (ii) international market segmentation
8 Outcomes of the strategic management process
(a) Corporate versus business performance
(b) Sustainable competitive advantage (c) A learning organisation
(d) Alternative performance measures:
(i) financial (ii) non financial (iii) strategic
9 Ethical considerations
(a) The importance of social responsibility
(b) Corporate governance
(c) The attitude towards ethics on national and global scales
EXCLUDED TOPICS
The syllabus content outlines the areas for assessment No areas of knowledge are specifically excluded from the syllabus
KEY AREAS OF THE SYLLABUS
Although all the syllabus will be examined in some form, the core areas will be focused on the strategy formulation process This comprises the identification of corporate objectives, strategic analysis, including internal and external reviews, strategy development, evaluation and implementation
APPROACH TO EXAMINING THE SYLLABUS
Primarily the subject – Strategic Business Planning and Business Development – will
be considered at the strategic level All aspects will be considered in terms of practical application Wherever possible the subject will be integrated and not considered as a collection of isolated topics Operational activities will only be introduced where they impinge upon strategic considerations
The examination is a three hour paper in two sections Section A will be in the format of one major case study, usually with four question parts This will be compulsory and will focus on the core material, previously described, although other aspects of the syllabus could be introduced here Questions will be mainly discursive but there will usually be some financial or other quantitative data included here to be analysed Candidates are expected to closely relate all their answers
to the case scenario Section B will consist
of a choice of two questions, each of two parts, from a total of three available
Trang 4They will not be linked to the compulsory
case scenario, but may include short
scenarios to be discussed in context
Number
of Marks Section A: One compulsory
Section B: Choice of 2 from 3
questions (20 marks each) 40
100
ADDITIONAL INFORMATION
The Study Guide provides more detailed
guidance on the syllabus
RELEVANT TEXTS
There are a number of sources from which
you can obtain a series of materials written
for the ACCA examinations These are
listed below:
Foulks Lynch – ACCA's official publisher
Contact number: +44 (0)20 8831 9990
Website: www.foulkslynch.com
Accountancy Tuition Centre (ATC)
International
Contact number: +44 (0)141 880 6469
Website: www.ptc-global.com
BPP
Contact number: +44 (0)20 8740 2211
Website: www.bpp.com
Strategic Business Planning and Development (Continued)
STUDY SESSIONS
OVERVIEW OF STRATEGIC MANAGEMENT
1 Introduction to strategic management
(a) Strategic managment defined (i) corporate strategy – understand the strategic perspective
– evaluate the overall purpose and scope
– describe the expectations of owners
– describe the expectations of stakeholders
– explain the concept of added value
(ii) business strategy – be aware of the role of business units – identify market competition (b) The importance of strategic management
(i) define strategy and strategic thinking
(ii) differentiate between policy, strategy, tactics
(iii) understand the need for a long term view
(iv) define long term objectives (v) explain controlling the future (vi) understand long term efficiency
The Financial Training Company
Contact number: +44 (0)174 785 4302
Website: www.financial-training.com
Candidates may also find the following texts useful:
Johnson and Scholes Exploring Corporate
Strategy (6th edition) Prentice Hall Europe
Grant Contemporary Strategy Analysis:
Concepts, Techniques, Applications (4th
Edition) Brackwell Publisher ISBN
0631207 805 Other texts which may be useful to candidates:
Joyce and Woods Strategic Management
Kogan Page ISBN 0749435836
Wilson and Gilligan Strategic Marketing
Management: Planning, Implementation and Control (2nd edition)
Butterworth-Heinemann ISBN 075062244X
Keegan Global Marketing Management
Prentice Hall (6th edition) ISBN 0139030239
Wider reading is also desirable, especially regular study of relevant articles in ACCA's
student accountant.
