1. Strategic Analysis

2. Micro and Macro environmental changes
Strategic analysis
The basic frame work: Strategy as a link between the firm and its environment
Micro and Macro environmental changes
The firm
Goals and values
Resources and capabilities
Structure and system
Strategy
Strategic fit
Fundamental of strategy as the link between the firm and its external environment is the notion of strategic fit. For a strategy to be successful it must be consistent with the firm external environment and with its internal firm goals, resources and capabilities and the structure

3. Strategic analysis Strategic analysis Analysis of firm
Goals, values and performance , analyzing capabilities and resources
Analysis of macro , industry and competitive environment

4. Creating value Successful strategy is creating value
Continuously creating customer value
Firm value
Shareholder value

5. Value Creation

6. The Basic Value Chain Margin Margin Technological Development Service
Marketing & Sales
Human Resource Mgmt.
Support Activities
Outbound Logistics
Firm Infrastructure
Procurement
Operations
Inbound Logistics
Primary Activities

7. Value Chains are part of a Total Value System
Supplier Value Chain
Firm Value Chain
Channel Value Chain
Buyer Value Chain 69

8. Diagnosing the firm current strategy
Strategy formulation
Assess the current situation
Identify the current strategy of the firm and assess how well that strategy is doing in terms of financial performance
Identify the inadequacies of firm value drivers and reason for deviations-Internally driven or external driven
Strategic or operational level actions

9. Sales on capital employed
Performance diagnosis
Diagnosis is primarily starts from accounting based financial performance indicator of Return on capital employed or ROCE. Any disaggregation of ROCE in to fundamental of value drivers. Du point analysis reflects the value drivers and its impact on ROCE.
ROCE
Return on sales
COGS/Sales
Depreciation/Sales
SGA/Sales
Sales on capital employed
Fixed asset turn over
Inventory turn over
Debtors turn over

10. Income statement for Ashanti plc for the year ending 31 March 2011
2010
2011 £m
Revenue (Note 2)
2,240
2,681
Cost of sales (Note 3)
-1,745
-2,272
Gross profit
495
409
Operating expenses
-252
-362
Operating profit
243 47
Interest payable
-18
-32
Profit before taxation
225 15
Tax
-60 -4
Profit for the year
165 11
2010 (£m)
2011 (£m)
Opening inventories
241
300
Purchases
1,804
2,378
2,045
2,678
Closing inventories
-300
-406
Cost of sales
1,745
2,272
Notes:
2. All sales and purchases are made on credit
3. The cost of sales figure can be analyzed as follows:

11. Balance sheet of Ashanti plc., as at 31 March 2011
Non-current assets
Property, plant and equipment (at cost less depreciation)
Land and buildings
381
427
Fixtures and fittings
129
160
510
587
Current assets
Inventories at cost
300
406
Trade receivables
240
273
Cash at bank 4 -
544
679
Total assets
1,054
1,266
Equity
£0.50 ordinary shares (Note 1)
Retained earnings
263
234
563
534
Non-current liabilities
Borrowings - 9% loan notes (secured)
200
Current liabilities
Trade payables
261
354
Tax due 30 2
Short-term borrowings (all bank overdraft) 76
291
432
Total equity and liabilities
Notes:
1. The market value of the shares of the business at the end of the year was £2.50 for 2010, and £1.50 for 2011.
4. A dividend of £40m had been paid to the shareholders in respect to each of the years.
5. The business employed 13,995 at 31 March 2010 and 18,623 at 31 March 2011.
6. The business expanded its capacity during 2010 by setting up a new warehouse and distribution centre in the south of Wales