CIMA Official Learning System Strategic Level E3 — Enterprise Strategy Neil Botten CIMA Publishing is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA First edition 2008 Copyright © 2009 Elsevier Ltd All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone (ϩ44) (0) 1865 843830; fax (ϩ44) (0) 1865 853333; email: permissions@elsevier.com Alternatively you can visit the Science and Technology Books website at www.elsevierdirect.com/rights for further information Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data A catalogue record for this book is available from the Library of Congress ISBN: 978-1-85617-782-5 For information on all CIMA publications visit our web site at www.elsevierdirect.com Typeset by Macmillan Publishing Solutions (www.macmillansolutions.com) Printed and bound in Italy 09 10 11 11 10 Working together to grow libraries in developing countries www.elsevier.com | www.bookaid.org | www.sabre.org The Performance Pyramid (From ‘Do Financial and Non-Financial measures have to agree?’ By McNair, Lynch and Cross, Management Accounting US, November 1990 Reprinted by Permission of IMA, Montvale, NJ.) Contents The CIMA Learning System xv xv xv xvi xvii xix Acknowledgements How to use your CIMA Learning System Guide to the Icons used within this Text Study technique Paper E3 – Enterprise Strategy Setting the Goals of the Organisation Learning Outcomes 1.1 The identity of stakeholders 1.1.1 Sources of stakeholder power 1.1.2 Stakeholder claims on an organisation 1.1.3 Challenges and opportunities presented by stakeholder groups 1.1.4 Conflict between stakeholders 1.1.5 Management of stakeholders 1.2 Mission statements 1.3 Corporate social responsibility 1.3.1 The importance of CSR 1.4 Setting strategic objectives 1.4.1 The link between mission and objectives 1.4.2 The goal structure 1.5 Critical success factors 1.5.1 Defining critical success factors 1.5.2 Methodology of CSF analysis 1.6 Meeting the objectives of shareholders 1.6.1 Maximisation of shareholder wealth as an objective 1.6.2 Financial and non-financial objectives 1.7 Objectives of not-for-profit organizations 1.7.1 The nature of not-for-profit organisations 1.7.2 Example: the Chartered Institute of Management Accountants 1.7.3 Key features of NPO objective setting 1.7.4 Public sector objectives 1.8 Competing objectives 1.8.1 Importance of the existence of competing objectives 1.8.2 Resolving competing objectives iii 3 10 12 16 17 17 18 19 19 20 21 21 21 22 22 23 23 24 25 25 26 ENTERPRISE STRATEGY E3 CONTENTS iv 1.9 Summary 27 Revision Questions 29 Solutions to Revision Questions 31 Appraising the Environment 35 37 37 37 38 38 40 42 42 44 48 49 49 50 50 50 51 52 53 55 56 56 56 57 58 58 58 59 2.1 2.2 2.3 2.4 2.5 2.6 Learning Outcomes The importance of the business environment 2.1.1 Environmental impact assessment 2.1.2 Environmental segmentation 2.1.3 A model of the organisation in its environment 2.1.4 Example of a car manufacturer 2.1.5 Process of understanding environment 2.1.6 Evaluation of environmental segment models 2.1.7 Game theory 2.1.8 Survival and success factors Causes of environmental uncertainty 2.2.1 Components of uncertainty 2.2.2 Impact of uncertainty 2.2.3 Has uncertainty really increased? Competitor analysis 2.3.1 The importance of competitor analysis 2.3.2 Levels of competitors 2.3.3 Gathering competitor intelligence 2.3.4 Forecasting competitors’ response profiles Competitor accounting 2.4.1 Description 2.4.2 Evaluation of barriers to entry 2.4.3 Estimate competitors’ costs The global economic environment 2.5.1 The main sources of economic impacts on the firm 2.5.2 The new global economy 2.5.3 The European Union 2.5.4 The North American Free Trade Agreement (NAFTA) and other trade blocs 2.5.5 Globalisation of macroeconomic policies 2.5.6 The World Trade Organisation National competitive advantages 2.6.1 Background 2.6.2 Porter’s Diamond 2.6.3 Demand conditions 2.6.4 Related and supporting industries 2.6.5 Factor conditions 2.6.6 Firm structure, strategy and rivalry 2.6.7 Other events 2.6.8 National competitive advantage 2.6.9 Losing competitive advantage 2.6.10 Porter’s strategic prescriptions 60 60 61 63 63 63 63 64 64 64 64 64 65 65 v 65 66 66 67 67 68 68 69 69 CONTENTS 2.6.11 Comment on Porter’s Diamond 2.7 Country analysis and political risk 2.7.1 Political risk 2.8 Sources of environmental information 2.8.1 Environmental scanning 2.8.2 Accessing environmental information 2.8.3 Detailed environmental analysis 2.8.4 Categorisation of information sources 2.9 Summary ENTERPRISE STRATEGY Revision Questions 73 Solutions to Revision Questions 75 Position Appraisal and Analysis 81 83 83 83 84 84 85 86 87 87 88 88 88 89 90 90 90 91 91 92 92 93 93 94 95 98 99 101 103 103 103 105 107 108 108 3.1 3.2 3.3 3.4 Learning Outcomes The SWOT analysis 3.1.1 SWOT and corporate appraisal 3.1.2 Purpose of a SWOT analysis 3.1.3 The cruciform chart 3.1.4 From SWOT to strategy 3.1.5 The TOWS approach 3.1.6 The value of SWOT 3.1.7 When should SWOT take place? The position audit 3.2.1 Definition 3.2.2 The Ms model 3.2.3 Conducting the position audit Value chain analysis 3.3.1 Generating superior performance 3.3.2 The value chain 3.3.3 Primary activities 3.3.4 Support activities 3.3.5 Linkages within the value chain 3.3.6 Vertical linkages in the value system 3.3.7 Organisational implications of the value chain 3.3.8 Management accounting and the value chain 3.3.9 A practical example 3.3.10 Evaluation of value chain analysis 3.3.11 Alternative value chains 3.3.12 Strategic Supply chain management 3.3.13 The lean supply chain Benchmarking 3.4.1 Definition 3.4.2 Purposes of benchmarking 3.4.3 Stages in setting up a benchmarking programme 3.4.4 Benchmarking and performance measurement 3.4.5 Evaluation of benchmarking 3.4.6 An example of benchmarking CONTENTS vi ENTERPRISE STRATEGY E3 3.5 Gap analysis 3.5.1 Definition 3.5.2 Example of a gap analysis diagram (Figure 3.11) 3.5.3 Using gap analysis 3.5.4 Forecasts and gap analysis 3.5.5 Four levels of uncertainty 3.5.6 A conclusion on gap analysis 3.6 Scenario planning 3.6.1 Planning scenarios 3.6.2 Constructing