Beruflich Dokumente
Kultur Dokumente
ACCA Paper P3
Business Analysis
For exams in 2015
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Contents
Page | 2
1.
2.
10
3.
16
4.
19
5.
Strategic choice
22
6.
Strategic action
29
7.
Information technology
33
8.
Project management
38
9.
41
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
START
About ExPress Notes
We are very pleased that you have downloaded a copy of our ExPress notes for this paper.
We expect that you are keen to get on with the job in hand, so we will keep the introduction
brief.
First, we would like to draw your attention to the terms and conditions of usage. Its a
condition of printing these notes that you agree to the terms and conditions of usage.
These are available to view at www.theexpgroup.com. Essentially, we want to help people
get through their exams. If you are a student for the ACCA exams and you are using these
notes for yourself only, you will have no problems complying with our fair use policy.
You will however need to get our written permission in advance if you want to use these
notes as part of a training programme that you are delivering.
WARNING! These notes are not designed to cover everything in the syllabus!
They are designed to help you assimilate and understand the most important areas for the
exam as quickly as possible. If you study from these notes only, you will not have covered
everything that is in the ACCA syllabus and study guide for this paper.
Components of an effective study system
On ExP classroom courses, we provide people with the following learning materials:
ExP classroom course students will also have access to various online support materials,
including:
The unique ExP & Me e-portal, which amongst other things allows view again of
the classroom course that was actually attended.
ExPand, our online learning tool and questions and answers database
Everybody in the World has free access to ACCAs own database of past exam questions,
answers, syllabus, study guide and examiners commentaries on past sittings. This can be
Page | 3
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
an invaluable resource. You can find links to the most useful pages of the ACCA database
that are relevant to your study on ExPand at www.theexpgroup.com.
These ExPress
notes
ExP
recommended
course notes, or
ExPedite notes
ExP
recommended
exam kit
ACCA online
past exams
Prior to
study, e.g.
deciding which
optional papers
to take
Skim through
the ExPress notes
to get a feel for
whats in the
syllabus, the
size of the paper
and how much it
appeals to you.
Have a quick
look at the two
most recent real
ACCA exam
papers to get a
feel for
examiners style.
At the start of
the learning
phase
Work through
each chapter of
the ExPress notes
in detail before
you then work
through your
course notes.
Work through in
detail. Review
each chapter after
class at least once.
Nobody passes an
exam by what they
have studied we
pass exams by
being efficient in
being able to prove
what we know. In
other words, you
need to have
effectively input the
knowledge and be
effective in the
output of what you
know. Exam
practice is key to
this.
Dont use at
this stage.
Page | 4
Try to do at least
one past exam
question on the
learning phase for
each major chapter.
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Page | 5
Your stage in
study for each
paper
These ExPress
notes
ExP
recommended
course notes, or
ExPedite notes
ExP
recommended
exam kit
ACCA online
past exams
Practice phase
Work through
the ExPress notes
again, this time
annotating to
explain bits that
you think are easy
and be brave
enough to cross
out the bits that
you are confident
youll remember
without reviewing
them.
Avoid reading
through your
notes again. Try
to focus on doing
past exam
questions first and
then go back to
your course notes/
ExPress notes if
theres something
in an answer that
you dont
understand.
Download the
two most recent
real exam
questions and
answers.
The night
before the real
exam
Read through
the ExPress
notes in full.
Highlight the bits
that you think are
important but you
think you are most
likely to forget.
Do a final review
of the two most
recent
examiners
reports for the
paper you will be
taking tomorrow.
At the door of
the exam room
before you go
in.
Read quickly
through the full
set of ExPress
notes, focusing on
areas youve
highlighted, key
workings,
approaches to
exam questions,
etc.
Avoid looking at
them in detail,
especially if the
notes are very big.
It will scare you.
Leave at home.
Leave at home.
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Notes
Notes
Provide a base
understanding of
the most important
areas of the
syllabus only.
Provide a
comprehensive
coverage of the
syllabus and
accompany our
face to face
professional exam
courses
Notes
Provide detailed
coverage of
particular technical
areas and are used
on our Professional
Development and
Executive
Programmes.