Trang 5(c) The process, content and context of
strategic management
(i) describe the present position of
the organisation
(ii) understand the external
environment
(iii) understand the organisation at
present
(iv)evaluate where does the
organisation want to be
(v) demonstrate how is the
organisation going to get there
(d) The process of strategy development
(i) identify deliberate strategies
(ii) identify prescriptive strategies
(iii) identify emergent and
incremental strategies
(iv) understand strategic planning
and strategic management
2 The rational model
(a) strategic analysis
(i) assess the strategic position
(ii) evaluate expectations and
influence of stakeholders
(b) strategic choice
(i) define underlying influences
which guide strategy
(ii) evaluate strategic options
(iii)understand evaluation and
selection procedures
(c) strategic implementation
(i) define resource planning
(ii) define corporate strategy
(iii) define business strategy
(iv) define operational and financial
strategy
3 Strategic management in context
(a) Strategic configuration (i) understand logical incremental model
(ii) understand rational command model
(iii) understand cultural political influences
(iv) understand political choice
4 Culture
(a) Define the meaning of culture (b) Understand the determinants of culture: Schein
(c) Describe the cultural web: Johnson and Scholes
(d) Link culture with structure (e) Discuss models of culture: Handy, Miles and Snow, Peters and Waterman, Mintzberg (f) Understand changing organisational culture: Kanter, Lewin
(g) Evaluate the link between culture and strategic leadership (h) Identify regional and national culture
5 External environmental scanning
(a) Analysis of the general environment (i) SLEPT analysis
– be aware the social impact on the organisation
– be aware of the legal issues and implications
– be aware of the role and influence of the economy – be aware of the political environment
– be aware of the impact of technology
– be aware of complexity, dynamism and uncertainty – understand systems thinking – analyse the organisation as an open system
– understand the focal zone analysis (ii) Porter’s diamond
– explain firm strategy, structure and rivalry
– explain demand conditions – explain factor conditions – explain related and supporting industries
(iii) forecasting and scenarios – understand strategic life cycles – understand statistical forecasting techniques
– understand the delphi technique – understand scenario planning
6 Analysis of customers, markets and marketing research
(a) Explain aggregate and sectoral concentration
(b) Understand customer behaviour (c) Understand the principles of marketing research (d) Explain market research as a component of marketing research (e) Discuss social change and social trends
(f) Discuss demographic factors (g) Discuss population size (h) Discuss demographic change (i) Discuss social structure
Trang 6(j) Discuss economic change
(k) Analysis of the competitive
environment
(i) the five forces model
– understand the general model
– discuss intensity of rivalry
among existing competitors
– discuss bargaining power of
suppliers
– discuss bargaining power of
buyers
– discuss the threat of new
entrants
– discuss the threat of
substitutes
– evaluate the weaknesses of
the model
– explain the threat of potential
entrants
– understand the connection
with market structure
– discuss the role of government
and regulation
(ii) competition and collaboration
– review government regulation
– discuss the competition
commission
– compare different market
environments
– discuss cartels, oligopolies
7 Competitor intelligence for business
advantage
(a) Understand the portfolio analysis
approach
(b) Describe the Boston Consulting
Group model
(c) Describe the Shell directional policy matrix/nine cell grid
(d) Understand the importance of understanding portfolio analysis (e) Understand the product life cycle (f) Explain competitor benchmarking (g) Explain competitive positioning grid (h) Sustainable competitive advantage (i) define competitive advantage (ii) explain competitive advantage (iii) discuss generic strategies (Porter)
(iv)understand different approaches
by management (v) evaluate branding, patents, copyrights and trademarks (vi) identify national advantage (Porter)
(vii) evaluate the strategic role of the marketing mix
(i) Critical success factors (i) define how to measure success (ii) compare actual and relative success factors
(iii) compare efficiency and effectiveness
(iv) evaluate financial measures (v) contrast the expectations of stock holders and shareholders (vi)discuss quality issues (vii) evaluate success measurement for non profit making organisations
8 Internal assessment (a) Resource audit
(i) identify the quality, nature and extent of available resources
(ii) identify physical, human and financial resources
(iii) identify intangible resources (iv) understand unique resources and competitive advantage (v) evaluate internal control systems (vi) analyse departmental
organisation (b) Analysis of capabilities and core competencies
(i) formulate a SWOT analysis (ii) interpret a SWOT analysis (iii) describe the product life cycle (iv) understand the seven ‘S’ approach
(v) demonstrate threshold competencies (vi) demonstrate core competencies (vii) identify appropriate markets (viii) review quality and reliability (ix) explain product attributes
9 Adding competitive value
(a) Understand the value chain (i) link the value chain with organisational structure (ii) explain the value system (iii) discuss product and market differentiation
