Chartered Global Management Accountant (CGMA) Strategic Management and Competitive Strategy Syllabus

Strategic Management and Competitive Strategy syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Strategic Management and Competitive Strategy in Chartered Global Management Accountant (CGMA), not a summary of it.

1. 1

   Strategic Analysis

   4 topics

   • The Strategic Management Process
     • Rational versus emergent strategy
     • Mission, vision, and strategic objectives
   • External Environment Analysis
     • PESTEL analysis of the macro-environment
     • Porter's five forces and industry attractiveness
     • Scenario planning and competitor analysis
   • Internal Analysis and Capabilities
     • Resource-based view and VRIO framework
     • The value chain and value system
     • Core competences and distinctive capabilities
   • Synthesis Tools: SWOT and Gap Analysis
2. 2

   Strategic Choice and Competitive Advantage

   4 topics

   • Generic Competitive Strategies
     • Cost leadership, differentiation, and focus
     • The strategy clock and hybrid strategies
   • Directions for Growth
     • Ansoff's product-market matrix
     • Diversification and the BCG matrix
   • Methods of Strategic Development
     • Organic growth, acquisitions, and strategic alliances
     • Mergers and joint ventures
   • Evaluating Strategic Options
     • Suitability, acceptability, and feasibility (SAFe)
3. 3

   Digital Strategy and Business Models

   4 topics

   • The Digital Ecosystem
     • Disruption, platforms, and network effects
     • The Fourth Industrial Revolution technologies
   • Emerging Technologies and Their Impact
     • Big data, analytics, and artificial intelligence
     • Cloud, blockchain, and process automation
   • Business Model Innovation
     • The business model canvas
     • Digital transformation and value creation
   • Data Strategy and Cybersecurity at the Strategic Level
4. 4

   Strategy Implementation and Performance

   4 topics

   • Aligning Structure, Systems, and Strategy
     • The McKinsey 7S framework
     • Strategic control and feedback
   • Strategic Performance Measurement
     • The balanced scorecard and strategy maps
     • Critical success factors and key performance indicators
     • The performance prism and triple bottom line
   • Managing Strategic Risk
   • Change Management for Strategy Execution

Strategic Management and Competitive Strategy flashcards for Chartered Global Management Accountant (CGMA)

25 of 50 cards from the Strategic Management and Competitive Strategy deck — real questions with worked answers.

1. What are the three core stages of the strategic management process (sometimes called the rational/deliberate model)?

   1) Strategic analysis (understanding the environment, resources, and stakeholder expectations); 2) Strategic choice (generating, evaluating, and selecting options); 3) Strategic implementation (structuring, resourcing, and managing change to execute the chosen strategy).

2. Distinguish between deliberate (intended) strategy and emergent strategy as described by Mintzberg.

   Deliberate strategy is consciously planned and intended in advance; emergent strategy arises from patterns in decisions made over time in response to events. Realised strategy is the combination of the deliberate elements actually implemented plus emergent elements, minus the unrealised intended strategy.

3. What does the acronym PESTEL stand for in external macro-environment analysis?

   Political, Economic, Social, Technological, Environmental (ecological), and Legal factors.

4. List the five forces in Porter's Five Forces model used to assess industry attractiveness.

   1) Threat of new entrants; 2) Bargaining power of suppliers; 3) Bargaining power of buyers; 4) Threat of substitute products or services; 5) Competitive rivalry among existing firms.

5. In Porter's Five Forces, what makes a high threat of new entrants more likely?

   Low barriers to entry: low economies of scale required, low capital requirements, easy access to distribution channels, low product differentiation/brand loyalty, no proprietary technology or learning-curve advantages, and weak expected retaliation from incumbents.

6. What is a strategic group, and why are strategic group maps useful in industry analysis?

   A strategic group is a set of firms within an industry following similar strategies on key dimensions (e.g., price, breadth, geographic scope). Strategic group maps show competitive positioning, reveal mobility barriers between groups, and identify which rivals compete most directly.

7. What is the purpose of analysing Key Drivers of Change and constructing scenarios in environmental analysis?

   Key drivers are the high-impact forces (often from PESTEL) most likely to affect industry structure. Scenarios build several internally consistent views of possible futures from those drivers, helping managers test the robustness of strategy under uncertainty rather than relying on a single forecast.

8. Define a 'resource' versus a 'competence' in internal analysis.

   A resource is an asset the organisation owns or has access to (tangible: plant, finance; intangible: brand, patents; human). A competence is the ability/activity to deploy resources effectively. Core competences are competences that are difficult to imitate and underpin competitive advantage.