START
About The ExP Group
Born with a desire to be the leading supplier of business training services, the ExP Group
delivers courses through either one of its permanent centres or onsite at a variety of
locations around the world. Our clients range from multinational household corporate
names, through local companies to individuals furthering themselves through studying for
one of the various professional exams or professional development courses.
As well as courses for ACCA and other professional qualifications, our portfolio of
expertise covers all areas of financial training ranging from introductory financial awareness
courses for non-financial staff to high level corporate finance and banking courses for senior
executives.
Our expert team has worked with many different audiences around the world ranging from
graduate recruits through to senior board level positions.
Full details about us can be found at www.theexpgroup.com and for any specific enquiries
please contact us at info@theexpgroup.com.
Page | 6
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Chapter 1
START
The Big Picture
This chapter provides us with a number of key definitions as well as an introduction to some
of the main strategic models.
KEY KNOWLEDGE
Definitions & strategic models
Key definitions:
Strategy: Various definitions are present but a straightforward view is Strategy is a plan of
action designed to achieve a particular goal
Strategic planning: An organisations process for ascertaining the strategy it should adopt,
taking into account what they want to do, how they are going to do it and what resources
they will need. Strategic planning covers where the organisation is planning on going,
Page | 7
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
impacts on the whole organisation and involves the long term view. Note the distinction in
what is meant by long term (for example the long term is different when comparing the
airline industry with the fashion industry.)
Strategy Hierarchy:
Corporate
Business
Functional
It is important that the strategies support each other. For example, if the Business Strategy
of a SBU revolves around providing high quality consultancy advice on certain areas, a
functional strategy for HRM of minimising labour costs would cause problems.
Different strategic models:
1. Johnson, Scholes and Whittington (JSW): The Rational Model which shows the strategic
planning process in 3 categories of analysis choice implementation.
2. Mintzbergs Emergent strategy: Very few strategies will result in outcomes exactly as
planned. Instead, strategy will emerge and develop over time as the strategy evolves. It
will result in intended, realised and emergent strategies.
3. Lindbloms incrementalism: Supports the view that strategy delivery should be based on
small (incremental) changes over time rather than a limited number of extensive planned
strategies.
4. Freewheeling opportunism: No planned strategy approach. Grab opportunities as and
when they are identified.
5. JSW strategic lenses: design - experience - ideas
Strategic planners should look at strategy through all 3 lenses.
Page | 8
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Analysis
Choice
Implementaion
Strategy as design
Strategy is a process of design with logical thought out processes
(in effect, a rational model).
Strategy as experience
Strategy develops based on previous experiences (in effect, an
emergent strategy).
Strategy as ideas
Strategy comes from within the organisation as opposed to the
senior management. Ideas are created at all levels of an
organisation.
Page | 9
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Chapter 2
START
The Big Picture
In order to design suitable strategic plans, an organisation needs to be aware of the
external issues facing it. It cannot plan in isolation. This chapter looks at a number of
methods of reviewing the environment surrounding an organisation. This area is examined
on a regular basis.
KEY KNOWLEDGE
PESTEL (or PEST or SLEPT) Analysis
An analysis of the external macro environment. The organisation is unlikely to be able to
influence these factors but it should have an awareness of the issues.
Political - global, national and local changes and trends. Taxation policies. Relationships
between certain countries.
Economic - global, regional and local issues. Exchange rates. Link to topical issues such as
global recession, current interest rates for funding.
Social - changes in behaviour and expectations in society. Demographics, lifestyle.
Page | 10
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Porters Diamond
This is a model outlining the theory why certain industries are competitive in particular
locations.
There are 4 broad factors within the diamond.
Factor
Conditions
Firm Strategy
& Structure
Demand
Conditions
Related &
Supporting
Factor conditions include physical resources, human resources and specialised resources.
Demand conditions. A country with sophisticated home buyers who demand quality,
advanced and innovative products can create international competitiveness
Related and supporting industries can produce inputs for a company which feed into the
success of the business.
Firm strategy, structure and rivalry. Competition in the home market drives innovation and
quality. Protectionism can weaken a market.
