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ACCA Paper P3 Business Analysis

Course slides
For exams in June 2010

Syllabus
A B C D E F G H I Strategic position Strategic choices Strategic action Business process change Information technology Quality issues Project management Financial analysis People

Slide 2

Examiner & format of the exam


Examiner: Steve Skidmore Format of the Exam Section A Compulsory case study; in several parts (Can be based on any area of the syllabus; not limited to Sections A-C) Section B Total Choose two out of three questions marks each) (25 50 100 Marks 50

Three hour exam + 15 minutes reading time


Slide 3

The June 2009 exam


Topics examined in the June 2009 exam
Question 1 SWOT analysis; strategy evaluation and choice; process deficiencies and recommendations to rectify Reasons for success/failure; leadership styles; franchising Using financial information; implications of failing to follow proper evaluating procedures Management reward schemes; DMAIC methodology

Question 2 Question 3 Question 4

The December 2008 exam


Topics examined in the December 2008 exam
Question 1 Question 2 Question 3 Question 4 Environmental analysis (PESTEL); organisational culture; strategic lenses Rationales for acquisitions, appropriateness of a proposed acquisition Software testing; project management and dealing with slippage Reward management schemes assessing deficiencies and limitations in proposed schemes

The December 2008 exam is included as Mock Exam 3 in the 2009 BPP Learning Media Practice and Revision kit

The June 2008 exam

Topics examined in the June 2008 exam


Question 1 Question 2 Question 3 Question 4 Environmental analysis; strategic choices; reward management Business process change and outsourcing E-marketing and its impact on the extended marketing mix Strategic change and the organizational context of change

The December 2007 exam

Topics examined in the December 2007 exam


Question 1 Question 2 Question 3 Question 4 Corporate appraisal; evaluation of strategic options Project management Value chains and supply chain analysis Quality issues and Six Sigma

Slide 7

The BPP Learning Media classroom slides


What do these slides cover?
A selection of key areas of the syllabus

Using the slides

Use the slides as a point of reference Add detail by talking around the slides (eg using material from the corresponding Study Text chapter) Consider adding slides yourself to suit your course Recommend students attempt appropriate questions from the Practice & Revision Kit

Slide 8

Chapter 1

Study Text Chapter 1

Business strategy

What is P3 about?

Slide 10

Mission and objectives

Vision Mission Goals and objectives


Slide 11

Objective setting
Mission
Corporate Business Operational Individual

Vertical consistency

Time consistency

Horizontal consistency
Slide 12

The Rational Model Action


POSITION AUDIT STRATEGIC CONTROL

MISSION & CORPORATE STRATEGIC OBJECTIVES APPRAISAL OPTIONS

STRATEGIC CHOICE

STRATEGIC IMPLEMENT

ENVIRONMENT ANALYSIS

Slide 13

Positio n

Choic e

Strategy lenses

Examined 12/08

Ideas

Design

Experience

Mintzbergs Emergent strategies


Deliberate strategy

Intended strategy

Realised strategy

Unrealised strategy

Emergent strategy

Slide 15

Chapter 2

Study Text Chapter 2

Environmental issues

The Environment P Competition E Supply Chain Firm Market S


Slide 17

Examined 12/08

L E

International environment & drivers for change


Global Market Convergence

Government Influences

Global Strategies

Cost Advantages

Global Competition
Slide 18

Porters Diamond

Firm strategy, Structure and Rivalry

Factor conditions

Demand conditions

Related and supporting industries

Slide 19

Porters 5 Forces
Potential entrants

Examined 6/08

Suppliers

Competition and rivalry

Buyers

Substitutes

Slide 20

Question practice end of Chapter 2


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q1

Q3

Q5

Slide 21

Chapter 3

Study Text Chapter 3

Competitors and customers

Marketing Concept
-Establish needs (mkt research) - Develop appropriate product (R&D) Stress ability of product to satisfy Profit through customer

