The Kaplan E3 topic 1 summary describing the strategy process including what is Ecosystem, Strategy ,Factor affecting strategy ,Type of strategy, Long term planning, Strategic formulation and how Management accountants are involved in this whole process
1- Ecosystem
Customer
Relationship with
Supplier
Nature
Distributor
Either Competitors
Cooperative Competitive Government
Agencies
Business must be
Flexible Adaptable
2- Strategy
Setting future plans
Is course of action
understanding
Strategy
With specific Resources Or
00 Resources
With specific Objective Cash/Assets etc
Eco system
Environment
Stakeholder
Any person connected with
organization
Factor affecting strategic decision
Setting organization Boundaries
Scope
What organization wants to be
Eco system Matching the environment
Resource capability Matching organization resource with threat and
opportunities
Resource availability Resources for future strategy
, Advantages and Disadvantages for Long Term Planning
Advantages Disadvantage
a) Forces managers to look ahead Setting Corporate objective
Contrary needs of shareholders
b) Improved control through mission and Vision Short term pressure
a. By Setting objectives Short term focus consumes lot of time
b. And reviewing the action taken No time available for long term focus
c) Key Risk identification Difficulties in forecasting
No accurate forecast for fast moving industries
d) Encourage creativity through Bounded Rationality
a. Innovative way to solve problem Or Incomplete external and internal analysis
b. Ability to innovate Leading to
Ineffective strategies based on incomplete
analysis
Rigidity
Rigidly following the plan
Cost
Planning process is costly
Managing Distrust
Mistrust in forecasting and modelling techniques
by
Managers
and
Academics
Levels of strategy
Acquisitions
Corporate Disposal /Divestment/Diversification
(Strategic Level) Entering New Market
Leaving current market
Finding advantage over competition
Business level
Avoiding competitive disadvantage
(Management level)
Meeting the needs of current customers
HRM Strategy
Functional Marketing Strategy
(Operational) Information security
Operational strategy
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