scenarios 3.6.3 Using scenarios in strategy formulation 3.6.4 Advantages of scenario planning 3.7 Foresight 3.8 Summary 113 113 113 113 114 115 117 117 117 118 121 122 122 123 Revision Questions 125 Solutions to Revision Questions 131 Strategic Aspects of Marketing Learning Outcomes 4.1 Sources of earnings 4.1.1 Earnings as an objective 4.1.2 Product versus customer views of earnings 4.1.3 Implications of the different views of earnings 4.2 Product life cycles 4.2.1 The product life cycle model 4.2.2 Using the product life cycle model 4.2.3 Problems of the product life cycle model 4.3 The BCG portfolio matrix 4.3.1 Levels of portfolio analysis 4.3.2 The growth-share matrix 4.3.3 The importance of relative market share 4.3.4 Strategies for each quadrant 4.3.5 Evaluation of the BCG matrix 4.3.6 Customer portfolio analysis 4.3.7 Alternative portfolio models 4.4 Direct product profitability 4.4.1 Origins of the concept 4.4.2 Calculating DPP 4.4.3 Improving DPP 4.4.4 Evaluation of DPP 4.5 The nature of a marketing audit 4.5.1 The marketing audit 4.5.2 A brief description of the role of marketing 4.5.3 Marketing planning 4.5.4 The content of a marketing audit 4.5.5 Steps in conducting a marketing audit 4.6 Customer profitability analysis 147 149 149 149 149 150 151 151 152 153 154 154 154 155 156 157 158 161 162 162 162 163 164 164 164 164 166 167 167 168 ENTERPRISE STRATEGY 4.8 4.9 4.10 5.3 5.4 188 188 188 189 190 Revision Questions 193 Solutions to Revision Questions 199 Strategic implications of IT 5.1 5.2 168 168 168 170 171 173 174 175 176 176 176 177 179 180 181 181 181 182 182 183 184 184 185 186 187 Introduction The strategic case for IT investment 5.2.1 Three information strategies 5.2.2 Information technology strategy 5.2.3 Information systems and information management strategies 5.2.4 The applications portfolio 5.2.5 Major investment decisions Using IT to gain competitive advantage 5.3.1 The value chain 5.3.2 Defining competitive advantage Using IT for competitive advantage 5.4.1 Cost leadership 211 213 213 214 214 215 216 217 217 218 218 218 219 CONTENTS 4.7 4.6.1 Definitions 4.6.2 Two views of customer profitability 4.6.3 Customer account profitability (CAP) analysis 4.6.4 Examples 4.6.5 Attribute costing 4.6.6 Evaluation of CAP analysis 4.6.7 Life cycle customer value 4.6.8 Concluding comments on customer profitability analysis Brand strategies 4.7.1 Description of a brand 4.7.2 Importance of brands to strategy 4.7.3 Five brand strategies 4.7.4 Challenges to branding 4.7.5 Financial management of brands 4.7.6 Valuing brands Relationship marketing 4.8.1 Factors giving rise to relationship marketing 4.8.2 Relationship marketing versus transactions marketing 4.8.3 Strategies to develop relationship marketing 4.8.4 A broader role for relationship marketing Data Warehousing and Data Mining 4.9.1 Data warehousing 4.9.2 Evolution of data warehousing 4.9.3 Data mining 4.9.4 Data mining and the Internet 4.9.5 Objectives and management issues of data warehousing and mining 4.9.6 Issues with objectives 4.9.7 Issues with management 4.9.8 The future of data warehousing and data mining Summary vii CONTENTS viii ENTERPRISE STRATEGY E3 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.4.2 Differentiation 5.4.3 Focus Using information for competitive advantage 5.5.1 Cost leadership 5.5.2 Differentiation 5.5.3 Focus 5.5.4 Linkages with suppliers or customers 5.5.5 A composite example Value-added networks and extranets 5.6.1 Description 5.6.2 VAN provision 5.6.3 Competitive advantage 5.6.4 Extranets Using e-commerce for competitive advantage 5.7.1 What is e-commerce? 5.7.2 Establishing an e-commerce strategy 5.7.3 Social and technological effects of the Internet 5.7.4 Web 2.0 and social networking The need for information systems strategies 5.8.1 Background 5.8.2 Why have a strategy for the IS? 5.8.3 Benefits of a formal strategy 5.8.4 IS, IT and IM strategy 5.8.5 Content of IS, IT and IM strategies Collaborative strategies 5.9.1 Business Information Strategies – Corporate Partnerships and Alliances Developing an information systems strategy 5.10.1 General planning models 5.10.2 The link between corporate strategy and IS strategy 5.10.3 Limitations of strategic planning models 5.10.4 An IS planning model 5.10.5 Alternative models The changing role of the IT department 5.11.1 Initiation/contagion 5.11.2 Control 5.11.3 Integration 5.11.4 Downsizing and rightsizing the IT department 5.11.5 Information centres Organisational knowledge management 5.12.1 Introduction 5.12.2 Knowledge management 5.12.3 What is knowledge? 5.12.4 Where does knowledge come from? 5.12.5 What is the value of knowledge? Developing a knowledge strategy 5.13.1 Information technology infrastructure 5.13.2 Knowledge sharing systems 219 220 220 220 221 221 221 221 223 223 223 224 224 225 225 228 229 230 237 237 237 238 238 239 240 240 241 242 242 243 243 245 245 245 245 245 246 247 248 248 248 250 250 250 251 251 252 6.2 6.3 6.4 6.5 6.6 6.7 254 255 255 256 256 256 257 Revision Questions 259 Solutions to Revision Questions 263 Strategic Options and their Evaluation 6.1 ix CONTENTS 5.13.3 Cultural issues 5.13.4 Capturing knowledge 5.13.5 Storing knowledge 5.13.6 The benefits of OKM 5.14 Profit impact of marketing strategy 5.15 Executive Information Systems 5.16 Summary ENTERPRISE STRATEGY Learning Outcomes Three sets of strategic choices 6.1.1 Recap and overview 6.1.2 Development strategies 6.1.3 Some illustrations Porter’s generic competitive strategy model 6.2.1 Three generic strategies 6.2.2 Diagram of Porter’s model 6.2.3 Competitive advantage 6.2.4 Competitive scope 6.2.5 Focus strategies 6.2.6 An illustration of Porter’s model – automobiles 6.2.7 Using Porter’s model 6.2.8 Limitations of Porter’s model 6.2.9 Alternatives to Porter: the resource-based view Product-market strategies 6.3.1 The Ansoff matrix 6.3.2 Market penetration strategy 6.3.3 Product development strategy 6.3.4 Market development strategies 6.3.5 Diversification strategies 6.3.6 Strategic development and risk Alternative growth strategies 6.4.1 The expansion method matrix 6.4.2 Internal development 