Feedback
Slide 23

Marketing mix
Product Price Place Promotion

Examined 6/08

4 Ps

People Processes Physical evidence


Slide 24

Market segmentation
Segmentation

Targeting

Positioning

Slide 25

Market targeting
Undifferentiated
4 Ps Firm

Market

Slide 26

Market targeting
Differentiated

4 Ps 4 Ps 4 Ps

Market

Firm

Market

Market

Slide 27

Market targeting
Concentrated
4 Ps

Market

Firm

Market

Market

Slide 28

Product Positioning
High price
Cowboy brands Premium brands

Low quality
Economy brands Bargain brands

High quality

Low price
Slide 29

Customer profitability analysis (CPA)


Customer A No of Tubes Revenue (after discount) Transport Admin Profit Margin
Slide 30

Customer B 200,000

6,500 @ 21.25 10,000@ 20 138,125 (22,750) (2,600) 112,775 81.6% (2,000) 198,000 99.0%

Question practice end of Chapter 3


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q9

Q10

Q11

Slide 31

Chapter 4

Study Text Chapter 4

Strategic capability

Organisations resources
Ms model Machinery Make-up Management Management information Markets
Slide 33

Materials Men and women Methods Money

Qualities of strategic capabilities


Valuable to buyer (customer) Rarity Robustness (difficult for competitors to imitate) Non-substitutability

Slide 34

What is knowledge?

Data Information Knowledge

Sales Day Book

Sales Ledger

Key contact

Slide 35

Knowledge management
Intuition / experiment Learning organisation Tacit Knowledge Shared socialisation Conflicting views

Explicit Externalisation

Slide 36

Value Chain
Support Activities
Firm Infrastructure Technology Development Human Resource Management Procurement Inbound Operations Outbound Logistics Logistics Marketing & Sales

Examined 12/07

Support Activities

Service

Primary Activities
Slide 37

Primary Activities

Product Life Cycle


$

Examined 6/08

Intro

Growth

Mature

Decline

+ ve 0 - ve

Sales

Time

Profit; cashflow

Slide 38

SWOT Analysis

Examined 12/07; 06/09

INTERNAL : RELATIVE TO COMPETITION STRENGTHS WEAKNESSES

OPPORTUNITIES

THREATS

EXTERNAL: PRESENT TO ALL INDUSTRY MEMBERS


Slide 39

TOWS Approach
STRENGTHS OPPS SO Strategies WEAKNESSES WO Strategies

THREATS

ST Strategies

WT Strategies

Slide 40

Question practice end of Chapter 4


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q2

Q4

Q12

Q13 (a)

Slide 41

Chapter 5

Study Text Chapter 5

Stakeholders, ethics and culture

Stakeholders
Internal Connected External

Slide 43

Mendelows Matrix
Low Low Minimal Effort Keep Informed

Interest

High

Power
High Keep Satisfied Key Players

Slide 44

Governance systems
Anglo-Saxon model Rhine model Latin model Japanese model

Slide 45

Classification of organisational cultures


Power culture Role culture Task culture Existential culture
Slide 46

Cultural web
Symbols & Titles Myths & stories

Examined 12/08

Organisational Assumptions (The Paradigm)

Power relations

Rituals & routines Control systems


Slide 47

Orgn structure

Culture, the environment and strategy

Slide 48

Question practice end of Chapter 5


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q6

Q7

The cultural web was examined in Part (b) of Question 1 from the 12/08 exam, which forms Mock Exam 3 in the Kit

Slide 49

Chapter 6

Study Text Chapter 6

Strategic options

Globalisation and international diversification 5 Stages of evolution: Exporting Overseas branches Overseas production Insideration (polycentric) Global company (geocentric)
Slide 51

Ohmae - 5 Cs
5 reasons for going global: Customer Company Competition Currency Country
Slide 52

Market selection

Source: Kotler
Slide 53

Corporate Parent
3 value-creating roles: Envisioning corporate intent

Examined 12/08

Intervention to improve performance Provision of services, resources and expertise


Portfolio managers
Slide 54

Synergy managers

Parental developers

Portfolio Analysis- BCG Matrix


High

Examined 12/08

Relative Market Share


Question Mark or Problem Child

Low

Market or Industry Growth Rate

High

Star

Slide 55

Low

Cash Cow

Dog

Reaching objectives
Where are we now? Where do we want to be?