Page | 11
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Quantitative Techniques
In addition to the qualitative methods of forecasting mentioned above, there are
quantitative techniques where businesses attempt to quantify these forecasts.
Techniques include:
1. Linear regression
This can be used to make forecasts whenever a linear relationship is assumed or predicted.
It models the dependence of one variable (e.g. costs) on one or more explanatory variables
(e.g. output).
2. Time Series Analysis
This involves analysing historical data to make forecasts about the future. The relationship
doesnt have to be linear and can for example take account of seasonality.
KEY KNOWLEDGE
Porters 5 Forces
This model examines the role of 5 forces close to an organisation that impact on its ability to
make a profit and hence how attractive a particular market or industry is.
There are 5 forces as follows:
1. Threat of substitute products
If there are similar products, a customer will be more likely to switch rather than stay with a
product when there are price rises (elastic demand).
2. Competitive rivalry
The rivalry will depend on the number and strength of competitors, economies of scale and
exit barriers.
Page | 12
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Entrants
Suppliers
Competition
Customers
Substitute
Page | 13
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Product life cycle
The conditions in which a product is sold change over its life.
Introduction
Growth
Maturity
Decline
Page | 14
Growth
Maturity
Decline
Product
Potentially
unique product.
Quality still
being tested.
New entrants
arrive.
Design
improvements.
Products start to
become similar
with few
differences.
Product may
have minor
enhancements
to try to extend
the tail of the
lifecycle.
Price
Could be high
for skim
pricing or low
for penetration
pricing.
Price can be
maintained but
pressure on
pricing arising
due to increased
competition
Possibly reduced
prices due to
increased
competition.
Possible further
reductions to
stimulate sales.
Place
Limited,
specialist
locations.
Distribution
channels
increase as
demand rises.
Widespread
distribution
channels.
Reduced number
of distribution
channels.
Promotion
Aimed at the
early adopters.
Expands to the
larger market.
Focus on any
differentiating
products.
Limited amount
of promotion.
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Strategic groups
A strategic group comprises companies within an industry that have similar characteristics or
business models. For example, the courier industry can be divided into different strategic
groups such as the global courier companies (e.g. DHL, FedEx, TNT and UPS) and national
courier companies based on variables such as size, geography served and strategic
approach.
An analysis of strategic groups is useful as it helps to identify competitors and how they
compete as well as identifying potential opportunities.
Page | 15
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Chapter 3
START
The Big Picture
Paper P3 is not a marketing exam but you need to have an understanding of the
fundamental principles behind marketing and how they impact on the strategic process.
KEY KNOWLEDGE
Market segmentation
A market segment is a group of customers that share similar characteristics and as a result
have similar needs. Ideally, a market segment should have the following:
Methods of segmentation
Page | 16
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
There are numerous methods. Two of the most common ones are:
KEY KNOWLEDGE
Marketing mix
The 'marketing mix' is a set of controllable marketing tools that organisations can use to
achieve its marketing objectives. It is commonly known as the 4Ps.
Product
Features
Size, colour, components
Brand
Packaging
Accessories
Price
Place
Promotion
Selling strategy
Sales promotion
Advertising
Distribution channels
Geographic coverage
Warehousing and inventory levels
Transportation
The service marketing mix (extended marketing mix) refers to the 7Ps. Namely, the 4Ps
model plus:
People
Customers
Employees recruitment and training
Management
Processes
Physical evidence
Page | 17
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Critical success factors (CSF)
Within any organisation there are certain factors that will be critical to the success of that
organisation. If the organisation fails to achieve the objectives associated with these
particular factors the organisation will fail.
CSFs will vary from industry to industry. An example of a CSF for an online food delivery
company would be prompt and accurate home delivery.
Key Performance Indicators (KPIs) measure the performance of the CSFs.
Support
KEY KNOWLEDGE
Porters value chain
Support
Activities
Firm Infrastructure
Human Resource Management
Technological Development
Service
Marketing
& Sales
Outbound
Logistics
Operations
Inbound
Logistics
Primary
Procurement
Primary Activities
The value chain was introduced by Porter and represents an approach to looking at the
development of competitive advantage within an organisation. All organisations consist of
activities which link together to develop the value of a business. Together these activities
represent the value chain.
