Strategic Position

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Topic Gateway Series

Strategic position

Strategic Position
Topic Gateway series no. 44

Prepared by Gillian Lees and Technical Information Service

1 March 2008

Topic Gateway Series

Strategic position

About Topic Gateways
Topic Gateways are intended as a refresher or introduction to topics of interest to CIMA members. They include a basic definition, a brief overview and a fuller explanation of practical application. Finally they signpost some further resources for detailed understanding and research. Topic Gateways are available electronically to CIMA Members only in the CPD Centre on the CIMA website, along with a number of electronic resources.

About the Technical Information Service
CIMA supports its members and students with its Technical Information Service (TIS) for their work and CPD needs. Our information specialists and accounting specialists work closely together to identify or create authoritative resources to help members resolve their work related information needs. Additionally, our accounting specialists can help CIMA members and students with the interpretation of guidance on financial reporting, financial management and performance management, as defined in the CIMA Official Terminology 2005 edition. CIMA members and students should sign into My CIMA to access these services and resources. The Chartered Institute of Management Accountants 26 Chapter Street London SW1P 4NP United Kingdom T. +44 (0)20 7663 5441 F. +44 (0)20 7663 5442 E. tis@cimaglobal.com www.cimaglobal.com

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Topic Gateway Series

Strategic position

Strategic Position
Definition
The strategic position is concerned with the impact on strategy of the external environment, internal resources and competences, and the expectations and influence of stakeholders. Together, a consideration of the environment, strategic capability, the expectations and the purposes within the cultural and political framework of the organisation provides a basis for understanding the strategic position of an organisation. Johnson and Scholes, 2005 It is important to take account of the future and to assess whether the current strategy is a suitable fit with the strategic position. If not, the organisation needs to determine what changes it needs to make and whether it is capable of effecting such changes. In summary, the strategic position forms an integral part of the strategic management process. It informs the strategic choices that need to be made and subsequently implemented.

Context
In the current syllabus, CIMA students will learn and may be examined on this topic in paper 6, Management Accounting, Business Strategy and paper 10, Test of Professional Competence in Management Accounting (TOPCIMA).

Related concepts
CIMA Strategic Scorecard ; competitor analysis; benchmarking; strategic planning; corporate strategy. Related topic gateways are the CIMA Strategic Scorecard , Key Approaches and Trends in Strategy and Strategic Analysis Tools. TM TM

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Topic Gateway Series

Strategic position

Overview
As indicated above, there are three key aspects of strategic position, all of which have a powerful influence on the organisation’s strategy: • • • the external environment the organisation’s strategic capability in terms of its resources and competences culture and ethical values of the organisation and stakeholder influences.

The real art of understanding strategic position is in being aware of the linkages between these three aspects, how they change over time and how they can be integrated to create value. Johnson and Scholes point out that a successful organisation ‘will have found a way of operating such that environmental forces, organisational resources and competences, and stakeholder expectations mutually reinforce one another’ (ibid). The crucial point to remember is that the best understanding of the strategic position counts for nothing unless the organisation can use the knowledge effectively to...
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