ABC Ltd

ABC Ltd

2007 $10 m
Slide 56

2012

$50 m

Strategic Options steps to follow

Generic strategies

Strategic direction

Methods of growth

Slide 57

Strategic Options step 1

Generic strategies Direction of growth

Methods of growth
Slide 58

Porters Generic Strategies

Examined 12/07

High Price Low Price Low Price High Profit Low Profit High Profit

Low Cost

High Cost

High Cost

Cost leader
Slide 59

Stuck in middle

Differentiator

Basis of Competitive Advantage


COMPETITIVE BASIS Low cost Broad Cost Leadership Differentiate Differentiation

SCOPE Cost Focus Differentiation Focus

Narrow
Slide 60

Strategy Clock

Examined 12/07

Slide 61

Strategic Options step 2

Basis of competition

Direction of growth

Methods of growth

Slide 62

Ansoffs Matrix

Present Present

PRODUCT

New Product Development Diversification Related Unrelated

Withdrawal Consolidation Penetration Market Development

MARKET

New

Slide 63

Diversification
Backward vertical

Examined 12/08

Conglomerates

Firm

Horizontal

Forward vertical

Slide 64

Strategic Options step 3

Basis of competition

Direction of growth

Methods of growth
Slide 65

Acquisition
A plc B plc

A plc

Slide 66

Merger
B plc A plc

AB plc

Slide 67

Other strategies
Withdrawal
but consider exit barriers?

Examined 6/08

Divestment Demerger Privatisation

Slide 68

Evaluating Strategic Options


Suitability Acceptability Feasibility

Examined 6/09

Slide 69

Question practice end of Chapter 6


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q14 Q37(b)

Q19 Q39(a)

Q20

Slide 70

Chapter 7

Study Text Chapter 7

Organising for success

Types of structure
7 basic structural types:
Functional Multi-divisional Holding company Matrix Transnational Team Project
Slide 72

Matrix structure

Slide 73

Types of control process


Input Direct Supervision Planning processes Indirect Output Performance targets Balanced scorecard

Cultural processes Internal markets Self-control

Slide 74

Balanced scorecard - financial


Financial perspective Goals
Survive Succeed Prosper
Slide 75

Measures
Cash flow Sales growth Increase EPS/dividends

Balanced scorecard- customer


Customer perspective Goals
Preferred supplier Fastest supplier Low bad debts
Slide 76

Measures
Customer rating Orders delivered on time % provision of sales ledger

Balanced scorecard innovation & learning


Innovation & learning perspective Goals
Excellence Market leader Time to market
Slide 77

Measures
Rework/reject rates Product rating v competitors Time taken from R&D to sales

Balanced scorecard internal Internal business perspective Goals


New technology Staff competence Technology transfer
Slide 78

Measures
No. of patents registered No. of training courses attended Inter-company learning rates

Value system and networks

Examined 12/07

Customer

Supplier

Company

Distributor
CRM Customer

Supply chain mgmt

Slide 79

Virtual Organisations
Specialist Services Core Company (Management, Key employees) Links to suppliers

Links to customers

Specialist Services
Slide 80

Organisational configuration
Strategic Apex
Strategy

Control

Techno Structure

Tactics

Middle Line

Support Staff

Operating Core
Operations
Slide 81

Question practice end of Chapter 7


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q13

Q18 (a)

Slide 82

Chapter 8

Study Text Chapter 8

Business processes

Process improvement projects


Improvement

Improvement

Redesign

Reengineering

Slide 84

ERP Systems

Manufacturing

Accounting

Supplier s

ENTREPRISE SYSTEM HR Sales and Marketing Finance


Customers

Slide 85

Value Chain
Firm Infrastructure Technology Development Human Resource Management Procurement Inbound Operations Outbound Logistics Logistics Marketing & Sales Service

Support Activities

Primary Activities
Slide 86

Processes and value chain


EIS, Groupware, Teleworking, Intranets CAD, CIM, Simulations, Prototyping CBT, Expert systems, Computerised payroll EDI, Extranets, JIT procurement JIT; MRPII; DSS; MRP II; Robots GPS; Route planning; Sales order processing Websites & Tracking e-commerce Diagnostics Interactive screens

