Bench Marking

Bench Marking
About
This is a systematic process of critically evaluating the best performance in the market in order to improve the organizational performance.
The objective is to generate a competitive advantage by improving by exiting process.
The benchmarking can be divided into 2
1. Internal Benchmarking
2. External Benchmarking
Internal Benchmarking
The internal benchmarking can be divided further into 2
I. Functional benchmarking
This is where to identifying the best function within the organization and improving the other function in order to the higher level of performance
Example
Comparing the marketing department performance with financial department performance this will help to developed performance.
II. Activity Benchmarking
This is to identifying very successful activity and improving the other activities to in order to achieve higher level of performance.
These are commonly used in a project comparison
External benchmarking
The external Benchmarking also can be divided into 2
I. Competitive benchmarking
This is where to identifying the best organization in the business and evaluating the process to developed the company’s performance into a higher level.
This will help the organizations to learning from the competitor performance.
II. Strategic benchmarking
This is systematic process of identifying the best practices irrespective of the industry in order to improve the exiting process.
This will help the company to learn good things from the other best practices companies to develop.

Process of Benchmarking
1. Top management support and strategies
2. Identifying the specific activity or process to benchmarks
3. Identifies the types of benchmarking
4. Identifies the specific best practices
5. Identifies the gaps between the best practices and the company
6. Developed strategies to reach the highest level
7. Allocate the responsibility to implement best practices
8. Evaluate the performance
9. Monitoring and control the performance
Advantages of Benchmarking
1. This will help the organization to identifies the current position in markets
2. Help to developed a future strategies and objectives
3. Provide a direction for decision making
4. Improve the overall standards within the organizations
5. Help to identifies the customer needs
6. Improve the new practices
Limitations of Benchmarking
1. Fully emphasis on the past success
2. He data’s may be manipulated
3. The benchmarking activity is an uncertainty
4. Will take time to identifies the best practices in market
5. May lead to ignore the customers requirements
6. Limits the innovations and creativities
7. Will take long time to implement.

Business Process Reengineering (BPR)

Business Process Reengineering (BPR)
About
This is a fundamental rethinking and radical redesign of the business process to achieve a grammatical improvement of cost, quality and Performance.
This concept involves improving the exiting process grammatically to generate a radical result(such a new developments).
Development of BPR
1. Identifies the process to reengineer
2. Developed a process vision and objective
3. Link parallel activities
4. Identifies exiting process and improvements
5. Developed a proto type to ensure successful performance.
Advantages of BPR
1. This will enable the organization to enjoy the competitive advantage
2. Improve the level of performance.
3. Improve the creativity and innovation procedures.
4. Improve customer satisfaction level
5. Adopting the emergent strategy decision making.
Limitations of BPR
1. Negatively influence customer reaction and customer service.
2. May not suited for all industry for a radical redesign
3. May negatively influence core competence of the business
4. May ignore the staffs reactions and emotions
5. May high costly.
6. May lead to lack of focusing the customer needs

The Key words in Exam Questions

The pass or the failure is depending on the answer of the questions; to understanding the question is necessary to understand the question,

Therefore it’s important to understand the key word or Critical words using in question paper ,

Here are some examples,

List
If a question asks to list down the benefits of ERP, the student should list the Benefits of ERP. In this question, Definition of ERP is not needed. Only marks will provided for listing the points.

State
When question has key word of State, the student should clearly explain the requirements and the facts to supporting to their points.

Define
This is where students need to define the words what require by examiner marks allocated only for defining.

Distinguish
The student needs to highlights the difference as their requirement. Point outs of the clear differentiation bring marks.

Explain
Student needs to provide clear meanings of their requirements,

Identifies
This is where students need to recognized or identified the necessary information from the case give,

Illustrate
This is where students ask to explain their points with the real case examples,

Apply
Students need to be using the practical situation to answer these questions, specially applying theories to Practical situation.

