Notes: only five CSFs were required. Strengths:Successful companySteady increase in market shareExperience in the marketFounder's entrepreneurial skillsGood designsGood quality controlKeen to exploit to technologyStrong IT, Weakness:Management of information is often out of dateNo in-house IT expertiseNo web experienceNot sure if the new system will generate new salesLack of control over store managersOut of date reporting from some storesOver reliance on IT provider, Opportunities:E-trading can provide a new sales channel and revenue streamIdentification and recording of customer details to enhance customer relationshipsExtension of customer baseGlobal market potentialCut costs in many areasCreate a vision of a modern companyDevelop product range furtherLook at employing an IT specialist, Threats:Customer resistance to on-line shoppingLoss of unique identity; may become just another website traderResistance within the companyEffects on existing personnel and working conditionsCosts of developing the website may outweigh the benefitsSecurity issuesLoss of competitive edge. are usually based on a given set of assets and resources, do not usually involve the scope of an organisation's activities, rarely involve major change in the organisation. CSFs and KPIs will have a central role in the strategic planning process: Strategic planning is a long-term, top-down process. For quoted companies financial informationwill generally be reasonably easy to obtain, from published accounts andthe financial press. All the most up to date resources for CIMA tutors, including teaching guides, syllabus information, pre-seen exam materials and much more. The strategic management accountant will contribute to the acceptability and feasibility aspects in particular: 5.4 The role of corporate planning in checking towards the objectives set. 4.2 The strategic planning process (rational model). Strategic analysis, choice and implementation. The most common aspects of strategic decision making where management accounting is seen to make a significant contribution. 12 months of unlimited access to a library of recordings by leading subject matter experts on hot topics and more = one off fee. the expansion gap involves the development of a new product or market where as the diversification gap involves the development of new products and markets. Illustration 5 – Multinational companies, The development of multinational companies. The requestwas granted and the project yielded major insights in inventoryarrangement and order processing, resulting in major gains for Xeroxwhen these insights were adapted to its own operations. Copyright 2020. These are at a level below functional benchmarks. A multinational company will findthat even its own internal transactions are vulnerable to exchange ratemovements, currency exchange controls and the existence (or absence) ofinternational tax treaties. The decisions made can conflict with the short-term localised decisions: The whole concept of strategic planning explored earlier in thischapter implies a certain top-down approach. Due to unique designsand good quality control, the business now has ten stores in variouscities. production managers will be concerned with product quality and cost control. Often it is difficult to motivate managers by setting long-term expectations. (2) Competitive strategy, industry position and geographic location. It is only natural that local managers should seek personal advancement. Among the pioneers in the benchmarking 'movement' were Xerox,Motorola, IBM and AT&T. analysis of the cost of holding inventory under different options. Forexample, a straight comparison of resource deployment between twocompetitive organisations may reveal quite different situations in thelabour cost as a percentage of the total cost. Explore our extensive range of online CPD courses, videos and webcasts covering a wide range of practice areas. They yield thereasons for a functional performance gap. The best known is the Xerox Corporation. In contrast, the additional use of labour by oneorganisation may be an essential support for the special servicesprovided which differentiate that organisation from its competitors. 4 The role of strategic management accounting. She now wants toinvest in website development with the view of reaching global markets.