6.4.3 Joint development strategies 6.4.4 Mergers and acquisitions International growth strategies 6.5.1 Types of international growth 6.5.2 Issues in international growth strategies Resource-based versus positioning view of strategy 6.6.1 The positioning approach 6.6.2 The resource-based view 6.6.3 Comments on resource-based views of strategy Divestment strategies 6.7.1 Methods of divestment 271 273 273 273 274 274 275 275 276 276 277 278 278 279 279 282 282 282 282 283 283 284 285 286 286 287 293 300 304 304 306 307 307 307 309 310 311 ENTERPRISE STRATEGY F Facebook 234 Factor conditions, Porters’ Diamond 64 FAIS System 187 FARCAST 187 Fayol, H 353 FDI see Foreign direct investment (FDI) Feasibility tests, strategy evaluations 317 Financial control companies 433–4 Financial issues: brands 176–7 controls 306, 432, 433–4 international growth strategies 306 mergers and acquisitions 303 performance measurement 426, 440–1, 458 Financial Management 108, 109 Financial ratios 413–14 Financial risks 286 Firefly 187 Firm infrastructure 91 Fitzgerald, L 443, 452 Five Forces Model (Porter) 38, 280, 343 basics 38 concepts 38 examples 40–2 limitations 279–82 usage 39 Fixed costs, importance 435 Fjeldstad’s value chain analysis 98 Fleisher, C.S.F 54 Flexibility needs: change 53, 140, 352, 353 GE Business Screen Matrix 161 Flexible manufacturing systems (FMS) 92 Flickr 232 Focus strategies 278 Forecasts: chaos theory 50, 356, 358–9 competitor response profiles 51 contemporary approaches 354–62 definition 114 earnings 430 gap analysis 113–17 product life cycle model 151–2 rolling quarterly plans 459 Foreign direct investment (FDI) 58, 335, 460 Formulation approaches, business strategy 50, 121–2, 354 Forward vertical integration 284 Four CPs of Measurement (Neely) 416 Franchises 275, 299 Fraser, R 379, 457 Fraud detection 187 Free trade 60, 61 Fully distributed organisation 246 Functional benchmarking 104 see also Benchmarking Functional organisations 353 Fund sources: charity sector 315 Futures, uncertainties 117, 119 G GALILEO system 240–1 Game theory 44–9 co-operation 44–5 deterrence 45–6 mathematics 46–8 structure changing 46 success factors 48–9 survival 48–9 Gap analysis 113–17 concepts 113–17 definition 113 examples 113 forecasts 114–15 GE see General Electric (GE) General Agreement on Tariffs and Trade (GATT) 61 General Electric (GE) 419 Business Screen Matrix 161, 256 Generic products 179 Generic strategies 275–6 Gilligan, C 51, 68, 153–4 Gleick, J 356 Global corporations 66, 305 Global economic environment 58–63 see also International growth strategies Global organisations’ strategy 240 INDEX Exit barriers see Barriers to entry/exit Expansion method matrix 286 experience curves 155, 157, 277 Explicit knowledge 251 Exporting strategies 304 External developments 286 External stakeholders 17 see also Stakeholders Extranets 223–5, 253–4 and value-added networks 223–5 Extraordinary management 359–61 Ezzamel, M 361, 362, 366, 373, 388 669 INDEX 670 ENTERPRISE STRATEGY E3 Globalisation dynamics 58, 60–1, 100 Goals 3–26, 351–2, 499 concepts 3–26, 351–2 congruence 18 objectives 11–12 organisations 351 setting goals 3–26 structure 18–19 Goodwill 308 Goold, M 422, 433–4 Governments: macroeconomic policies 60–1 political risk 66–7 strategy evaluations 316 see also Politics Govindarajan, V 93–4 Grant, competitor intelligence 53–5 Graphical user interfaces 186 Groupware 252–3 Growth: acquisition 512–13 alternatives 516 organic means 513–16 Growth rates: balanced scorecards 446–50 BCG growth-share matrix 157–8 customers 150 Growth-share matrix, BCG 157–8 Growth stage, product life cycles 151–2, 180, 200, 591 H Hamel, G 282, 367 Hammer, M 93, 363–4 Handy, C 369 Hanson, Lord 463 Hardware needs 42 Harvesting policies 156 Hatch, M.J 50 Hauser, C 365 High–low forecasts 116 Hodgetts, R.M 66 Hoffman, J.D 19 Holding companies 353 Holistic needs, public sector 315 Home working 403 Hope, J 355–6, 372, 374, 457 Hope, T 355–6, 374 Hopwood, A.G 412 Horizontal reporting 374 HR see Human resources (HR) Huczynski, A 351 Hufford, meta data 188 Human resources (HR): benchmarking 103–4 business process re-engineering 362–8 citizens’ rights 59 contract staff 369 controls 412 core workers 369 empowerment issues 354–5, 363, 366 flexibility needs 369, 444 home working 403 information technology 214 intellectual capital 443 knowledge workers 120, 248, 251, 356, 372 motivation factors 19, 301–2, 374, 587 Ms model 88–9 multi-skilled staff 92 new patterns 369–72 objectives 17 organisations 353, 367, 369 recruitment markets 183, 360 relationship marketing 181–4 remuneration issues 374 scientific management 353 six markets model 183 skills 360, 412 stakeholders 3, 5–6 strategic change 495 strategy evaluations 316 time-flexibility needs 444 training 91, 287, 439 value chain analysis (alternatives) 98–9 value chain analysis (Porter) 90–103 see also Teams I IBM 309, 363, 502 IKEA 380 Impact assessments 37–44, 58 Imperial Leather 154 Implementation issues: management accountants 434 strategy implementation 372–5 value-based management 422–3 Import duties 461 Imputed charges 419, 421 Inbound logistics, value chain analysis (Porter) 91, 92, 95, 96 Income tax 423 Incremental change 502 ENTERPRISE STRATEGY Information technology (IT): adoption 245 applications portfolio 216–17 case for investment 213–17 collaborative strategies 240–1 competitive advantage 225–7 competitive strategy focus 220 control 245 cultural issues 254–5 data mining 184–9 data warehousing 184–9 definitions 214 departmental role changes 245–8 downsizing 246–7 history 237–8 information centres 248 information strategies 214 infrastructure 251–2 integration 245–6 investment decisions 217 organisations 213 rightsizing 246–7 strategic implications 213–57 strategy 214, 228–9, 237–8, 240 vendor driven partnerships 241 virtual organisations 369 see also Technological factors InfoTEST International 225 Inmon, data warehousing 184 Innovations: performance measurement 412, 416, 426, 434 public sector 312 strategies 18, 306, 454 Intangible assets 592, 615 Integration issues: alliances 294 cost systems 436–7 diversification