Slide 87

Process-strategy matrix
Low High Outsource
Complexity Strategic importance

Examined 6/08

High

Improve

Automate/ Low outsource

Automate

Slide 88

Process redesign methodology


Problem Identification Transition Initial Feasibility

Development

Planning

Redesign
Slide 89

Analysis

Question practice end of Chapter 8


You should now be able to attempt the following key question from the BPP Learning Media Practice and Revision Kit:

Q12 (a)

Q21

Q22

Slide 90

Chapter 9

Study Text Chapter 9

Improving processes

Process redesign
4 basic redesign patterns (Harmon): Re-engineering Simplification Value-added analysis Gaps and disconnects

Slide 92

Establishing software requirements


7 techniques for fact gathering:
Interviews Questionnaires Written questions Observation Protocol analysis Workshops Prototyping

Slide 93

Question practice end of Chapter 9


You should now be able to attempt the following key question from the BPP Learning Media Practice and Revision Kit:

Q17

Slide 94

Chapter 10

Study Text Chapter 10

E-business

Benefits of e-business
Cost reduction Capability Communication Control Customer service Competitive advantage

Slide 96

Adopting e-business
Mature capability
e-HR Web-conferencing e-collaboration e-invoicing e-procurement Document management Web portals Company intranet Email, Internet, company website, remote working

Initial capability
Slide 97

Varieties of e-commerce
Delivery by
Business Consumer

Exchange initiated by

Business

B2B

B2C eg Amazon.com

C2B
Consumer

C2C eg eBay.com

eg Priceline.com

Slide 98

Market place channel structures

Direct
Business

Intermediaries
Disintermediation Reintermediation

Customer

Countermediation

Slide 99

Supply chain management

Examined 12/07

Capacity, inventory levels, delivery schedules, payment terms


Supplier Manufacturer Distributor Outlet Customer

Orders, return requests Repair and service requests, payments

Slide 100

Strategy for e-commerce


Suitability Acceptability Feasibility

Slide 101

Question practice end of Chapter 10


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q23

Q24

Slide 102

Chapter 11

Study Text Chapter 11

E-marketing

Marketing strategy
Objectives Situation analysis Strategies

E- marketing
Control Actions
Slide 104

Tactics

6 Is
Intelligence Independence

Examined 6/08

Individualisation

E-marketing
Industry Integration
Slide 105

Interactivity

7 Ps
Price Product
(customer value) (customer cost)

Examined 6/08

Promotion
(customer communication)

E-marketing
Place
(customer convenience)

Processes

People
Slide 106

Physical evidence

CRM

Acquisition

Retention

Extension

Slide 107

CRM Systems
Unified view Consistent message Long-term relationships

Sales Phone Web Retail

Marketing Campaigns Data analysis

Service Call centre Web self-service info Field Service data

Slide 108

CRM software
Sales automation

Management reporting

E-marketing

Service management

Marketing automation
Slide 109

Question practice end of Chapter 11


You should now be able to attempt the following key question from the BPP Learning Media Practice and Revision Kit:

Q28

Slide 110

Chapter 12

Study Text Chapter 12

Quality

Terminology
Quality Quality management system Quality control Quality assurance
Slide 112

Examined 12/07

Quality in IS
Functionality Reliability Usability Build (flexibility, portability, ease of maintenance)
Slide 113

V model
Acceptance test plan Spec & Design System test plan Integration test plan Test cases Code
Slide 114

Examined 12/08

Testing

CMMI five levels


5. Optimisation 4. Consistent management 3. Define standard processes 2. Repeatable success 1. Initial capability
Slide 115

Six Sigma
Concepts

Examined 12/07

Organisation

6 Sigma

DMAIC

Quality tools
Slide 116

Question practice end of Chapter 12


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q25

Q26

Q27

Slide 117

Chapter 13

Study Text Chapter 13

Project management

Project management

Examined 12/07

Resources

Time

Risk

Slide 119

The Project Lifecycle


4 stage project lifecycle (Maylor)
Project Definition Project Design

Examined 12/07

Project delivery

Project development

Slide 120

The Project Lifecycle


R e s o u r c e s Planning Initiation Control Executiong Completion

Time
Slide 121

The Project Lifecycles differ..

