Analyse the impact and influence which the macro environment has on an organisation and its business strategies

Unit 32: Business Strategy

Unit code    K/508/0574

Unit level    5

Credit value         15

Introduction

The aim of this unit is to develop students’ awareness of the different kinds of strategy which could be used in an operational, tactical or strategic role for an organisation.

This will be underpinned by a thorough knowledge and understanding of the theories, models and concepts which could significantly support an organisation’s strategic choice and direction.

On successful completion of this unit students will have developed sufficient knowledge and understanding of strategy to make a positive, efficient and effective contribution to the development of business plans and operational direction. This could be in the role of a junior manager responsible for having a specific input into an organisation’s decision-making and planning.

Learning Outcomes

By the end of this unit a student will be able to:

1. Analyse the impact and influence which the macro environment has on an organisation and its business strategies.
2. Assess an organisation’s internal environment and capabilities.
3. Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a given market sector.
4. Apply models, theories and concepts to assist with the understanding and interpretation of strategic directions available to an organisation

Essential Content

LO1 Analyse the impact and influence which the macro environment has on an organisation and its business strategies

The Strategic Context:

• Missions, visions and objectives.
• The definition and meaning of strategy.
• The role of strategy to achieve business objectives and goals, strategic intent and different strategic direction.
• Different strategic planning techniques.

Analytical frameworks of the macro environment:

• The different types of frameworks and analysis of the macro environment, including:
• Stakeholder analysis: stakeholder matrix, stakeholder mapping. Environmental analysis: PESTLE and Porter’s Five Forces model. Structure-conduct-performance model.
• Strategic positioning: Ansoff’s growth vector matrix. Organisational audit: SWOT analysis, benchmarking indicators.

LO2 Assess an organisation’s internal environment and capabilities

Organisational internal environment:

• What are strategic capabilities and what are the key components of strategic capabilities?
• Resource-based view strategy as a basis for competitive advantage and the McKinsey’s 7S model as a management tool.
• Analysis of strategic capabilities using the VRIO/VRIN framework. Benchmarking strategic capabilities and value chain analysis.
• Cost-benefit analysis.

LO3 Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a given market sector

Analytical tools and models of analysis:

• The Balanced Scorecard to align organisation vision and strategy. Competitive analysis using Porter’s Five Forces model.
• Stakeholder analysis.
• Applying the Ansoff matrix to product/market strategy.

LO4 Apply models, theories and concepts to assist with the understanding and interpretation of strategic directions available to an organisation

Strategic choices and directions:

• The application of Porter’s generic strategies: cost and price leadership strategy, differentiation strategy, focus strategy and the extended model of Bowman’s strategy clock.
• Hybrid strategy. Diversification. Vertical/horizontal integration.