Chapter 3 - Environmental Analysis

Question 1

Porter’s Diamond

Answer 1

• Factor Conditions - Basic, Advanced
• Demand Conditions - “fussy customers”
• Strategy, Structure, Rivalry - competition, long-term view
• Related + Supporting Industries - “cluster”

* Lobby govn to stimulate diamond - CPA

Question 2

Porter’s 5 Forces

(microenvironment)

Answer 2

• Bargaining power of suppliers
• Bargaining power of customers
• Threat of new entrants
• Threat of substitute products
• Competitive rivalry

* 6th force - goverment

Question 3

3 types of stakeholder

Answer 3

• Internal - staff
• Connected - cmrs, suppliers, lenders
• External - govn, pressure groups

Question 4

Mendelows Matrix

Answer 4

Power - Interest

• Minimal effort
• Keep informed
• Keep satisfied
• Key players

Question 5

Resolving stakeholder conflict (Cyert and March)

Answer 5

• Satisficing - compromise
• Sequential attention
• Side payments
• Exercise of power

Question 6

Puropses of Competitor analysis

Answer 6

• Competitors future strategy
• Predict competitor reactions
• How competitors might be influenced

Question 7

4 dimensions of CSR (LEEP)

Answer 7

• Legal
• Economic
• Ethical
• Philantropic

Question 8

Sustainability

Answer 8

Use of resources in such a way that needs of future not compromised

• Strategy and oversight - understanding the key drivers
• Execution and alignment - staff training/involvement
• Performance and reporting - setting targets and monitoring performance

Question 9

‘Triple bottom line’

Answer 9

• Profit
• People
• Planet

Question 10

CIMA Code of Ethics

Answer 10

• Confidentiality
• Integrity - straighforward and honest
• Professional competence
• Objectivity - avoid bias
• Professional behaviour

Question 11

Stakeholder Analysis

Answer 11

• identify key stakeholders
• assess their interests
• ways their interests may affect org.

Question 12

Reasons for performing stakeholder analysis

Answer 12

• help formulate/implement strategy
• help manage reactions
• improves relations with stakeholders
• improves corporate governance

Question 13

Stakeholder Power

Answer 13

• Position
• Resources controlled e.g. union leader
• System power e.g. political access, close to major cmr
• Expert power e.g. knowledge
• Personal power - communication/charisma

Question 14

Four ethical stances

(J, S + W)

Answer 14

• Short term shareholder - max profits this year, comply with law
• Long term shareholder - recognise investing makes money in future
• Multiple shareholder obligation - we have a role to play in society
• Shaper of society - doing good more important than profit

Question 15

Reasons for undertaking environmental analysis

Answer 15

• Assess competition
• Understand market/industry
• Help meet stakeholders needs