Planning
R e s o u r c e s

Initiation

Control Completion Execution

Time
Slide 122

Gantt Charts

Act y ivit
Slide 123

Order com

Critical path analysis


C 2 D 6 E 14

2 3 3 3

5 5

5 11 11

6 25 25 7 F

1 0 0 B 3 3 3 5 32 day project that only has buffer time in activity B

7 32 32

Slide 124

Dealing with slippage


Add resources
- Potential impact on cost?

Examined 12/08

Work smarter Reschedule in full or in part Change scope / specification


- Potential impact on quality?

Introduce incentives
Slide 125

Question practice end of Chapter 13


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q18 (b)

Q30

Q31

Slide 126

Chapter 14

Study Text Chapter 14

Finance

Finance and strategy


Managing for value

Finance Shareholder expectations


Slide 128

Funding

Financial analysis and strategy


Mission

Implementation

Financial analysis

Strategic analysis

Strategic Choice
Slide 129

Financial analysis - ratios


Profitability Liquidity Gearing Shareholders investment

Slide 130

Chapter 15

Study Text Chapter 15

Leadership, performance and reward

Leadership

If you want to know if you are a leaderlook behind you. If there is no one there you are not a leader. Anon
Slide 132

Strategic HRM

Human Resource Planning

Recruitment & Selection

Performance Management & Development

HR Environment

Slide 133

Human Resource Planning


Supply Heads Skills Age Aspirations Experience Natural Wastage
Slide 134

Demand New skills New attitude Growth/contraction New Technology STRATEGY

The HR cycle

Examined 6/08

HR Devt

Selection

Performance

Appraisal

Rewards

Slide 135

Reward management
Reward objectives
Recruitment & retention Motivation Compliance with rules and expectations

Examined 12/08; 06/09

Reward options
Base pay Performance pay Indirect pay

Slide 136

Question practice end of Chapter 15


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q34

Q35

Q47(c)

Slide 137

Chapter 16

Study Text Chapter 16

Job design and staff development

The HR cycle
HR Devt

Selection

Performance

Appraisal

Rewards

Slide 139

Job design
4 approaches: Scientific management Job enrichment Japanese model Re-engineering

Slide 140

Human resource development (HRD)


Training = an investment in strategic capability Competitive advantage through upgraded skills Employee loyalty Contribution to success of strategy and operations

Slide 141

Chapter 17

Study Text Chapter 17

Managing strategic change

Types of change
Scope of change
Realignment Incremental Transformation

Examined 6/08

of change

Nature

Adaptation

Evolution

Big bang

Reconstruction

Revolution

Slide 143

Context of change
Time Power
Scope & Scope & & Scope of Nature of Nature nature of change change change Preservation

Examined 6/08

Change programme

Readiness

Diversity

Capacity

Capability

Slide 144

Force field Analysis Lewin


Driving Forces

Current State

Restraining Forces

Ideal State

Need to improve Greater Motivation Improved Quality Running costs


Slide 145

Sufficient Trade Union Divisive Complexity

Overcoming resistance
Consider: Pace Manner Scope

Communication Consultation Counselling

Slide 146

Styles of change management


Education and communication Collaboration / participation Intervention Direction Coercion / edict
Slide 147

Incremental

Transformational

Approaches to strategic leadership Strategy Change

Examined 6/09

Human assets

Control

Expertise

Slide 148

Change management levers


Challenging the paradigm Changing routines Use of symbolic processes Political activity and use of power structures Communication and monitoring Tactics (exploration of quick wins; care over announcing bad news)

Slide 149

Question practice end of Chapter 17


You should now be able to attempt the following key questions from the BPP Learning Media Practice and Revision Kit:

Q32

Q33

Q36

Q38 (c)

Slide 150

Chapter 18

Study Text Chapter 18

Strategic development

Intention, emergence and realisation

Emergent strategy

Slide 152

Intended

Uncertainty and complexity


Environmental conditions
Static Simple Complex

Historical analysis and forecasting

Decentralisation and specialisation

Scenario planning Logical incrementalism Learning organisation


Dynamic
Slide 153

Decentralisation Specialisation Experience Learning

Bringing it all together

Slide 154

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