strategies 284–5, 463 information technology 245–6 integrative thinking 354 objectives 18 regional economic integration 58 supply chain management 99–101 vertical integration 48, 52, 284, 463 Intel 42, 46 Intellectual capital: concepts 17, 443 measures 443 see also Knowledge Intensive strategies 114 Inter-firm rivalry 497 INDEX Indirect costs, activity-based costing 162, 439, 461 Industrial Revolution 239 Industry life cycle analysis 335 Influence markets, six markets model 181 Information: collection processes 215, 238–9, 402 for competitive advantage 225–7 computer-based services 69 concepts 42, 67, 214, 215, 220, 230, 231, 232, 234, 237, 238, 240, 481, 482 data mining 184–9 data warehousing 184–9 databases 68, 189, 215, 251, 254, 567 dissemination needs 68, 295 managers 68, 454 performance measurement 434–40 primary sources 69 secondary sources 69 sharing 254 society 355 sources 69, 481 strategy formulations 50 supply chain management 99–101, 220 systems strategy 95 turned into knowledge 250 uncertainty impacts 49, 342 wave 355, 356, 457 see also Data; Knowledge Information centres 247, 248 definition 247 key functions 247 Information management strategy 214, 215–16 content 239–40 definition 214 Information Systems Manager (ISM) 240 Information systems strategy 213, 214, 215 alternative models 245 architecture 243–4 benefits 238 components 243–4 content 239–40 corporate strategy link 240–1 definition 214 development 237–40 need 237–40 planning models 242 purpose 241–2 relationships 239–40 web 2.0 and social networking 230–7 671 INDEX 672 ENTERPRISE STRATEGY E3 Internal benchmarking 104 see also Benchmarking Internal developments 275, 287–93, 444 Internal measures, performance 441–2, 444 Internal perspectives, balanced scorecards 446–50 Internal stakeholders 4, 8, 98 see also Stakeholders International growth strategies: concepts 304–6 cultural issues 54, 460 financial control 306 social issues 55, 306, 412 types 304–5 see also Global; Multinational enterprises (MNEs) Internationalisation dynamics 58, 468 Internet 69 communication effects 117, 214, 225 data mining 187 IT strategy 230–7 social effects 229–30 technological effects 229–30 Interventionist style 520 Intra-industry partnerships 241 Intranets 251, 253, 255 Introduction stage, product life cycles 151, 452–3 Investment and resource strategy: appraisals 180 concepts 140–1, 144, 320–1 data warehousing 184–5 e-commerce costs 229 GE Business Screen Matrix 161 information technology 214 NPV 319, 320, 322, 418 rational strategy processes 320 research and development 47, 195 Investors’ exit route 311 IT see Information technology (IT) IVANS system 241 J Jain, S.C 68 JIT see Just-in-time (JIT) Johnson, G 19, 274, 316, 503 Joint developments 274, 275, 293–300, 314–15 Joint marketing partnerships 240–1 Joint projects 327 Joint ventures 297–8 Just-in-time (JIT) 92, 95, 100, 183, 223, 264, 637 K Kanter, R.M 354–5 Kaplan, R.S 389, 402, 413, 415, 435, 436, 446, 448, 449, 451, 489 Kellogg’s 178, 179 Key performance indicators (KPIs) 20, 96, 106, 384, 390, 654 Knowledge: access 251–2 acquisition 283 concepts 353–4 contracts 246 culture 254 developing strategy 251–6 groupware 252 intra/extranets 253–4 origins 248 sharing 251–4 strategy development 251–6 systems 252–3 tacit knowledge 252 types 251–2 use 266 value 250–1 workflow 253 see also Information; Intellectual capital Knowledge discovery in databases (KDD) 186 Knowledge management 248–51 expense 254 hybrid solutions 254 knowledge contracts 250 knowledge work processes 250 organisational 248–51 principles 248 Knowledge workers 120, 248, 356, 372 Knox, P 58, 59 Kotler, P 52, 55, 159, 165, 168, 174, 176, 177, 184 KPIs see Key performance indicators (KPIs) L Lagging indicators 440 Leadership styles 498 see also Managers Lean manufacturing 438 Learning curves 78, 155, 557 ENTERPRISE STRATEGY M Macroeconomic policies 60–1 Management accountants: challenges 373–4 change 388 controls 352, 384, 402 conventionality problems 435 CSF analysis 20 implementation issues 411 organisations 371, 415 performance measurement 412, 434–40 position audits 88 roles 372 see also Chartered management accountants Management Accounting 171, 281, 353, 371–2 Management buyins (MBIs) 311–12 Management buyouts (MBOs) 311–12 Management information systems (MIS) 214, 246, 257, 374, 589, 640 Managerial barriers: to change 507–8 Managers: activity-based management 94, 95, 366, 382, 402, 436, 437–40, 460 benchmarking 34, 103, 104 competitor analysis 50 conflicts contemporary approaches 354–62 controls 384, 412, 464 data mining 186–7 data warehousing 185 environmental scanning 67–8 extraordinary management 359 information availability 185, 269 leadership styles 498 new wave management 361–2 objectives 8, 17, 21, 22, 23, 96, 188, 310, 314, 424 ordinary management 359 product life cycles 49, 100 reward schemes 426, 440 risks 293 roles 154, 352, 372, 390, 433 stakeholders 3, 5–8, 16 strategic change 375 strategy evaluations 316 strategy formulations 42, 121 value-based management 422–32 value chain analysis 90–9 virtual organisations 369–70 Managing decline 516–19 Mansfield 288 Manufacturing businesses 437 March, J.G 11 Market capitalisation 22, 423, 426, 427, 429, 617 Market entering barriers 497 Market pull 288 Market risks 285–6 Market shares 155, 486, 531 Market value added (MVA): concepts 426 critique 429 definition 426 Marketing: boundary-spanning role 166 competitor analysis 50–1 concepts 168–9, 181 INDEX Learning organisations 248, 249, 511 Legacy systems 450 Legal factors: barriers to entry 56 environmental issues 43 multinational enterprises 460 political risk 66–7 Legal responsibilities Levin, data warehousing 188 Levitt, T 164–5 Life cycles: brands 152, 153 customers 151 industries 46 performance measurement 452–4 products 45, 100, 151–4, 156, 174–5, 452–4, 462 Line extensions, brands 177 Linguistic issues, e-commerce 227 Linkages 92 customers 221 suppliers 221 LinkedIn 235 Llewellyn, S 108, 109 Logistics 90–9, 107 concepts 90–9 supply chain management 99–101 value chain analysis (Porter) 90–9 Low cost approaches 217 Loyalties, customers 78, 182, 458, 506 Lucent