ACCA SBL Concepts of Strategy Notes

Syllabus Recap: Concepts of Strategy

1. Importance of Strategy and Strategic Decisions

   • Strategy defines an organisation’s direction, aligning resources and actions to achieve long-term goals.
   • Strategic decisions are critical, impacting competitiveness, stakeholder value, and adaptability in dynamic contexts.
   • Application: Effective strategy ensures organisational success across diverse sectors.

2. Johnson, Scholes, and Whittington Model

   • Strategic Analysis: Assesses external environment, internal capabilities, and stakeholder expectations.
   • Strategic Choices: Identifies options (e.g., market penetration, diversification) and selects viable strategies.
   • Strategic Implementation: Executes chosen strategies through structures, processes, and change management.
   • Application: The model provides a structured approach to develop and deliver strategy.

Application to Dearn Shoes Ltd

1. Importance of Strategy and Strategic Decisions

   • Context: Dearn Shoes Ltd, Lucland’s fourth-largest shoe manufacturer, faces declining market share (9.4% in 20X4), quality issues with Totland’s X Co, and weak online sales (12%). Its mission is to provide well-made, reasonably priced shoes.
   • Application:
     • Strategic decisions, like reshoring production or enhancing e-commerce, are vital to regain customer trust (satisfaction 7.0/10) and compete with Flamingo’s speed-to-market.
     • A clear strategy aligning with Lucland’s ethical and digital trends ensures Dearn’s long-term competitiveness and stakeholder value.

2. Johnson, Scholes, and Whittington Model

   • Context: Dearn operates in a competitive industry with environmental risks and a hierarchical, risk-averse board, limiting agility.
   • Application:
     • Strategic Analysis:
     • External: Growing demand for sustainable, Lucland-made shoes; Rigo leads in casual shoes for 18- to 30-year-olds.
     • Internal: Strong staff loyalty (8.2/10) but outdated e-commerce and inventory systems.
     • Stakeholders: Customers demand ethics; shareholders seek profitability.
     • Strategic Choices:
     • Market development: Enhance online platform to boost sales.
     • Product development: Innovate sustainable casual shoes via R&D to target younger demographics.
     • Diversification: Explore 3D-printed custom shoes, aligning with industry trends.
     • Strategic Implementation:
     • Restructure to empower R&D and digital teams, reducing hierarchy.
     • Invest in modern e-commerce systems and train staff for digital sales.
     • Transition from X Co to Lucland production, communicating changes to stakeholders to rebuild trust.