Cima E3

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E3 – Enterprise Strategy

1. STRATEGIC FORMULATION

1.1 What is Strategy
Strategy – Long term plan of how to achieve an orgs objectives and resources needed. 3 ways to achieve these goals
Design (how) pre-determined detailed focused plan
Ideas (where ideas come from) seizing opportunities as and when, new ideas exploited •Experience (Flexibility) plan changes and adapts based on experience of market, what works and what doesn’t.

1.2 Positioning Approaches to achieving the goal – (focus on how org can achieve a fit with its environment) •Rational Planning (The ‘Lens’ of Design) – detailed advance planning analysis and strategy formulation

Strategic Planning Gap is the gap between where we are today and where we want to be at time X •Freewheeling Opportunism (The ‘Lens’ of IDEAS) – determining goals but resisting urge to plan how to achieve them oNo planning at all, lack of long term planning,

oGrab opportunities as and when they arise,
oUseful in creative organisations, e.g fashion designer, film maker, advertiser – need to grab the moment. •Mintzberg’s Theory of “Crafting Emergent Strategies” (The ‘Lens’ of Experience) – Formulation of a plan but includes ability to flex the plan, crafting into existing operations newly emerging opportunities and crafting out redundant intentions

Logical Incrementalism – no clear plan, feels its way forward through small incremental decisions – small growing entrepreneurial businesses. 1.3 Resource Based Approaches (focus on an organisations’ internal competencies) Johnson, Scholes & Whittington: •Strategic Capability – resources and competencies needed to survive •Tangible Resources – physical assets

Intangible Resources – non-physical assets
Competencies – activities and process org deploys
Threshold Competencies – what org needs to compete in market •Threshold Resources and Competencies – needed to meet customer expectations •Unique Resources and Core Competencies – underpin competitiveness and hard to imitate

1.4 The role of directors in strategy setting
5 elements of corporate governance5 types of decision
oCEO & MD/Chair are separateoBranding decisions
o½ of board are NED’soDividend policy decisions
oConstructive dialogue with shareholdersoInvestment the org makes oRemuneration CommitteeoMergers & Acquisitions
oInternal Audit CommitteeoProducts

2. CORPORATE OBJECTIVES & STAKEHOLDERS

2.1 The concept of Corporate Mission – Mission Statements are formal documents which state org’s mission. Lynch – criteria to judge effectiveness of a corporate mission statement: •Specific enough to impact upon individuals behaviour

Reflect distinctive advantage of org
Realistic and attainable
Flexible to demands of a changing environment
AdvDis Adv
Goal CongruenceVague e.g recognised as worlds best company •Strategic FocusMeasurement of achievement e.g how to measure if you are the worlds best company? •Communication with external stakeholdersIgnored – by senior management and staff

2.2 Objective Setting – org must consider needs of all stakeholders, broad range of measures required, financial & non-financial Specific, Measurable, Attainable, Relevant, Time bound.

2.3 Critical Success Factor (CSF) approach
Johnson & Scholes “those components of strategy where the org must excel to outperform competition. Underpinned by competencies which ensure this success. CSF can be used as a basis for preparing resource plans” 6 Steps:

Identify CSF’s for the process
Identify underpinning competencies required to gain competitive advantage •Ensure list of competencies sufficient to give competitive advantage •Develop performance standards – KPI’s
Ensure these cannot be copied
Monitor competitors and impact from the CSF’s
KPI = measurement (BPP pass rates)CSF = Process (BPP quality of teaching, materials, etc)

2.4 Stakeholders – Org must consider stakeholders in...
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