The value chain represents a series of activities that both create and build value. Combined
they represent the total value delivered by an organisation. The margin in the diagram is
the added value (the difference between the total value of the activities and the cost of
performing them).
Primary activities: related with production. Support activities: provide the background
for the effectiveness of the organisation (e.g. HRM)
Page | 18
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Chapter 4
START
The Big Picture
This chapter looks at how organisations utilise resources and competencies to develop
competitive advantage.
KEY KNOWLEDGE
SWOT analysis
Page | 19
Strengths (internal)
Weaknesses (internal)
Opportunities (external)
Threats
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Threshold resources and competencies: These are the minimum required by an organisation
to meet customers minimum requirements. In effect, this is what is required to stay in
business.
Core competencies: These are processes and activities undertaken by an organisation which
are seen as being central to their success. Core competencies are capabilities which are
critical to a business achieving competitive advantage.
They provide customer benefits and are difficult for competitors to imitate.
A core competency can take many forms such as technical knowhow or customer
relationships.
Amazon.com has a number of core competencies such as reliable and efficient online
ordering and delivery system.
KEY KNOWLEDGE
Stakeholder mapping
Stakeholders are individuals, groups or organisations that can impact or be impacted by, an
organisation.
Mendelows Matrix allocates stakeholders into quadrants according to their level of power
and how likely they are to exercise that power (i.e. their interest).
Low
Stakeholder Interest
High
High
Keep satisfied
Key players
Minimum effort
Keep informed
Stakeholder
Power
Low
Low
Page | 20
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
High
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Culture
The Cultural Web (Johnson) provides an approach for analysing or influencing an
organisations culture.
There are 6 inter-related elements which together help to create the paradigm (pattern) of
the work environment.
Stories
Power
Structures
Rituals
The
Paradigm
Control
Systems
Symbols
Organ.
Structures
1. Stories and myths The previous events and people talked about. Creates a message
about what is valued.
2. Rituals and Routines The daily behaviour of people within the organisation that signals
what is acceptable.
3. Symbols Logos and design, dress codes.
4. Organisational Structure Both the formal and informal reporting structures.
5. Control Systems Processes in place to control the organisation.
6. Power Structures who makes the decisions, who influences the strategic direction?
Corporate Social Responsibility (CSR) refers to the organisations duty to look after all
of its stakeholders as opposed to just the shareholders.
Traditionally, CSR was often seen as a burden on a company but now it is often seen as a
source of opportunity (e.g. improvement in a companys reputation).
CSR often involves a Stakeholder Needs Analysis whereby organisations identify their key
stakeholders and what their needs are.
Page | 21
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Chapter 5
Strategic Choice
START
The Big Picture
This chapter covers a number of important issues. The focus is on the choices available to
an organisation as well as methods for making appropriate decisions.
KEY KNOWLEDGE
Parenting style theory (Gould & Campbell)
This is a framework for the role of the corporate headquarters and how it gets involved in
the strategic development of the businesses within the group.
They identified 3 styles which companies tend to follow:
Financial Control
Head office sets financial
targets but limited role in
setting strategy of SBU.
Page | 22
Strategic Control
A middle ground between
financial control and strategic
planning. Head office coordinates and reviews
strategy.
Strategic Planning
Head office plays a central
role in setting the strategy of
the SBU.
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Boston Consulting Group (BCG) Matrix
This matrix helps organisations analyse their product lines or business units. It helps
identifies priorities and where resources should be allocated.
Items are allocated to the various quadrants according to how attractive the market is
(measured as the growth rate) and how strong a position they hold within the market (their
market share)
Growth Rate
Market Share
High
Low
High
Stars
Question Marks
Low
Cash Cows
Dogs
Business Position
An organisations SBUs are entered onto the matrix based on industry attractiveness and
business strength. The appropriate action for each segment is shown in the table below.