(iv) identify sources of differentiation (v) assess innovation
(vi) understand technical development (vii) identify new target markets (viii) identify new distribution channels
(ix) identify new market segments
Strategic Business Planning and Development (Continued)
Trang 7(x) be aware of sudden environmental
shocks
10 Human resource management
(a) Analysis of human resources
(i) understand skills and
competencies
(ii) discuss workforce adaptability
(iii) assess innovative capability
(b) Analysis of operations resources
(i) evaluate the availability of
resources
(ii) understand management
information and control systems
(iii) understand production control
systems
(iv) understand process control
(v) describe resource utilisation and
costs
11 Finance resource management
(a) Analysis of financial resources
(i) understand financial control
systems
(ii) understand capital structure
(iii) understand liquidity and gearing
(iv) define the “balanced scorecard:”
Kaplan and Norton
PURPOSE OF ORGANISATIONS
12 The nature of strategy analysis and
choice
(a) Stakeholder expectations
(i) understand stakeholder power
and influence
(ii) be able to carry out stakeholder mapping: Mendelow
(b) The cultural context (i) identify national and local culture (ii) understand organisational culture and objectives
13 Corporate mission and strategic objectives
(a) Mission, objectives and strategic intent (i) define policy, strategy and tactics (ii) define strategic vision
(iii) define the mission statement (iv) define strategic intent: Hamel and Prahalad
(v) define strategic scope (vi) state implicit and explicit objectives
(vii) evaluate the prime organisational objective (viii) evaluate the organisation’s policy
(ix)understand marginalist theories
of organisational objectives (x) explain the accounting concept of profit
(xi) explain the economist concept of profit
(xii) explain behaviourist theories of organisational
(xiii) identify the expectations of the owners
(xiv) evaluate the role of stakeholders
14 Developing the strategy
(a) Alternative directions for strategy development
evaluate PIMS analysis (i) understand resource based (ii) understand product value and development
(iii) explain withdrawal strategy (iv)explain consolidation strategy (v) explain market based strategy (vi) explain market development and extension strategy
(vii) explain market penetration strategy
(viii) explain market positioning strategy
(ix) understand growth vector analysis: Ansoff
(x) define the planning gap (xi) define finance based strategies (xii) understand the role of the budgetary process
15 Methods of strategy development
(a) Ccompare level one and level two strategies
(b) Evaluate internal development (c) Evaluate organic growth: Greiner’s growth model (d) Analyse joint ventures and strategic alliances (e) Review mergers and acquisitions (f) Define concentric and
conglomerate diversification (g) Define forward and backward integration
Trang 8(h) Be aware of the problems of
diversification and acquisition
16 Strategy evaluation and selection
Analysis of Suitability, feasibility and
acceptability suitability
(a) Suitability
(i) understand life cycle analysis
(ii) understand life cycle/portfolio
matrix
(iii) assess resources and
competencies
(iv) discuss business profile analysis
(v) understand strategy screening
(vi) be aware of decision trees
(b) Feasibility
(i) explain funds flow analysis
(ii) explain break even analysis
(iii) explain resource deployment
analysis
(c) Acceptability
(i) identify and justify expected
performance outcomes
(ii) review profitability analysis
(iii) review cost-benefit analysis
(iv) review risk analysis
(v) evaluate shareholder value
(vi) assess expectation of stakeholders
(d) Corporate and business strategy
selection
(i) formulate the role of planning
(ii) carry out a formal evaluation
(iii) analyse enforced choice
(iv) differentiate learning from
experience
(v) be aware of dominant
stakeholder selection
17 The nature of strategy implementation (a) Marketing issues
(i) segmentation, targeting and positioning
(ii) understand strategic group analysis (iii) define strategic groups and strategic space
(iv) describe market segmentation analysis
(v) explain segmentation by factor, market or organisation (vi) describe targeting (vii) distinguish between product and market positioning
(b) Strategies for market leaders, followers, challengers and nichers (i) understand the strategic clock:
Bowman (ii) understand the market options matrix
(iii) understand price based strategies
(iv) understand added value and differentiation strategies (v) explain hybrid strategy (vi) define focused differentiation
18 development and application of marketing mix strategies
(a) Discuss product strategy (b) Discuss price strategy (c) Discuss place strategy (d) Discuss promotion strategy
19 Strategic support functions
(a) Finance issues (i) performance evaluation – explain ratio analysis – be aware of financial measures
– understand ROCE, ROI, profitability
– apply balanced scorecard (ii) funding the implementation and allocation resources
– explain financial sources – explain capital allocation – explain shareholders' funds (b) Research and Development issues (i) management of innovation – assess the role of research and development in strategy – evaluate acquisition of new technologies
– discuss exploitation of existing technologies
– discuss innovation and existing products – discuss innovation and new products
– explain innovation and intrapreneurship (ii) management and control of quality
– discuss the role of quality in strategy