Calculate
Requesting to mathematical calculations,

Demonstrate
Students requires to provides a practical meanings or practical applications on that,

Prepare
Students ask use the given approaches in questions,

Solve
Student asks to find an answer for it; marks are base on their arguments,

Analysis
Examining the given details of given information,

Categories
Students asked to explain the divisions or classifications of it,

Compare and Contrast
Students are ask to show similarities and differentiations of its,

Construct
To building up the arguments,

Discuss
Detail arguments of the given information,

Interpret
Explain in familiar terms,

Priorities
Answering in order, placing the orders in the answers,

Produce
Create Arguments,

Advise
Students ask to counsel based on give case,

Evaluate
Making discussion and recommendations

Recommend
Students ask to give a recommendation for the give case or the problems.

How to Pass Exams

How to Pass Exams
This is a most of the student questions. Whenever the students are facing exams, they want to know how I can pass this exam.
Most of the examiners are answering this question each and every Paper Reviews, their recommendation is
“Answer the Question ask”
When a student sees this answer from the examiners, student feels their examiners are playing fool with them, but the real case is that’s the obvious answer for how to pass the exams.
Student’s common mistakes in reading questions
• Read the question without understanding,
• Read the question based on their know knowledge basis
• Not to understand how many Sub question in the questions,
Therefore students are always instruct to do the following methods to pass their exams,
• Read Question Carefully
• Understand the Question with their Syllabus area.
• Identifies how may Sub Questions are available in Each questions,
• Analysis how many marks are allocated for each Sub questions,
• Identifying the time Allocation for each sub questions,

Most of the Students made mistakes on Understanding the question request by Examiners. Therefore each student has responsibility to understand the differentiation of key Words of the Questions.

Defences Against Takeover bids

Defences Against Takeover bids
When a company bid to a target company the following techniques use by Target Company to against their takeover bids.
Before the bid
• Effective communication with share holders
When a target company gets to know there are going to bid by other companies, the target company will start the effective communicational with shareholder to not to sell their shares to others.
• Poison Pills
This is where the target company issues bonds or preference shares which can be convert as an ordinary share at the takeover points. This technique is use to threat the bidder to spend much more for acquiring the target company.
• Shark repellent super majority
This is usually happen to the target companies. This is where change articles of association to very high percentage of shares approve an acquisition or merger.
For example
Convert the 80% of share approvals to acquisition or merger.
• High assets value
Revalue the fixed assets value and show the companies true value to the acquirer.
After the bid
• Rejection letter
When a target company received the bidders offer document, the target company must reply to the share holders within 14 days. The letter should Constant the position of the organisation and what are they going to do feather.
• Profit forecast
The target explains their profit forecast to the stakeholders and says their expected returns in future as this.
This forecast should be a viable and achievable to the company, if not its create the company value feather less than now.
• Attacking to bidder
This is where typically evaluate the bidder’s strategies and the financial source and attack back to the bidder.
• White Knight
Bring a favourable investor or a partner to counter bid to the original acquiring company.
• Regulatory protections
This is where the target company seeks the government intervention to the takeover bid and announce as takeover is not possible due public interest.
• Advertising campaigns
Create a high level of advertising against to takeover bid and use that advertisement to show their power to all stakeholders.

Merger and Acquisition [M&A]

Introduction
Merger define as “where two companies have agreed to integrated operations and as emerged to a new company together”.

For example:-

A company A and company B merger and create as a new entity of company C. in the same time company A and B also Exiting their businesses.

The acquisition is where to define as “this is where a company[X] purchases another company[Y] and be identical as same as before[X]”.

For Example:-

When company X Purchases the company Y and be company X. after the Acquisition there is no company Y to be Exiting.

Reasons for Acquisitions and merger
The synergy effect
Combination is creating greater value than individual.

Economies of scale
The combination will lead to reduction of cost through the rationalization of functions.

To increase market share
Combination leads to lager customer base, and reduce of competition due to synergic effects.

Tax benefits
The firm can claims tax reliefs for a group. [When the acquiring company is in loss position its help the acquirer to claim as tax benefits for short time]

To take advantages of other firm
Its help to improve the technical, management expertise is combining to build a more efficient and competitive advantage.

Utilization of surplus cash
Its help the merger or acquisition to use the surplus cash to the investment opportunity.

