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- 10 Marks
Question
a) A strategy is a course of action, including the specification of resources required to achieve a specific objective. Strategy is concerned with the higher direction of an enterprise that involves top management.
As an alternative to a systematic goal-structured approach, an organization may focus on Critical Success Factors (CSFs) to manage strategy. Johnson and Scholes describe SIX stages in the process of managing strategy using CSFs.
Required:
i) What are Critical Success Factors (CSFs)?
(2 marks)
ii) Explain any FOUR of the stages of managing strategy using CSFs.
(8 marks)
Answer
a)
i) Critical Success Factors (CSFs):
Critical Success Factors (CSFs) are areas in which satisfactory results will enable successful competitive performance and are essential for an organization to excel in order to outperform competition. Control and improvement can be achieved by setting Key Performance Indicators (KPIs) in these areas and monitoring progress against targets.
(2 marks)
ii) Stages of Managing Strategy Using CSFs:
- Step 1: Identify CSFs: Determine the essential areas in which successful performance is crucial. The emphasis is on what must be achieved in broad terms.
- Step 2: Identify Competences Required: Identify the special skills and processes necessary to achieve the CSFs.
- Step 3: Assess Core Competences: Evaluate whether the identified competences are adequate to provide a competitive advantage or if they need to be improved or supplemented.
- Step 4: Identify Key Performance Indicators (KPIs): Establish KPIs for each competence to allow for strategic control.
- Step 5: Monitor Competitors’ Responses: Continuously monitor competitors’ actions and adjust strategies as necessary to maintain a competitive edge.
(Any 4 stages @ 2 marks each = 8 marks)
- Topic: Competitive advantage and strategic direction
- Series: NOV 2017
- Uploader: Dotse