9. What does the VRIO/VRIN framework assess, and what do the letters stand for?

   It tests whether a resource or capability gives sustainable competitive advantage. VRIN: Valuable, Rare, Inimitable (costly to imitate), Non-substitutable. VRIO adds Organised (the firm is organised to exploit it). Resources passing all tests yield sustained competitive advantage.

10. In Porter's value chain, name the five primary activities.

    1) Inbound logistics; 2) Operations; 3) Outbound logistics; 4) Marketing and sales; 5) Service.

11. In Porter's value chain, what are the four support activities?

    1) Firm infrastructure (general management, finance, planning); 2) Human resource management; 3) Technology development; 4) Procurement.

12. What is benchmarking and what main types exist?

    Benchmarking compares an organisation's processes/performance against a standard to identify improvement. Types: internal (between units), competitive (against direct rivals), functional/industry (against others in the sector), and generic/best-in-class (against the best regardless of industry).

13. What four elements make up a SWOT analysis, and how are they classified by origin?

    Strengths and Weaknesses are internal factors; Opportunities and Threats are external factors. Strengths and Opportunities are positive/helpful; Weaknesses and Threats are negative/harmful to objectives.

14. What is a TOWS matrix and how does it extend SWOT?

    A TOWS matrix converts SWOT into action by pairing factors to generate strategies: SO (use strengths to seize opportunities), ST (use strengths to counter threats), WO (overcome weaknesses to grasp opportunities), and WT (minimise weaknesses and avoid threats).

15. What does gap analysis measure, and how is the planning gap expressed?

    Gap analysis measures the difference between forecast performance (where current strategy will take the organisation) and the target objective. The planning gap is closed through a mix of expansion (organic growth), diversification, and acquisition/other strategies.

16. Name Porter's three generic competitive strategies.

    1) Cost leadership (lowest-cost producer industry-wide); 2) Differentiation (unique value perceived industry-wide); 3) Focus (cost focus or differentiation focus targeting a narrow segment).

17. What does Porter mean by being 'stuck in the middle'?

    A firm that fails to commit clearly to either cost leadership or differentiation pursues both inconsistently, achieves neither low cost nor distinct value, and typically earns below-average returns because it lacks a clear competitive advantage.

18. Outline the four cells of Ansoff's product-market growth matrix.

    1) Market penetration (existing products, existing markets); 2) Product development (new products, existing markets); 3) Market development (existing products, new markets); 4) Diversification (new products, new markets) — the riskiest direction.

19. Distinguish related from unrelated (conglomerate) diversification in Ansoff's framework.

    Related diversification moves into activities linked to the existing value chain (e.g., backward/forward vertical integration or horizontal into complementary products), seeking synergy. Unrelated (conglomerate) diversification enters businesses with no obvious link, relying mainly on financial/managerial logic and carrying higher risk.

20. What are the three principal methods of strategic development?

    1) Organic (internal) development — building capabilities in-house; 2) Mergers and acquisitions (M&A) — buying or combining with another firm; 3) Strategic alliances/joint ventures — cooperating with partners.

21. Give one key advantage and one key disadvantage of growth by acquisition versus organic growth.

    Advantage: acquisition gives fast access to markets, capabilities, or assets and removes a competitor. Disadvantage: high cost (often paying a premium), integration difficulties, and cultural clashes frequently mean acquisitions fail to deliver expected value, whereas organic growth is slower but lower-risk and culturally consistent.

22. What three success criteria does Johnson, Scholes and Whittington use to evaluate strategic options?

    1) Suitability (does it address the strategic position/fit the environment and capabilities?); 2) Acceptability (does it meet stakeholder expectations on Risk, Return, and Reactions?); 3) Feasibility (can it be resourced and delivered?).

23. Under 'acceptability', what are the three Rs assessed?

    Return (financial and non-financial benefits, e.g., profitability, shareholder value), Risk (likelihood and consequences of failure, e.g., financial ratios, sensitivity), and Reactions of stakeholders (will key stakeholders accept it?).

24. State the formula for Net Present Value (NPV) used in evaluating strategic options.

    $$NPV = \sum_{t=0}^{n} \frac{C_t}{(1+r)^{t}}$$ where $C_t$ is the net cash flow in period $t$, $r$ is the discount (cost of capital) rate, and $n$ is the project life. A positive NPV indicates the option adds value.

25. How is the payback period and the Accounting Rate of Return (ARR) calculated?

    Payback period is the time for cumulative cash inflows to recover the initial outlay. ARR is $$ARR = \frac{\text{Average annual accounting profit}}{\text{Average (or initial) investment}} \times 100\%$$ measuring return as a percentage of investment.

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