Problems with merger and Acquisition
Lack of goal congruence
The merged organizations might not have a clear direction with regards to their strategies.

Over Valuation or Under Valuation of new company
Some cases paying over value and acquire the company may not getting their expected value for their investment.

Purchase of cheap company
Buying a company when it’s available to cheaper rate, but sometimes the company brought may not related to the company’s operations.

Purchase made diversified risks
To been diversified in to too many businesses may lead lost the brand name or the total value of the company.

Improper management of post acquisition or post merger,
After the merger or acquisition the companies may feel it’s not run properly or as their expectations.

Financial options of Acquisition or merger
Payment through cash
The payment through the cash is not practically follows because of shortage of cash [liquidity]. But only benefit of payment method is to getting maximum benefits of acquisition or merger.

A Share exchange
This is where the exchanging the acquirer company shares instead of acquire company shares. This approach is dealing without any cash transaction. But while the time existing shareholders of acquire company enjoy the ownership undisrupted.

Conclusion
In practical situation of the merger and acquisition are fail of 95%. Because the mergers or acquisitions are may not according with the organizational mission and vision statements. When the understandability and sharing the information’s within the merger or acquired companies not efficient the chance of failure is high.

In practical the financing options are not purely cash or shares. It’s happen with mixing percentages such as 50:50, 40:60 or 60:40.

Therefore the merger and acquisition companies should understand “their purpose of the business and what business are they in?”

Rational Planning Model [RPM]

The rational planning model is a model commonly uses for the business evaluations and strategic decision making purposes. Specially in CIMA examination focus rational planning model as a critical subjects for management students.

But there are only few points to be remembering for rational planning model. The subject of Enterprise strategy [E3] and enterprise management [E2] are mostly focus on rational planning model.

Its containing of

Mission and Objectives
Position Audit
Environmental Analysis
Co-operate appraisal
Strategic option generation
Strategic option evaluation and choice
Strategic implementation
Review and control
From review and control again continues with position audit and the environmental analysis.[its repeat the same process again and again]

Mission and Objectives
The mission and objectives are related to create the mission and objective of the organisations. When making the mission and objective the following should be considers,

Importance of Stakeholders and stakeholders power and interest
Key players, keep satisfied, keep inform, minimal efforts.

Cooperate social responsibility[CSR polices ],
Critical success factors [CSF].
Setting objectives for profit making organisations and non profit making organisations.
Environmental Analysis
The environmental analysis is analysis of the environmental factors how it’s help or affect the business environment. This is fully depending on the risk profile of the organisation.

Importance of business environments
PESTEL or PEST approach and Michel porter 5 Force theory,

Competitor analysis and reactions,
Environmental uncertainty,
Domestic and international environmental affects.
Position Audit
SWOT analysis,
Strengths, weaknesses, opportunities and threats.

Value chain analysis,
Primary activities and the secondary activities, how its help to identified the position of organisation.

Benchmarking approach,
Gap Analysis,
Scenario planning.
Resource based positioning.
Most of the positioning approaches are help the organisation to identify the internal capabilities of the organisation to develop their strategies.

Co-operate appraisal
The co-operate appraisal is a gathering point of the mission and objectives, position audit and the environmental analysis.

In the co-operate appraisal the organisation considering their internal, external factors are according with their mission and vision statements. After the success of elevations, it will lead to strategic option evolution level.

Strategic option generation
The strategic options are a pool of options. These options are indentifies and suggested by the different levels of management and the individuals. The collections of the strategic options are evaluated by the senior level management before it suggested to the top management to decide. Therefore the strategic options should be very carefully evaluate according to the mission and vision statement.

Strategic option evaluation and choice
It’s the level to evaluate the strategic options collected by the above stage. It’s should consider the following approaches,

3 generic strategy of Michel porter.
Cost leadership, differentiation and focus.

Ansoff’s Matrix,
Market development, product development, penetration and diversification.

Alternative growth approaches,
Internal approach and external approach.

Options for non profit organisations.
Evaluations,
The strategic option evaluation activities are to select the suited strategy rather than best strategy.