High
Selective
Investment
Invest / Grow
Invest / Grow
Medium
Harvest / Divest
Selective
Investment
Invest / Grow
Low
Harvest / Divest
Harvest / Divest
Selective
Investment
Low
Medium
High
Industry Attractiveness
Page | 23
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Business strength determined by for example, financial position, competencies and supplier
relationships.
Industry attractiveness determined by for example, competitors within the industry, growth
rate of industry.
The three cells in the top right hand corner of the matrix are the most attractive in which to
be. These require a policy of investment for growth.
The three cells running diagonally are of medium attractiveness. Management should review
these carefully to determine which ones to invest in and retain.
The three cells in the bottom left hand corner are less attractive. Management should
consider a policy of harvesting or divesting these items.
KEY KNOWLEDGE
Porters Generic Strategy
Porter identified 3 generic strategies that are commonly used by businesses to create and
maintain competitive advantage:
Differentiation
Cost leadership
Focus
Selling price
Higher profit
due to higher
selling price
Profit
Selling
price
Selling
price
Profit
Profit
Page | 24
Cost
Cost
Cost
Differentiation
"In the
middle"
Cost
leadership
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
Higher profit
due to lower
cost
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
1. Differentiation
This involves a product or service that is considered to be different or unique within its
industry. Due to these unique characteristics the organisation can charge a premium. The
uniqueness of the item could be based on a variety of things such as the design, technical
features, support service, branding, etc.
Examples of companies that have used the differentiation strategy include:
2. Cost leadership
This is where an organisation can produce goods or services at a lower cost than the
industry average. Importantly, note that this does not mean lower quality.
Low cost production can be obtained by way of economies of scale, preferential access to
raw materials or labour, access to extensive distribution channels, etc. The cost leadership
product is often a basic good or service which is made available to a large customer base.
Examples of companies that have used cost leadership strategies include:
Dell computers
3. Focus
This is where an organisation concentrates on a small number of niche markets.
Differentiation focus an example would be a specialist holiday or tour operator (e.g.
specialising in Skiing holidays).
Cost focus an example would be a small chain of retailers that create their own label range
of products.
Page | 25
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
High
4. Differentiation
3.
Hybrid
5. Focussed
differentiation
2. Low price
7
1. Low price, low
added value
Low
Low
Page | 26
Price
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
High
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Ansoffs matrix (the Product Market Mix)
This allows companies to identify a number of options to grow the business via existing and
/ or new products in existing and / or new markets.
Existing Products
Existing Markets
New Markets
New Products
1. Consolidation
2. Penetration
3. Withdrawal
4. Product development
5. Market development
6. Diversification
1. Consolidation. This is not doing nothing. It is doing enough to maintain the existing
position.
2. Penetration. Actively trying to increase the share of the market through techniques
such as advertising and PR.
3. Withdrawal. Pulling out of a particular market. Reasons could include its loss making
or a company wants to utilise resources elsewhere.
4. Product development. Developing new products to sell to existing markets. An
example would be a soft drinks manufacturer launching a new healthy range of
drinks.
5. Market development. Existing products are sold in new markets. This can either be
for example geographical (McDonalds establishing restaurants in new geographical
areas) or can be repositioning the market (e.g. Land Rover developing from an
agricultural market vehicle to mainstream car producer).
6. Diversification. Generally considered to be the most risky. There are a number of
types of diversification:
Page | 27
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Page | 28
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Chapter 6
Strategic Action
START
The Big Picture
This chapter covers a number of techniques involved in the implementation of strategic
plans.
Structures
Corporate structure was studied at paper F1. Paper P3 is not so much about explaining the
structures but rather matching the appropriate structure with the chosen strategy.
Types of structure
Functional: based around functions such as production, R&D, sales, etc
Divisional: based around divisions which could be geographic divisions or product
divisions.
Matrix: this combines functional and divisional
Page | 29
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
The Change Kaleidoscope (Balogun and Hope Hailey)
This helps management design approaches to change within a company. It contains 3 rings:
Power
Time
Design Choice
Readiness
Scope
- change path
- change start
Capacity
- change target
- change roles
Capability
Preservation
Diversity
The kaleidoscope does not create prescriptive choices for management to use. Instead, just
like a real kaleidoscope changes the image so the change design mechanisms will change.