Technologies 224 Lynch, R 11–12, 286, 354 673 INDEX 674 ENTERPRISE STRATEGY E3 Marketing: (Continued) customers 181–90 definition 164 mix 165 orientation 165, 166, 171, 184, 366 partnerships 240 product attribute costing 171, 172 product life cycles 153 relationships 181–4 strategies 145 transactions marketing 182 value chain analysis (Porter) 90 Marketing audits: concepts 164–6 content 167 position audits 164, 167 steps 167–8 Markets: barriers to entry/exit 48, 56, 78 BCG growth-share matrix 154–5 data mining 184 development strategies 167, 283–4 European Union 59–60 Five Forces Model (Porter) 38, 39, 276 free trade 60 intensive strategies 114 new markets 76, 129, 137, 208, 282, 284, 337, 345 penetration strategies 282–3 position audit 89 product life cycles 151–2 product-market strategies 282–6 scenario planning 117–22 six markets model 183 target markets 165, 166, 190 Marlboro 177, 179 Mars 52, 176, 177 Marx, K 371 Maslin Multidimensional Matrix 313 Massachusetts Institute of Technology (MIT) 363 Matching methods, SWOT analysis 85 Matrix classification types, organisations 216 Matrix organisational structures 353 Mattison, data warehousing 184 Maturity stage, product life cycles 152 MBIs see Management buyins (MBIs) MBOs see Management buyouts (MBOs) McDonald’s 66, 176, 299, 333, 513 McNair, C.J 452 Mendelow matrix Mercedes-Benz 176, 280 Merchandising matrix 164 MERCOSUR 60 Mergers and acquisitions: benefits 303 bid premiums 303 concepts 302–3 divestment strategies 310–12 drawbacks 303–4 economies of scale 300 failure reasons 118, 302 financial issues 306, 308 meta data 185, 188, 189 motivation 301–2 price paid 303 success reasons 302 value creation logic 303 Metrics 423, 426, 440, 450, 462 Microsoft 66, 96–7, 118, 227–8, 234, 241, 320, 322 MIS see Management information systems (MIS) Misjudgements, scenario planning 117 Mission: balanced scorecards 446–7 concepts 10–11 definition 10 elements 12 examples 12 nature 11 objectives link 17–18 origins 10 roles 10–11, 12 statements 10–12, 18, 458 MIT see Massachusetts Institute of Technology (MIT) MNEs see Multinational enterprises (MNEs) Montblanc 151 Motivation factors 19, 301, 374, 587 Motorola 106 Mouritsen, J 443 Ms model, position audits 88–9 Multi-skilled staff 92 Multibrands 178 Multidimensional performance measurement 440–1 Multidivisional organisations 415 Multinational enterprises (MNEs): concepts 59, 305, 460–1, 462, 463 controls 461 definition 460 growth strategies 304 legal factors 39 ENTERPRISE STRATEGY N NAFTA see North American Free Trade Agreement (NAFTA) Nalebuff ’s complementor concept 41–2 National competitive advantages 63–6 National Health Service (NHS) 108, 401 Nationalised industries 24 Need and provision matrix 313 Neely, A 416, 447, 455, 457 Net assets 418 Net present value (NPV) 138, 180, 319, 320, 322, 323, 418, 419, 427, 487, 613 Net profits 417, 428 Network organisations: business process re-engineering 362–8 concepts 362 controls 457–8 definition 362 forms 457 supply chain management 99–101 transaction costs 95 value chain analysis 90, 95 virtual organisations 369–70 Network structures, definition 98 Networks, value-added 223–5 New entrants, Five Forces Model (Porter) 276 New global economy 58–9 New markets 76, 129, 137, 145, 284, 285, 288, 337, 345, 346 New products 84, 93, 100, 116, 127, 133, 137, 139, 140, 150, 151, 173, 177, 178, 179, 196, 224, 236, 286, 288, 292, 345, 392, 393, 418, 422, 454, 479, 584, 605, 610, 621 see also Products New wave management 361, 362 NEWSHOUND 187 NHS see National Health Service (NHS) Niche social networking 235–6 Nike 176, 228 Ning 235 Nolan’s model 215, 245 Non-financial issues: performance measurement 27, 434, 435 shareholders 21–2 Non-value-added activities 440 North American Free Trade Agreement (NAFTA) 60 Northcott, D 108, 109 Norton, D.P 446, 448, 449, 451, 472 Not-for-profit organisations (NPOs): concepts 22 examples 23 objectives 22–5 transparency 315 NPOs see Charity sector; Not-for-profit organisations (NPOs) NPV see Net present value (NPV) O Objectives: characteristics 17 competing objectives 25–6 competitors 49 composite measures 26 concepts 10, 17–19, 425 data mining 188 data warehousing 188 definition 11 examples 18 functions 18–19 goal structures 18–19 learnings 11, 292 managers 8, 18, 19, 22, 111, 112, 281, 286, 454 mission link 17–18 non-financial objectives 21–2 not-for-profit organisations 22–5 PRIME acronym 19 priorities 23, 25 public sector 24–5 setting objectives 24 shareholders 21–2 SMART requirements 18 stakeholders 26 weightings 26 Office of Fair Trading 41 OKM see Organisational knowledge management (OKM) OLAP see On-line analytical processing (OLAP) OMS see Organisational management system (OMS) INDEX Porter’s Diamond 63 subsidiaries 464 taxation 460, 461 transfer prices 461–2, 463 see also International growth strategies MVA see Market value added (MVA) MySpace 234 Mystery shoppers 456 Myths, e-commerce 225–30 675 INDEX 676 ENTERPRISE STRATEGY E3 On-line analytical processing (OLAP) 186, 364 On-line databases 69 Open book accounting 101 Open systems 50, 238, 404 Operating profit margin 423, 424, 430, 469, 479 Operational ABM 439 Operational controls 415, 432 Operational decisions 417 Operational risks 286 Operations: performance measurement 448 political risk 66–7 value chain analysis (Porter) 90, 93 Opportunistic behaviour 373–4 Opportunities: e-commerce 228 SWOT analysis 85–7 Opportunity costs 418, 419, 429 Oracle 436 Ordinary management 359–60 Organisational development (OD): consultant 499 objectives 498–9 Organisational implications, value chain analysis 93 Organisational knowledge management (OKM): benefits 251 cultural issues 251, 254 definition 248 Organisational learning 250, 309, 359, 361, 443, 448, 511 Organisational management system (OMS) 251 Organisational structures: business process re-engineering 362 business strategy 351 centralisation factors 101, 354 classical model 353 concepts 353, 362, 369, 433, 462 contemporary approaches 354–62 contingency theory 353–4, 403 forms 369 future prospects 369 multinational enterprises 59, 305, 460 network organisations 362 see also Structures