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V Outsourcing Vendor
Strategic Analysis
Nick Best
For those of you who don’t know me, I’m one of the
TOPCIMA tutors at Reed Business School, and the
author of the official CIMA learning system, on which I
work together with one of the TOPCIMA examiners.
I think most people are pleased with the subject of the case study this
season. A fashion retail group is something most of us can
understand (yes even us men!). There are also lots of real life
companies to examine to get industry information on.
Governance
& Ethics
The first stage of analysis
is to ensure we fully FUTURE
understand where the
Mission &
organisation is heading,
along with its approach Objectives
to meeting stakeholder
needs.
Stakeholder
Mapping
The five year plan gives us some specific targets for the
company:
Good points
• Non-executive Chairman and 6 NEDs mean there is independence on the board
• Range of executive directors to bring wide knowledge to decisions
• Clear Corporate Social Responsibility focus
No information on:
• Committees – Audit, Remuneration, Nomination
• Risk management policies and procedures
• Internal control systems
• Internal audit (I assume there is not an internal audit department)
• Director’s service contracts
Lots of room here to discuss improvements should there be
an unseen issue on control weaknesses or significant risks
that need managing
Nick Best’s Strategic Analysis www.topcima.biz
Ethics
• You will score 1 mark in the technical section for this, and up to 3 further
marks in the application section - if done well.
• You must update this SWOT for unseen issues (underline or bold these in
your exam script), and should aim to include ALL your top 5 issues in your
SWOT.
• A recent CIMA student script review I read, also made it clear that 2-3 word
points in the SWOT are NOT sufficient. Aim to write at least 7-8 words for
each point in your SWOT AND roughly 5 points per heading.
• I’ve shown my points in priority order as I see it. You don’t need to do this
in the exam, but it can help at this stage as you can replace the less
important points with those from the unseen.
• There are lots of PEST issues in this pre-seen but they are
very broad and general, so look for more specific ones in
the unseen to improve this one.
• Each force can be given a strength (e.g. High, Medium, Low). Where
all the forces are high, the profitability of the industry is low, and
divestment may be a good strategy.
• The lower the forces the more attractive the industry is.
• Companies may look at the areas where forces are high and develop
strategies which may lower these.
Intense competition – influx value retailers – CeeCee have strong niche – protecting their
Competi- high street (Primark) – Supermarkets – also profitability
tors dept stores
Online shopping, Easy to copy designs
High
Increases in difficult economic times
BCG/
Cost
Product Life
leadership
Cycle
S W FUTURE
Business Strategy
NOW Mission &
O T Generic strategies Objectives
Ansoff’s matrix
Method of growth
Franchising
Distribution development
Joint Venture A Joint Venture or alliance may be useful to enter vastly different markets,
like in Asia, to gain local knowledge.
OPPORTUNITIES THREATS
1. Expansion in new overseas markets 1. Highly competitive market – price reductions could
2. Expand new product ranges hit profit margins
3. Online sales 2. Worldwide recession
4. Improved customer information to improve 3. Low share price – threatened takeover
targeting – data mining/online information 4. Not keeping up with technological changes or
5. Takeover competitor to expand quickly changing customer requirements
5. Currency changes
Continue
- Shop expansion programmes in current countries
- Investment in IT
- Good relationships with suppliers
- Employment of young designers
- Teamworking in stores
- Focus on CSR
- Online sales – big new market – continued investment
So that’s what I would do. I’m sure you’ll have your own views.
Just remember not to hold onto these too tightly in the exam
– you must primarily deal with the unseen issues!