KEY KNOWLEDGE
Lewins change models
Page | 30
Moving
The actual change occurs
here.
Refreezing
Stabilising the situation to
the new approach.
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Change can only happen once people have been unfrozen and existing ideas and
misconceptions have melted.
2. Force field analysis
Restraining forces
(resisting change)
Current state
Desired state
The length of the arrow represents the time duration of the force and the thickness of the
arrow represents the strength of the force.
There are driving forces pushing for change and forces resisting change. To encourage
change, change agents should strengthen driving forces and reduce restraining forces.
KEY KNOWLEDGE
Business Process Reengineering (BPR)
BPR is a method aimed at improving the efficiency and effectiveness of business processes
within an organisation.
The process strategy matrix (Harmon) is based on:
Page | 31
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
Complex
Simple
Process type
Outsource
Low
High
Strategic importance of process
Business processing Outsourcing (BPO) is a form of outsourcing that involves contracting 3rd
parties to undertake specific functions. Typically, back office functions such as accounting
activities are outsourced.
Page | 32
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Chapter 7
Information Technology
START
The Big Picture
This looks at IT in the context of supporting strategic plans and linking with various models
referred to previously such as Porters 5 Forces, Value Chain Analysis, etc.
What is e-business?
E-commerce is the buying and selling of goods and services over the internet.
E-business is broader than e-commerce as it also includes IT issues that support key
business processes as well as enabling businesses to work more closely with suppliers and
to better satisfy customer needs.
It inherently involves fast moving and innovative processes.
B2B (Business to business): transactions between business (e.g. a manufacturer to a
wholesaler). Could be used to link a VCA of the purchaser to a VCA of a supplier.
B2C (Business to Consumer): an individual purchasing from a retailer.
Page | 33
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Stages of eBusiness
1. Web presence in effect being simply a brochure on the internet. The aim is to reach a
wider audience and broaden the brand image.
2. Basic e-commerce - undertaking entry level e-commerce to enable the business to
conduct transactions on line. Facilities such as PayPal have made this possible for even the
smallest of businesses.
3. Building and maintaining relationships integrating core areas of the business to enable
closer and quicker relationships with suppliers and customers. Includes CRM facilities.
4. Creating the future fully integrated systems with minimal human interaction. Systems
update automatically.
McFarlans Grid
This is used to assess business and IT alignment and to select projects which need
developing.
Strategic impact of future systems
Low
High
Strategic impact of
current systems
Low
High
Page | 34
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
A push based supply chain is where the products are pushed through the process to the end
customer (i.e. from production to retail). Manufacturing levels are often based on historical
levels.
The majority of businesses comprise a hybrid of some form between push and pull supply
chains. Ford is an example of a business at the push end of the scale whilst technology
companies such as Dell are at the other end where demand pull is dominant.
E-business Pricing
E-business pricing can follow similar pricing techniques to traditional areas of business.
Points to be aware of include:
Page | 35
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Price-Quality Relationship
A priori one would expect a positive correlation between price and quality.
High
Skimming
Premium
Low
Economy
Penetration
Price
Low
High
Quality
The four principal pricing strategies are shown in the above quadrants. The more interesting
ones involve High-Low and Low-High combinations.
Economy (pricing)
This is a no frills low price.
Skimming
Enter the market at a high price to catch customers willing and able to pay the price.
Penetration pricing
Go in at a very low price to win market share.
Premium pricing
Maintain a high price due to the nature of the product.
Cost plus
A markup is added to the (production) cost.
Target pricing
This method backs into the price by calculating the required profit and the possible
production costs first.
Page | 36
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Promotional Pricing
These are in support of campaigns to raise customer awareness of a product.
Perceived value pricing
Plays on perception of value and what the market is willing to pay.
Value Pricing
Increasing the value content of the product so as to defend market share (in times of
difficult economic conditions or competition).
Product range pricing
Sell a core product cheaply and price high related products.
Captive Product Pricing
Similar to product range but product is more closely tied to the initial product.
Competitive pricing
Using competitors as a benchmark.