Organisations: business process re-engineering 93, 362–8 centralisation factors 354 chaos theory 356 classical model 352 concepts 184, 351, 433 contemporary approaches 354–62 contingency theory 353–4, 403 controls 352, 367, 412 cultural issues 254, 287, 355 definition 351 extraordinary management 359 forms 297 future prospects 361 goals 351 human resources 89 information technology importance 214 intellectual capital 443 management information systems 214 matrix classification types 216 multinational enterprises 59, 305, 460 network organisations 93, 98, 99, 100, 362 shamrock organisations 369 social issues 13 theory 229, 353–4 virtual organisations 369–70 Outbound logistics, value chain analysis (Porter) 91 Outputs: business process re-engineering 367 performance measurement systems 371 Outsourcing decisions 95, 134 Overheads, value chain analysis (Porter) 91 Overseas manufacturing 304 P Pan-national economic and political bodies 61 Partially distributed organisation 246 Participating teams 355 Participative style 520 Partnerships: business information strategies 240–4 customer-supplier 241 intra-industry 241 IT vendor driven 241 joint marketing 240–1 Patents, barriers to entry 78, 431 Payne, A 183 PepsiCo 46 Performance measurement: activities 438 ENTERPRISE STRATEGY PESTLE framework 496–7 Piercy, N.F 452 Planned change 501 Planning issues: information systems models 237–40 objectives 18 scenarios 122 strategic plans 68, 167, 433 uncertainty impacts 49, 113, 115 Politics: industry life cycle 49 PEST analysis 38–9 public sector organisations 24–5 risk 66–7 see also Governments Porter, M.E see Five Forces Model (Porter); Three Generic Strategies Model (Porter) Portfolios: alternative models 245 BCG portfolio matrix 154–61 concepts 157, 161 customer analysis 158–61 types 154 Position, Four CPs of Measurement (Neely) 416 Position appraisals see Corporate appraisals Position audits: chartered management accountants 89 concepts 88, 89, 164 definition 88 items 88 marketing audits 164–8 Ms model 88–9 techniques 83–4 Power interest matrix PPA see Product profitability analysis (PPA) Prahalad, C.K 282, 309, 367 Predictions, definition 114 Preparing for the examination 537–9 Present value 57, 168, 304, 365, 418, 419, 423 Prêt Manger 94 Prices: cuts 51, 55, 276 transfer prices 417, 461–2, 463 Primary activities: value chain analysis (alternatives) 98–9 value chain analysis (Porter) 90–9 Primary sources, information 69 PRIME acronym, objectives 19 Priorities, objectives 23, 25 INDEX areas of activity 440–1 balanced scorecards 436, 446, 447 benchmarking 440 beyond budgeting round table 457–9 capital 442 concepts 412 conventional profit-related measures 416–22 customers 454 data collection 279 data envelopment analysis 26 depreciation effects 422 development suggestions 441–2 economic value added 426, 488 financial issues 433, 440, 443 focus strategies 277–8 Four CPs of Measurement (Neely) 416 functions 416 gap analysis 113–17 information 440–1 innovations 412 intellectual capital 17, 443 internal measures 441–2 key performance indicators 20, 96, 106 management accountants 388–9, 390 market value added 426, 427 multidimensional aspects 440–52 multinational enterprises 460–4 non-financial issues 452 processes 411, 413 product life cycles 138, 452–3 profit-related measures 416–22 pyramid 452 residual income 419–20 return on investment 419 six-dimensional performance matrix 443–6 stakeholders 454–7 suppliers 441 technological factors 441 total shareholder return 429–30 value-based management 422–32 value chain analysis (Porter) 90–1 see also Controls Performance pyramid 452, 460 Permeable organisation boundaries 93 Perrier Water 153 Personal computers (PCs), attribute costing 171–2 PEST analysis 38, 39, 43, 66 PESTEL analysis 39 677 INDEX 678 ENTERPRISE STRATEGY E3 Private-label products 179 Probabilities, uncertainties 115 Problem children 156 Processes: balanced scorecards 436, 446, 447 benchmarking 105, 106–7, 108, 366 business process re-engineering 93, 95, 352, 362–8 capital 417 controls 352, 359 data management 186, 188 performance measurement 412 power 382 Procter & Gamble 52 Procurement activities 91 Product-market strategies: concepts 282–6 risks 285–6 Product profitability analysis (PPA) 150 Production processes 89, 96, 314, 437, 463 Productivity issues 380 Products: attribute costing 171–3, 435 BCG portfolio matrix 154–61 brands 52, 78, 150, 176, 285 buyer characteristics 162 competitor analysis 50 concepts 40, 42, 139, 141, 145, 162, 165, 167 customers 149–50, 150–1, 153–4, 169 development strategies 283 differentiation strategies 52, 78, 177, 275, 275, 431 earnings 149–51, 180–1 gaps 114–15 generic products 179 life cycles 49, 100, 151 new products 127, 139, 167, 183, 196, 283, 285 political risk 66–7 portfolios 154, 177, 337 risks 285–6 scenario planning 117–22 substitutes 40, 42 value engineering 172 Professional services 98, 99, 169 Profits: competitor analyses 50–6 customer analyses 158–61 economic profits 384, 419 operating profit margin 419, 423, 479 performance measurement 412, 416 sources 150, 169, 180 see also Revenues Promotions 42, 165, 169 Public sector: best practice 312 holistic needs 315 innovation 308 joint developments 314–15 management 312 objectives 24–5 seamless services 314 strategic options 312–15 strategy 25, 312–15 see also Governments Public service organisations 24 Purchasing decisions 173 Purpose, controls 434 Puxty, A.G 372 Q Quality: circles 412, 460 controls 568 customers 166, 169, 173 data 188 measures 434 total quality management 182, 366, 457 Question marks, BCG matrix 155, 156, 157 R Radical ideas 286, 367 Rank Xerox 105, 106, 107 Rappaport, A 418, 419, 423, 430, 614 Rational strategy processes: concepts 3, 273–4, 309 investment appraisals 320–1 RBT see Resource-based view Real options 321–3 Recessions 566 Recovery phase, business cycles 151 Recruitment markets, six markets model 183 Referral markets, six markets model 183 Regional economic integration 60 Regulatory bodies 288 Related and supporting industries, Porters’ Diamond 63 Relationships: data mining 186 human resources 346 marketing 423, 