Analysing the Strategic Position of a Business

What Analysing the Strategic Position of a Business covers

Analysing the strategic position of a business is examined on Papers 1, 2 and 3, and is the largest topic in the course. It covers the hierarchy of objectives, the internal analysis of financial and non-financial performance, the external analysis of the political, economic, social and competitive environment, and the appraisal of an investment.

The 27 subtopics

Each one has its own page.

• Influences on the mission and corporate objectivesThe internal capabilities and external pressures that shape what a business sets out to do.Open →
• Mission, objectives, strategy and tacticsHow mission, corporate and functional objectives fit together, and how strategy differs from tactics.Open →
• Functional objectives and their influencesWhat each function sets out to achieve, and the internal and external influences on it.Open →
• SWOT analysis and its limitationsThe four elements, matching strengths to opportunities, and why the analysis is subjective and static.Open →
• Return on capital employed and the current ratioCalculating both, and what each says about profitability and liquidity.Open →
• Gearing and the ratios of working capitalGearing, payables days, receivables days and inventory turnover, and what each reveals.Open →
• Financial statements and the categories of ratioWhat the balance sheet and income statement show, and the profitability, liquidity, gearing and efficiency categories.Open →
• Using ratio analysis, and its limitsComparing over time and between firms, and why window dressing and industry differences distort it.Open →
• Non-financial measures of performanceCapacity utilisation, productivity, quality, labour turnover, market share and customer retention.Open →
• Benchmarking and core competencesComparing against the industry, identifying core competences, and short-term against long-term assessment.Open →
• The Triple Bottom LineProfit, people and planet, Elkington's argument, and the difficulty of comparing the three.Open →
• Competition law and labour market legislationPrice-fixing and abuse of dominance, and the minimum wage, working hours and anti-discrimination law.Open →
• Environmental legislation and government supportPollution control, waste, emissions and reporting duties, and the tax incentives and grants on offer.Open →
• Regulators, infrastructure and environmental incentivesWhat regulators do, how infrastructure creates opportunity and threat, and carbon taxes and emissions trading.Open →
• Trade policy and responding to political changeTariffs, quotas, subsidies and trade agreements, and lobbying, relocation and diversification as responses.Open →
• GDP, taxation and exchange ratesHow GDP, corporation tax, income tax, VAT and the exchange rate affect a business.Open →
• Inflation, fiscal policy and monetary policyInflation, expansionary and contractionary fiscal policy, and interest rates as monetary policy.Open →
• Trade, protectionism and responding to economic changeFree trade and protectionism, and the strategic and functional decisions economic change forces.Open →
• Demographic and social changeAgeing, migration, changing purchasing habits, and the pressure to act responsibly.Open →
• Corporate social responsibility and its criticsWhat CSR delivers, what it costs, and the shareholder and stakeholder concepts.Open →
• Carroll's pyramid and technological changeThe four levels of the pyramid, and how technology changes each function of a business.Open →
• Porter's five forces: entry and buyer powerWhat raises the threat of entry, and what gives buyers power over a business.Open →
• Supplier power, rivalry and substitutesWhat gives suppliers power, what intensifies rivalry, and when substitutes threaten.Open →
• Using five forces to shape strategyReading the collective strength of the forces, and building barriers or reducing supplier power.Open →
• Payback period and average rate of returnCalculating both, what each shows, and the weakness they share.Open →
• Net present value and the time value of moneyDiscounting future cash flows, calculating present value, and reading a positive NPV.Open →
• Investment criteria, risk and sensitivity analysisHurdle rates, the non-financial factors that override them, and testing an investment for sensitivity.Open →

What you need to know

Answer each one before you reveal it.

Take Analysing the Strategic Position of a Business further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

• Strength vs Opportunity

  Strength: internal capability supporting strategic success. Opportunity: external condition offering potential advantage.

• Liquidity vs Profitability

  Liquidity: ability to meet short-term obligations. Profitability: ability to generate surplus from activity.

• Gearing vs Liquidity

  Gearing: reliance on long-term debt within capital employed. Liquidity: ability to meet short-term obligations.

Questions from this topic

Each one with the model answer underneath.

1. 1

   How do the values and beliefs of founders or senior leaders influence a business mission?

   Model answer

   They shape the fundamental purpose and direction of the business, as the mission often reflects what the founders or leaders believe is important and worth pursuing.

2. 2

   In what way does organisational culture act as an internal influence on a business mission?

   Model answer

   The shared values, attitudes and behaviours within the organisation shape what the business sees as its purpose and how it expresses its aims.

3. 3

   How do available resources influence a business mission?

   Model answer

   The resources a business has access to determine what it can realistically aim to achieve, constraining or enabling the scope of its stated purpose.

4. 4

   How do market conditions externally influence a business mission?

   Model answer

   Market conditions such as demand levels, growth trends and customer needs shape what purpose the business can viably pursue and communicate.

5. 5

   In what way does the competitive environment influence a business mission?

   Model answer

   The actions and positioning of competitors affect how a business differentiates its purpose and what it aims to achieve relative to rivals.

6. 6

   How do societal expectations influence a business mission?

   Model answer

   Changing social attitudes and expectations about business behaviour can shape the values and purposes a business chooses to emphasise in its mission.

What is inside Levo

Six ways to work the same material.

Analysing the Strategic Position of a Business revision questions

What does Analysing the Strategic Position of a Business cover in AQA A-Level Business?

27 subtopics: influences on the mission and corporate objectives, mission, objectives, strategy and tactics, functional objectives and their influences, swot analysis and its limitations, return on capital employed and the current ratio, gearing and the ratios of working capital, financial statements and the categories of ratio, using ratio analysis, and its limits, non-financial measures of performance, benchmarking and core competences, the triple bottom line, competition law and labour market legislation, environmental legislation and government support, regulators, infrastructure and environmental incentives, trade policy and responding to political change, gdp, taxation and exchange rates, inflation, fiscal policy and monetary policy, trade, protectionism and responding to economic change, demographic and social change, corporate social responsibility and its critics, carroll's pyramid and technological change, porter's five forces: entry and buyer power, supplier power, rivalry and substitutes, using five forces to shape strategy, payback period and average rate of return, net present value and the time value of money and investment criteria, risk and sensitivity analysis. Each one has its own page with questions and model answers.

How is Analysing the Strategic Position of a Business organised?

By the AQA 7132 specification, subtopic by subtopic, so it matches the order you are taught it in.