ACCA P3 Business Analysis - 2010 - Study text - Emile Woolf Publishing
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Chapter 16: Leadership and human resources management
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Creation of knowledge
Knowledge has to be created. People need to be involved in this process, and
knowledge management is partly concerned with encouraging individuals to work
together to create knowledge. IS/IT systems can assist the process. For example:
computer assisted design/computer-assisted manufacture (CAD/CAM) systems
can help to create knowledge in processes such as three-dimensional machining,
tool-making, three-dimensional designing and modelling
virtual reality systems can help users to acquire understanding and knowledge.
Knowledge validation
Some accumulated knowledge becomes obsolete over time, and loses its value. The
validity of current knowledge should therefore be tested to make sure that it is still
valid. Knowledge validation is therefore a process of continually monitoring, testing
and refining the accumulated knowledge base of the organisation, to make sure that
it is still relevant.
Knowledge presentation
Knowledge presentation is concerned with the way that knowledge is displayed to
individuals within the organisation. It may come from different information
systems, and these may present comparable data in different ways. Some
knowledge may be provided in print or in optical form.
When individuals receive information in different forms and from different sources,
it can be difficult to interpret what they have been shown, and to give it meaning.
A function of knowledge management should therefore be to ensure that
information and knowledge are presented in a form that users will find easier to
assimilate.
For example, a company may decide to apply similar coding systems, standards,
programming schemes and templates throughout the organisation, for presenting
information and knowledge.
Knowledge distribution
Knowledge accumulates more when ideas are shared and when individuals
collaborate. Knowledge distribution is concerned with encouraging debate,
discussion and interpretation through individuals sharing their different ideas and
bringing their own perspective to the analysis of problems.
The distribution of knowledge can be improved through the use of intranets, bulletin
boards and newsgroups, and through the use of office automation generally.
Other systems for distributing knowledge include word processing, e-mail, voice
mail and imaging systems that can be used by office workers to communicate and
transmit information and knowledge.
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Knowledge application
Knowledge application is concerned with making knowledge active, by using it to
create added value.
Organisations should develop a culture of knowledge-sharing between employees
in order to expand collective knowledge.
6.10 Advantages of knowledge management
Knowledge management is the process of creating, sharing and using knowledge.
The strategic benefit from knowledge management is competitive advantage
acquired through knowledge that rivals do not have.
IS/IT systems can help organisations to build up a knowledge base.
Some examples of the strategic benefits of knowledge management are:
Industry Success depends on… Application of knowledge management
Professional services
(law, tax, medicine)
Reliable technical advice Expert systems to raise the standard of
professional advice.
Manufacturing Performing complex tasks
well and at a competitive
cost
CAD/CAM, robotics and other systems to
improve performance in key areas
throughout the value chain.
Retailing Relationships with
customers
Use of data warehousing and data mining to
learn more about customers.
Entertainment Creativity Groupware to enable teams of writers to
work together.
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Paper P3
Business analysis
Q&A
Practice questions
Contents
Page
Strategic position and the business
environment
1 Excellence 441
2 PESTEL 441
3 Airtravel 441
4 Diamond 441
Competitive forces
5 Fiveforces 442
6 Niche 442
7 Productlifecycles 442
8 Railwaycompany 443
9 Tuitioncompany 443
Marketing and the value of goods and
services
10 Benchmarking 444
11 Addedvalue 444
12 Valuechain 444
13 Dairyfarm 444
14 Marketingmix 445
15 Modelling,measuring,targeting 445
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Internal resources, capabilities and
competences
16 Corecompetencies 446
17 SWOT 446
18 MoreSWOT 446
Stakeholder expectations. Ethics and
culture
19 Culturalweb:cultureandstrategy 447
20 Mendelow 447
21 CSRandenvironmentalstrategy 447
22 KenDay 448
Strategic choice: corporate strategy
23 BCG 448
24 Matrices 448
25 Global 449
Strategic choice: achieving competitive
advantage
26 Collaboration 449
27 Sustainablecompetitiveadvantage 449
28 Genericstrategies 449
Strategic direction and strategy
development
29 Mission 449
30 Product‐marketstrategy 450
31 Growthstrategy 450
32 Suitability,acceptabilityandfeasibility 451
33 Strategyselection 451
34 R&Dstrategy 451
Practice questions
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Strategic action
35 Rationalstrategicplans 452
36 Emergentstrategy 452
37 Stageindevelopment 452
Modelling and re-designing business
processes
38 Businessprocesses 453
39 Featuresoforganisationalchange 453
40 Change 453
Information technology solutions
41 Channelformarketinganddistribution 454
42 StefanLund 454
43 Travelgoodsfirm 455
44 Electronicmarketing 456
Business strategy and quality initiatives
45 LeekandFlood 456
Project management
46 Businesscase 456
47 Riskmanagementprocess 457
48 Projectmanager 457
49 Projectmanagementsoftware 457
50 Requirementscreep 457
Finance and business strategy
51 Balancedscorecard 457
52 Keysuccessfactors 457
53 EntityP:financialperformance 458
54 ABCGroup:financialanalysis 458
55 Roleoftheaccountant 459
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Leadership and human resources
management
56 HRplan 459
57 Strategicmanagementstyles 459
Practice questions
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1 Excellence
The table below lists the aspects of culture that Peters and Waterman identified in
the most successful and ‘excellent’ companies. Describe each of these characteristics
of excellence, in your own words.