431 network organisations 93, 98, 99, 362 ENTERPRISE STRATEGY drawbacks 420–1 residual income 419–20 Returns: balanced scorecards 446–50 economic profits 419 opportunity costs 428 risks 21, 419 total shareholder return 429–30 Revenues: customer profitability analysis 150, 168–76 sources 149–50, 162 see also Profits Reward schemes, managers 426 RI see Residual income (RI) Rightsizing 516 IT departments 246–7 Risks: development strategies 283–4 diversification strategies 284–5 generic strategies 275 politics 66–7 returns 21 Rivalries: Five Forces Model (Porter) 38 Porter’s Diamond 63 see also Competitors ROCE see Return on investment (ROI) Rockart, J.F 19 ROI see Return on investment (ROI) Rolex 151 Rolling quarterly plans 459 Roslender, R 412 Rover 456–7 Royal Dutch Shell 118, 511 Rugman, A.M 66 S SABRE system 223 Sales: margin 417 value-based management 422–32 value chain analysis (Porter) 90–103 Sanctions 434 SAP 436 Satisfaction factors, customers 440–1 Satisficing behaviour 26 SBUs see Strategic business units (SBUs) Scapens, R 390–1 Scarlett, B 432 Scenario planning: advantages 122 INDEX six markets model 183 strategies 182–3 supply chain management 100 see also Customers Relative market shares: BCG growth-share matrix 154–5 customers 160 Reliability needs, supply chain management 100 Remedying methods, SWOT analysis 85–6 Remote controls 415–16 Remuneration issues 374 Reports 374, 416 Research and development (R&D) 47, 49, 196, 277, 419 Residual income (RI): concepts 419 definition 419 return on investment 420–1 Resistance to change 132, 504–5 Resource-based theory (RBT) see Resource-based view Resource-based view: concepts 282–3, 307–8 conflicts 309 strategy 301, 307–8 Resources 91, 92, 426, 501 allocations 434 power 374 public sector 24–5 stakeholders 5–6 strategic 307 transaction costs 95 Response profiles, competitors 55–6 Responsibilities: mission statements 10–12 objectives 17–18 organisations social issues 32 Responsibility centres 352, 353, 373, 381, 387, 436, 457 Responsiveness needs, supply chain management 100 Results and determinants framework 443 Retention, customers 182 Return on capital employed (ROCE) see Return on investment (ROI) Return on investment (ROI): balanced scorecards 446 cash flow 485 concepts 419–20 definition 419 679 INDEX 680 ENTERPRISE STRATEGY E3 Scenario planning: (Continued) concepts 117 construction methods 118–21 examples 117–18 steps 118–21 Schlitz 153 Schoemaker, P.J.H 118, 121 Scholes, K 8, 19, 20, 316, 323 Scientific management 353 Seamless services, public sector 314 Secondary activities, value chain analysis (Porter) 90–103 Secondary sources, information 69 Security issues: data management 188 e-commerce 228–9 Segmentation issues: customers 168–9, 187 environmental factors 38 Self-control 412 Sequential attention 26 Service activities: concepts 385 e-commerce 228 performance measurement 441–2 value chain analysis (alternatives) 98–9 value chain analysis (Porter) 98–9 Service production strategy 314 Shakeout stage, product life cycles 152 Shamrock organisations 369 Shank, J.K 93, 94 Shareholder value: acquisitions 300 breakthrough strategies 282 concepts 422–3 definition 422 drivers 423–4 economic profits 384, 419 evaluation 316 value-based management 422–32 Shareholder value analysis (SVA) see Value-based management (VBM) Shareholders: concepts 21–2, 339 conflicts 8–9, 23 divestments 310–12 ethics 6, 13 non-financial issues 21–2 objectives 21–2, 141 strategy evaluations 316–17 value-based management 422–32 wealth maximisation 418 see also Stakeholders Sharing: culture 254 information 252–3 knowledge 252, 254, 269, 457 systems 250 Shell 118, 119, 120, 121 Shepherd, A 94 Short-termist problems 22, 450 Side payments 26 Simple organisations 353 Simplicity benefits, strategy formulations 42 Simulations 116 Six-dimensional performance matrix 443–6 Six markets model 183 Skandia 443 Skills, multi-skilled staff 76, 412 SMART requirements, objectives 18 Social controls 412 Social issues: environmental models 32 European Union 59–60 international growth strategies 304 Internet effects 224–5 management accountants 372 organisations 352 Social media 231–3 Social networks 233–5 Software needs 441 Specialist units, environmental scanning 68 Stabell, C.B 98 Stable equilibriums 356, 358, 360 Stacey, R.D 50, 356, 359–61 Stakeholders: concepts 3–10, 454–7 conflicts 4, 8–9, 23, 309 dealing strategies 10 definitions 3–4 expectations 6, 455 Four CPs of Measurement (Neely) 416 influences 5–6 interest assessments 5–6 Mendelow matrix not-for-profit organisations 22 objectives 8–9, 11–12 performance measurement 454–7 powers 4, 5–6 scenario planning 117 six markets model 183 social responsibilities 22, 319, 372 ENTERPRISE STRATEGY formulation approaches 42, 50, 68, 87, 117, 121, 354 generic strategies 275 implementation 388 marketing 149 most promising strategies 65 product life cycles 49, 100, 452 public sector 24–5 rational processes 42, 83, 309 relationship marketing 182–3 resource-based view 282, 307–9 styles 433–4 SWOT analysis 83–7 value-based management 422 see also Business strategy Strategyϩbusiness (magazine) 294 Strengths: competitors 51 GE Business Screen Matrix 161 SWOT analysis 83–7, 137, 404 Stretch targets 458, 459 Structured query language (SQL) 186 Structured systems analysis and design methodology (SSDAM) 239 Structures 360, 366, 369, 374, 441, 459 see also Organisational structures Subscription charges, value-added: networks 223 Subsidiaries, controls 464 Substitute products 38, 207, 626 Substitutes threat 497 Suitability tests, strategy evaluations 316 Supernormal profits 307 Suppliers: business process re-engineering 362–8 e-commerce 228 Five Forces Model (Porter) 38 links 209, 221 performance measurement 456 position audits 89 power 497 six markets model 183 strategy evaluations 316 value chain analysis (Porter) 90, 93 Supply chain management: concepts 99–101 definition 99 improvements 220, 226 partnerships 93, 100, 380 stages 92, 98, 100–1 themes 100 INDEX strategy evaluations 316 types 5–6 see also Shareholders Standard costing 413, 435, 437, 460 Star organisation 246 Starbucks 66 