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Notes
ACCA Paper P3
Business Analysis
For exams in 2010

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 ExPress Notes
ACCA P3 Business Analysis

Chapter 1

The Strategic Position of an

Organization

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”

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 ExPress Notes
ACCA P3 Business Analysis

Strategic planning: An organisation’s 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,
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 strategy: covers the “big view” of the organisation.

It answers the question “What business or businesses should
Corporate we be in?

Business strategy: the strategy of a single business

Business organisation or the strategies of strategic business units
(SBUs)

Functional Functional (or operational) strategy: the functional strategies

involving items such as marketing, IT and HRM that support
the business strategy.

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.

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reproduction. All examples presented in these course materials are for information and educational purposes only and
should not be applied to a specific real life situation without prior advice. Given the nature of information presented in
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 ExPress Notes
ACCA P3 Business Analysis

Analysis

Choice Implementaion

2. Mintzberg’s 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. Lindblom’s 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.

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material partially and/or in full by any means, be it printed, photocopied, on electronic devices or any other means of
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 ExPress Notes
ACCA P3 Business Analysis

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.

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private use. It is illegal for any individuals to reproduce this for commercial use or for companies to reproduce this
material partially and/or in full by any means, be it printed, photocopied, on electronic devices or any other means of
reproduction. All examples presented in these course materials are for information and educational purposes only and
should not be applied to a specific real life situation without prior advice. Given the nature of information presented in
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these materials, and given that legislation may change at any time, The ExP Group will not be held liable for any
information presented in these materials as to its application to any specific cases.