Strategic implementation
The implementation of the strategy is like the project planning approach. This implementation activity is shown a success of the position of the chosen strategy.

Performance measures of the strategy,
Key mile strong and gates,
Financial evaluation of the businesses.
Value addition of the strategy,
There are not specific approaches to elevate the strategic implementation; the success in of the implementation will depend on the success of the project completions.

Review and control
The review and control is an activity of the evaluate the strategic decisions are following the basis of mission and objectives or not,

Comparison between the actual performance and the expected performance.
Alternative approaches for proper control mechanism,
Budgets and the performance,
Stakeholders satisfactions,
Needs of the amendments or adjustments.

Conclusions
The rational planning approach is continues process. The same steps are moving again and again, which develops to the organisation to be efficient and effectiveness.

How to analysis a case study?

Secret of success
Before read the case study everyone should understand the answers in the scenario. The person who understands the case correctly wins the battles.

How to analysis a case?
Understand the basis
Student should understand what the industry is case is, and what is the history of the case contents.

For examples if the case is talk about the airport industry, the student should know, some background knowledge about the airport management [practical and academic] and she or he should be understand the history of that airport which given in case.

The understanding of the history will help the student to, develop suitable strategies to the case or understand what short of risk that company is facing.

Understand the Vision, Mission and Objective of the case.
The student should understand what are the vision, mission and objectives of the organisation given in a case.

The organisational long terms strategies are depend on their mission and vision statements. Therefore it’s necessary to the student to understand it.

Understand the industrial or organisational life cycle

To identifying the organisational or industrial life cycle, will help the student to understanding what kinds of strategies should adopted to the case related business.

This life cycle providing a clear picture to the student about, whether they looks for short life cycle or long term life cycle.

Understanding the issues or problems
To understand the correct problem is the critical success factor to pass the exams.

Understand the factors made issues to the organisation.
1. The student should understand the rationale behind the problems of the organisation faces, same time he or she should be investigate the main problems of the organisation.

2. Once the problem or issues identified, the student should question him or her self’s, how the problems will be solve in short term and long terms.

3. Once identifying the short term problems. It’s necessary to classified it to how to important and immediate is that problem is. The weight age will be given according to important and immediate. And says how to solve it and what kind of strategies to undertaken.

Understanding the long term issues
To understanding to long term problems will be help the students to write about the following question or approaches.

1. How these issues are arises?

The student should understand how these issues are arising, and what the base of these issues is.

2. How its affect to the current operations and the systems?

It’s good for student to understand how these problems are affecting our current operations and the systems. And understanding of how its effect the stakeholders, also important to make decision making.

3. What are the opportunity methods are available to the organisation to solve these problems.

4. Student should question their selves as

a. What are the strategies can adopt to solve those problems?

b. How long will take to solve these problems?

c. What is the projected budget for problem solving strategies?

d. What are the losses due to these problems?

Suggested decisions
This is a very important part of the case study. What are the decisions we taken with the limited available information. And how successfully we analysis and get the correct problems of the organisation or industry.

Because most of the examiners are expecting one suggested answer than the 2 or 3 options give to them. The selected decision or answer should be clearly explaining with the all the following aspects,

1. Financially beneficial or not [viability of success]?

2. Is the decision according to the mission and vision of the organisation or objective?

3. What are the internal factors will be consider to taking decisions?

4. What are the external factors should consider to taking decisions?

5. How the decisions are accordance with changes organisational culture and structure?

6. Is it providing a permanent solution to the organisation or a temporary?

Additional factors which is to considers

Critical success factors of the organisation
Value addition activities of the organisation
Keep performance indicator[KPI’s] of the organisation
Financial ratios of the organisation
Financial potions and performance of the organisation
The inflation and interest rate of the organisation
Foreign currency risk of the organisation
Banks and hedging dealing of organisation
Risk profile of the organisation
Working capital policy of the organisation
Cultural and social factors of the environment
Etc…

Short and sweetly
Whatever the analysis we made all the answers are given in scenarios. Therefore as a student we identified the answers separately and given back the same background to the examiner again.