Stars: BCG matrix 157 fund sources 316 Start-up businesses 22 Statistical analysis software package (SAS) 186 Steering committees 441 Step change 502–3 Stewart, S 426, 427, 429 Storing knowledge 255 Strategic ABM 440 Strategic alliances 120, 298–9 Strategic benchmarking 104 see also Benchmarking Strategic business units (SBUs) 154, 168 Strategic choices 273–5 Strategic controls 433 Strategic cost analysis 93, 172 Strategic implications, information technology 213–57 Strategic intent 53 see also Vision Strategic logic 319 Strategic management, public sector 312 Strategic marketing 166 Strategic milestones 17, 459–60 Strategic objectives see Objectives Strategic options: charity sector 315–16 concepts 273 evaluation tests 316–23 public sector 312–15 Strategic planning models 243 Strategic plans 145, 433 Strategic resources 308–9 Strategy: balanced scorecards 448–9 brands 176–81 competitor strategies 40 concepts 53, 425–6 data warehousing 184–6, 188 definitions divestments 310–12 emergent strategies 50 evaluations 316–23 681 INDEX 682 ENTERPRISE STRATEGY E3 Supply management 99 Support, e-commerce 228 Supranational organisations 58 Supranets 224–5 Sustainability test 317 Sustainable enterprises 31 SVA see Value-based management (VBM) SWOT analysis: benefits 84 concepts 83–4 definition 83 strategy 84, 85–6, 87 see also Corporate appraisals Systems: chaos theory 50, 356, 358–9 extraordinary management 359 shadow systems 359, 360 T Tacit knowledge 250, 252, 255, 308, 359 Taco Bell 174 Tactical decisions 319, 383 Takeovers see Mergers and acquisitions Target markets 165 Taxation 428, 461, 469, 485 Taylor, F.W 353, 368 Teams: controls 386, 412, 415–16 participating teams 355 see also Human resources (HR) Technological factors: business process re-engineering 362–8 computer-based information sources 69 environmental models 38–40 globalisation dynamics 58, 60–1, 100, 256, 389 industry life cycles 281 intellectual capital 443–4, 457 internet 224–5 performance measurement 440–1 scenario planning 118, 122 value chain analysis (Porter) 90, 97 Technological infrastructure creation 251, 268 Technology push 288–9 Telecommunications 441 Telecottages 369 Telemarketing 219 Tesco 53, 179, 220 Text mining systems 186–7 Threat of market entry 57 Threats: competitor analyses 50–6 Five Forces Model (Porter) 38 SWOT analysis 84 Three Generic Strategies Model (Porter): concepts 275 diagram 276 examples 278–9 limitations 279–82 thrift cultures 460 3M 106 Tips: examination 539 studying 539 Toffler, A 119, 355 Total quality management (TQM) 182, 366, 457 Total shareholder return (TSR) 429–30 TOWS matrix 86 TQM see Total quality management (TQM) Trade unions 4, 14, 305 Training, human resources 91, 281, 439 Transacting 254 Transaction costs 227, 463 Transactions marketing 182 Transfer prices: concepts 461, 462 diversification strategies 463–4 research evidence 461–2 taxation 461, 462 Transformational change 503 Transparency needs 100, 101, 102, 227 Trends 119 TSR see Total shareholder return (TSR) Turnkey operations 305 U Unbundling 516 Uncertainties: complexity 49, 356, 358–9 concepts 49–50, 115, 116 decision trees 115 definitions 49 emergent strategies 50 environmental issues 49 futures 115–16 impact 50, 51, 115–17 information needs 50, 393, 453 levels 115–17 probabilities 115, 121 scenario planning 119 ENTERPRISE STRATEGY 415 V VAG see Volkswagen-Audi Group Valuations, brands 181 Value-added activities 439 Value-added communication 225 Value-added networks (VANs): competitive advantage 224 subscription charges 223 Value-based management (VBM): areas covered 425–6 business strategy 430 concepts 422 definition 422 drivers 423, 424, 430, 431 examples 426–7 implementation issues 426 Value chain analysis: collaboration 92, 93, 101 concepts 90 costs 78, 85 criticisms 97, 98 data warehousing 184–6 definitions 90 evaluation 95–8 examples 94–5 linkages 92–3, 98 management accounting 93–4 network organisations 93, 98, 99, 100 organisational implications 93 professional services 95, 96 value-creating activities 90 Value creation logic 301 Value drivers 413, 423, 425 Value engineering, products 172 Value gaps 310 Value net 41 Value of knowledge 250–1 Value system, concepts 92–3 VANs see Value-added networks (VANs) VBM see Value-based management (VBM) Vendor ratings 456 Vertical integration 52, 56, 65, 158, 284, 285, 463, 464 Vertical reporting 374 Virgin 274, 275 Virtual conferencing 236–7 Virtual organisations 225, 246, 369–70 see also Network organisations Vision: balanced scorecards 446–50 Volkswagen-Audi Group (VAG) voluntary sector 315 Volvo 459 see also Strategic intent Volkswagen-Audi Group 280 INDEX Unilever 52 Unitary organisations, controls Unprofitable customers 169 280 W WACC see Weighted average cost of capital (WACC) Walkthroughs 455–6 Ward, K 56, 242, 452, 454, 464 Weaknesses: competitors 51 SWOT analysis 84 Wealth maximisation, shareholders 21 Weather forecasts 356 Web 2.0 and social networking 230–7 niche social networking 235–6 social media 231–3 social networks 233–5 virtual conferencing 236–7 Web sites 121 see also Internet Weber, M 353 Weighted average cost of capital (WACC) 483 Weightings, objectives 26 Weihrich, H 86 Welch, J 106 What-if analysis 116 Whittington, R 11, 288 Wikipedia 232 Williamson, O 462 Willmott, H 366 Wilson, R.M.S 51, 68, 153 Win-win attitudes 101 Withholding taxes 461 Wood, D.J Work processes, knowledge management 269 Workflow, knowledge sharing systems 252–4 Working capital 424, 487 World-class firms 64 World Trade Organisation (WTO) 61–3 X Xerox 106 Y Yahoo 233 YouTube 232 683 .. .CIMA Official Learning System Strategic Level E3 — Enterprise Strategy Neil Botten CIMA Publishing is an imprint of Elsevier Linacre House, Jordan Hill, Oxford... Strategic decision-making processes (D) ENTERPRISE STRATEGY E3 E3 – C Evaluation of strategic position and strategic options (30%) xxii THE CIMA LEARNING SYSTEM E3 – D Implementation of strategic... beyond valuation How to use your CIMA Learning System This E3 Enterprise Strategy Learning System has been devised as a resource for students attempting to pass their CIMA exams and provides: ● ●