A bias for action
Hands-on, value-
driven
Close to the customer
Stick to the knitting
Autonomy and
entrepreneurship
Simple form, lean
staff
Productivity through
people
Simultaneous tight-
loose properties
2 PESTEL
(a) Identify a model that can be used to carry out a strategic position analysis of
the industry in which an entity operates.
(b) PESTEL is a model for carrying out a position analysis of the environment
within which an entity operates. What does ‘PESTEL’ stand for?
(c) There are several global oil companies, such as Exxon and BP Amoco. Use the
PESTEL model to identify environmental factors that will affect the strategic
planning of such companies.
3 Air travel
Use PESTEL analysis to identify the environmental factors that might affect the
strategic planning for a major international airline.
4 Diamond
Porter’s diamond is used to analyse regional and national competitiveness.
(a) In the context of regional and national competitiveness, explain the meaning
of a ‘cluster’.
(b) Describe five determinants of regional or national competitiveness in Porter’s
diamond model.
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(c) A region in Country X has strong international competitiveness in
environmental industries. These are industries specialising in environmental
technology, such as air pollution control, water and waste water management,
waste management and recycling, energy management and renewable energy,
cleaner technologies and processes, and environmental consulting services.
Required
Using the determinants of regional competitiveness in Porter’s diamond model as
general headings, list 15 factors that might be contributing to the international
competitive advantage in environmental industries that this region of Country X
enjoys.
5 Five forces
(a) Explain the purpose of using Porter’s five forces model.
(b) List the five forces in the model.
(c) For each of these five forces, list four factors that could affect the strength of
the force.
6 Niche
The Eastern Isles Tourist Board is a government-funded body responsible for
promoting and developing tourism in its region of the country. The tourism
industry has been restricted in the past by unpredictable weather in the summer
and cold winters. The Board governors have agreed that in order to increase the
number of tourists coming to the region, it is essential to attract businesses that will
provide services and facilities, such as activity centres and hotels.
To create interest in tourism-related businesses, the Board has decided that it should
identify niche markets in the tourism industry that might be developed in the
Eastern Isles. By identifying niche markets, the Board governors hope that they will
start to attract more businesses that will specialise in catering for particular types of
tourist.
Required
Suggest the market niches that might exist for tourism businesses in the region.
7 Product life cycles
(a) A typical product life cycle has four main phases: introduction, growth,
maturity and decline. Twelve products are listed below. Match these products
to the stage they have probably reached in their life cycle, by filling in the
following table. (In the suggested answer, there are three products at each of
the life cycle stages.)
Practice questions
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Products:
Portable DVD players
Fax messaging
(Hand-written) postcards
Personal identity cards using ‘iris-based’ technology
E-mails
Credit cards
Personal computers
Third generation (3G) mobile telephones
Cheque books
Typewriters
Smart cards (in banking)
E-conferencing
Introduction Growth Maturity Decline
(b) Identify a product or service whose life cycle has not conformed to the
traditional pattern of introduction, growth, maturity and decline.
8 Railway company
The purpose of market segmentation is to divide a market into different sections,
each with a distinctive group of potential customers. A segmentation strategy is
then developed, and a different marketing mix is used to market a product to each
segment.
Typically a different price is charged for the product in each segment, but it may be
necessary to vary the product offered to each segment of the market, in order to
meet the needs of customers in that segment.
Required
Suggest ways in which a railway company might segment its market for rail travel.
9 Tuition company
A tuition company provides a range of tuition services and educational publications
to students preparing for professional accountancy examinations.
Required
Suggest ways in which the tuition company might segment its market for teaching
services and products.
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10 Benchmarking
(a) What is the purpose of benchmarking?
(b) Describe the nature of:
(i) Internal benchmarking
(ii) Competitor benchmarking (or competitive benchmarking)
(iii) Operational benchmarking (also called process benchmarking and
activity benchmarking)
(iv) Customer benchmarking
11 Added value
(a) Define added value.
(b) Suggest how a strategy for adding value might be developed, using the
following concepts:
(i) Core competencies
(ii) Competitive advantage
(iii) Innovation
(iv) Reputation
(v) Organisational structure
12 Value chain
(a) List the primary activities and secondary activities in a value chain.
(b) Explain the significance of the value chain for business strategy.
(c) Identify the primary activities in the value chain for a publisher of educational
text books.
(d) Identify the primary activities in the value chain for a company selling
insurance policies (such as car insurance) by telephone.
13 Dairy farm
About ten years ago, the owners of a small dairy farm producing milk and cream
switched to organic farming methods and making organic dairy products – milk,
cream, cheese, yoghurt and ice cream. They sell their branded products through
three distributors in the region. In addition, they use direct marketing to sell some
cheeses as expensively-packaged gift products. Catalogues are sent to potential
customers by e-mail, customers buy the products online and they are then delivered
direct to the customer.
The owners of the farm believe that their success has been due to their ability to add
value for their customers.
Required
Suggest how the farm may have succeeded in adding value for its customers.