Price differentiation
Pricing the same product at different levels in different markets.
Psychological Pricing
Plays on the emotion of the consumer.
Product Line Pricing
The overall price reflects the benefits provided by the constituent parts.
Optional Product Pricing
The pricing of additional products and services once the customer has made the initial
purchase.
Product Bundle Pricing
Combining products into one pack and pricing it overall.
Geographical Pricing
Similar to price differentiation.
Page | 37
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Chapter 8
Project Management
Time
Budget
Page | 38
Initiation
Planning or development
Production or execution
Closing
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Work Breakdown Structure
A work breakdown structure (WBS) is a tool used in project management to breakdown and
organise the total work of the project into individual discrete components. An extract for a
WBS when a company decides to enter a new market with an existing product is:
Page | 39
Team 1
Team 2
Team 3
Marketing
Logistics
Legal
Ideas
Local
distributors
Local
requirements
Marketing
plan
Transport
mechanism
Accounting
consolidation
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Network diagrams (Critical Path Analysis)
Critical Path Analysis (CPA) formally identifies tasks which must be completed on time for
the whole project to be completed on time. It is a project management tool that identifies:
KEY KNOWLEDGE
Project Initiation Document
A Project Initiation Document (PID) is a term representing the initial plan of approach
for a project.
The PID brings together all the key information that is needed to commence and run the
project. All the project stakeholders should be aware of it and it should be signed off by the
project sponsors.
It defines all the major aspects of a project and forms the basis for its management and the
assessment of its overall success.
Typical contents of a PID include:
Page | 40
Project objectives
Scope
Business Case
Constraints
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Chapter 9
START
The Big Picture
Financial analysis is dealt with in depth elsewhere in the ACCA syllabus. The key
thing for the P3 syllabus is using financial information to support or enhance your
arguments.
KEY KNOWLEDGE
Financial expectations of stakeholders
Johnson & Scholes propose that strategic options are evaluated using:
1. Suitable. Would it help? Does it fit in with the strategic position of the
organisation. e.g. does it take advantage of an opportunity or reduce a threat
(within SWOT analysis)
2. Feasible. Would it work? Use of techniques such as cash flow analysis and
working capital reviews.
Page | 41
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
Efficiency ratios (e.g. asset turnover, debtor days and creditor days).
Gearing ratios (e.g. debt equity ratio).
Liquidity ratios (e.g. current ratio and quick ratio).
Profitability ratios (e.g. gross margin, operating margin and ROCE).
Interest ratios (e.g. interest coverage).
Leadership
There are numerous theories on leadership.
Analysing them into two complementary groups results in:
1. Traditional. This group includes the trait theories which state that a person will be a
good leader if they have certain characteristics (traits).
2. Contemporary. This group involves transactional leaders (who focus on systems and
processes) and transformational leaders who provide vision and inspiration as well as
utilise emotional intelligence to improve the situation.
KEY KNOWLEDGE
The Budgetary Process
Budgets
A budget is a quantitative plan addressing the future.
Budgetary control systems seek to monitor performance against the budget in a timely way
so that deviations can be identified and rectified. The system can only work as well as the
care and thought that went into defining performance targets to be measured, and the
incentives (and sanctions) that follow from achievement (or not) of those targets.
Goal congruence at all levels of the organisation corporate, divisional and individual must
exist for a budget, and its attendant control systems, to be effective.
Page | 42
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com
ExPress Notes
ACCA P3 Business Analysis
KEY KNOWLEDGE
Decision Trees
A decision tree is a schematic tree-shaped diagram which is used to determine a particular
course of action. Each branch of the decision tree shows a possible decision or occurrence.
The tree structure shows how one choice flows to the next. The use of branches indicates
that each option is mutually exclusive.
Decision trees allow users to take a situation with multiple possible solutions and display it in
a simple, easy-to-understand format that shows the relationship between different events or
decisions. The tree starts on the left and the furthest branches on the tree represent
potential end results.
(end of ExPress Notes)
Page | 43
2015 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any
other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always
obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes
will be accepted by the ExP Group.
theexpgroup.com