– describe quality procedures – explain quality assurance – explain total quality management
Strategic Business Planning and Development (Continued)
Trang 9(c) IS/IT issues
(i) IS/IT as a strategic resource
– understand organisation and
control of the information
strategy
– define usefulness and
application of information
technology
– assess monitoring advances
and changes in information
technology
– describe current good practice
– describe costs and benefits
– discuss information and
organisational structure
(ii) the management of information
systems development
– be aware of information as a
strategic device
– assess project selection
criteria
– understand the use, planning
and control of information
technology
– evaluate the application of
information technology
20 Human Resource management
(a) Recruitment and selection
(i) define the strategic role of human
resources
(ii) formulate the human resource
plan
identify and evaluate appropriate
recruitment methods
(iii) advise on succession planning
(b) Motivation and discipline (i) understand the appropriate motivational and supportive policies
(ii) describe the links between objectives, appraisal, reward and motivation
(c) Appraisal and performance evaluation (i) assess organisational and individual objectives (ii) assess appraisal methods (iii) discuss appraisal and competence assessment (iv) staff training and development (v) understand the importance of the management of change
(vi) describe the management of diversity
(vii) evaluate the role of teamworking and empowerment
21 Project management
(a) Define the project life cycle (i) understand the objectives of project management (ii) make an estimation of resource requirements
(iii) assess the efficient use of resources
(iv) understand operational research procedures
(b) Tools and techniques of project management
(i) understand statistical approaches (ii) describe statistical process control
(c) Operations management (i) assess the strategic significance
of operations (ii) link operations management and strategy
(iii) understand purchasing and inbound logistics
(iv) evaluate the manufacturing processes
(v) understand distribution and outbound logistics (vi) describe quality and quality regimes
(vii) have knowledge of just-in-time supply management
(viii) discuss business process re-engineering
22 Management of change
(a) Assess the motivation to change (b) Evaluate attitudes to change (c) Link together culture and change (d) Understand the managing of change: Lewin, System Intervention Strategy
(e) Process of understanding types of strategic change and their causes (i) identify external environmental change and shocks
(ii) identify internal environmental change
(iii) understand business relationships (iv) understand transformational change
(v) discuss enforced change (vi) identify technological change
Trang 10(vii) evaluate people issues
(f) Development of a strategic change
programme
(i) describe the Gemini 4Rs
framework
(ii) describe force field analysis
(iii) describe power influence
(iv) understand culture influence
(g) Management roles in the strategy
change process
(i) understand the importance of
communication and education
(ii) evaluate collaboration
(iii) evaluate intervention
(iv) assess the importance of direction
(v) describe routine change
(h) Managing the strategic change process
(i) evaluate changing identity of the
organisation
(ii) understand co-ordination and
transition
(iii) appreciate the need for control
(iv)describe the role of change
strategists
(v) describe the role of change
implementers
(vi) describe the role of change
recipients
ORGANISATIONAL STRUCTURE
23 Matching structures with strategy
(a) Types of organisation structures
(i) understand the determinants of
structure
(ii) evaluate the meaning of structure
(iii) describe the simple organisation (iv) describe the entrepreneurial organisation
(v) describe the functional organisation
(vi) describe the divisional organisation
(vii) describe the matrix organisation (viii) describe the multinational (ix) describe the global (x) understand the holding company (xi) evaluate the role of the strategic business unit
(xii) assess intermediate and variations in structure (xiii) discuss advantages and appropriateness of different structures
(xiv) understand the process stage towards globalisation Kenichi Ohmai, Keegan
(b) Centralisation versus decentralisation (i) evaluate issues in organisational structural change
(ii) understand organic and mechanistic structures: Burns and Stalker
(iii) describe contingency theory (iv) describe the virtual organisation (c) Organisational configurations (i) compare structural configurations: Mintzberg (ii) make a comparison of organisational types
INTERNATIONAL BUSINESS
24 The nature of global competition (a) The internationalisation of business
(i) understand the motivations behind internationalisation (ii) be aware of the concept of globalisation as distinct from international marketing (iii) discuss the competitive advantage of nations: Porter (iv) understand absolute advantage and comparative advantage (v) evaluate implications for organisational success (vi) explain internationalisation strategies
(vii) understand single markets and trading blocks
(viii) explain multinational organisations: Bartlett and Ghoshal
(b) The development of the global business
(i) discuss market convergence (ii) explain cost advantages (iii) explain government pressures (iv) understand currency volatility and trade barriers
(v) understand purchasing power parity
(vi) understand the emergence of global competition
Strategic Business Planning and Development (Continued)