My name is Steve Chen, a fellow member of ACCA and course director at APC (www.globalapc.com) teaching ACCA online courses to students from all around the world. This article will explain the topic ‘strategy’ in ACCA Strategic Business Leader (SBL) paper.
There are many definitions for ‘strategy’. However, in the SBL exam, the examiner is not very interested in testing students the wordy definition. What examiners want is the application of this definition to many cases.
According to Drucker, Strategy is a pattern of activities that seek to achieve the organization's objectives and adapt its scope, resources and operations to environmental changes in the long term. Do you really understand what long-term means? If a business needs to change the strategy, does it really need to take several years before changing?
I often explain to my ACCA students that the answer to this question is to focus on strategy elements to understand better why it may take a while to change the strategy.
Elements in strategy:
l Core activities – Airbnb’s core activity remains in its information technology as it mains strong hosts network.
l Core resources – Coca-Cola’s brand is its core resource.
l Value propositions – Apple states smartphones should be more than a collection of features, ie demonstrate experience (value) to its customers.
l Customer relationships – luxury brands often use ‘dedicated personal assistance’ way to manage customer relationships.
l Channels – Facebook uses online platforms to communicate with customers.
l Customer segments – Alibaba focuses both on B2C and B2B customer segments.
l Cost and revenue structure – Joseph Cheaney & Sons provides handmade shoes with high price – this is also my favourite brand.
l Key stakeholders – Gucci gives products to bloggers (influencers) to promote their products.
As you can see from the above list with practical examples, you may notice if a business needs to change the strategy, ie changing the revenue structure from low price to high price, it also needs to change the core activity such as procurement and operation activities, value propositions and channels. This could not be done on a stand alone basis but everything is linked together.
In my SBL course, you will learn many practical examples linked with business models, which is what the examiner actually wants in the SBL exam. In the SBL exam, there are no marks anymore for a pure definition of business models, however, application (giving examples by providing either real example, showing business case, applying the answer to the given case) is more important.
I hope this article helps regarding the topic of strategy. In addition to providing ACCA lectures online, I also wrote articles in ACCA AB magazine. Besides, I am the author of four accounting books. If you are interested in studying ACCA courses with me, please visit my website http://www.globalapc.com for further information, where you can find many of my ACCA demo video lectures.