Strategic Issue vs Strategic Alternatives

Students often loose track of what the main issue is. Many people often read the case and right away write down each of the strategic alternatives as the strategic issues, which is not wrong in itself as each of the strategic alternatives is a strategic issue in a way but these are not the main issue that the company is facing. All of these strategic issues have something in common, and once you identify it, you will know what the main strategic issue is.

Examples of Strategic Alternatives:

• Diversify into health food products
• Expand into Europe
• Offer a new brand
• Introduce a new service

The main Strategic Issue may be to 'increase market share and profitability' and these strategic alternatives are the potential alternatives that are available for consideration in order to increase market share and profitability and hence address the main strategic issue.

You can look at it as the Strategic Issue representing the problem at hand, with the strategic alternatives representing the possible solutions.

In the 2012 CMA Case Exam, identify the Main Strategic Issue and then provide 4 Strategic Alternatives. It is important to list the Strategic Alternatives in priority order, starting with the most significant alternative.

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Essential Components of a Situational Analysis

The Situational Analysis is the single most important component of the 2012 CMA Case Exam. If you get this wrong and don't complete a proper and complete situational analysis, your entire case report will be based on incomplete or erroneous information. The analysis of the strategic alternatives as well as the recommendations are both based on the situational analysis - you will need to integrate the pros, cons and recommendations to the situational analysis. If you get it wrong, your integration, pros, cons and recommendations will all be poor.

The following are the essential components that make up a good situational analysis:

SWOT
List in point form, and under the appropriate headings, every single Strength, Weakness, Opportunity and Threat that you can identify in the 2012 CMA Case Exam Additional Information and Backgrounder. A preliminary SWOT has already been provided so there is no need to repeat points that were already included in the provided SWOT, but make sure to add a comment stating that this SWOT analysis is in addition to the one already provided.

Make sure you understand the difference between Strengths, Weaknesses, Opportunities and Threats:

• Strengths are internal (i.e. Experienced management, established brand, good reputation)
• Weaknesses are internal (i.e. High Employee turnover, poor morale, declining sales)
• Opportunities are external and relate to the industry as a whole (i.e. Strong economy, increasing incomes within the relevant demographic group, weakening competitors, bigger market)
• Threats are external and relate to the industry as a whole (i.e. Increasing competition, poor economy, changing consumer tastes)

Internal Analysis

• Briefly discuss the Strengths and Weaknesses that were identified in the SWOT and what this means to the company.
• Stakeholder Preferences - Identify every single stakeholder and their respective preferences. List them in order of importance.
• Constraints - Identify all relevant constraints. Two main types of constraints: Financial - i.e. maintain a certain Debt to Equity ratio, meet specified bank covenants. Non-financial - i.e. limited production capacity, limited shipping capacity
• Goals - i.e. sales levels to achieve, market share to capture
• Uncertainties - i.e. unstable economy, weather
• Risks - i.e. potential key employee resignations, strikes
• Mission and/or Vision Statement - If it is implied, put it into a proper Mission Statement format. If it is stated - don't just copy it into your report, be should to critique it.
• Internal Financial Analysis - Do not spend too much time on this. It is easy to get lost in calculating dozes of ratios and discussing them but you will be loosing precious time and gaining minimal marks for such a thorough analysis – focus only on financial analysis that will help with the main issues. Do a thorough financial analysis on the backgrounder and use these result to help you decide which ratios/areas to focus on once you get the 2012 CMA Case Exam Additional Information.
• Financing Available - Identify the financing available - list the amounts, conditions and sources of such financing (i.e. $2,000,000 through a line of credit at 2%, or $500,000 Bank Loan for capital projects)

External Analysis

• Briefly discuss the Opportunities and Threats that were identified in the SWOT and what this means to the company.
• Identify both the Key Success Factors (KSF) and the Key Risk Factors (KRF)
• Industry Assessment - provide a brief assessment of the Industry and what this means to the company (i.e. Industry financial performance trends, key competitors, potential replacement products, changing trends)

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Key to Effective Reading & Planning - CMA Case Exam

Reading the report is time consuming and often by the time you are done, you remember very little and are faced with a report full of endless highlights and side notations which are overwhelming. You end up sifting through the whole case again and again each time you are looking for relevant information relating to alternatives, swot, recommendations, etc. Often key facts that you marked in the case are forgotten and never even make it to the body of the report.

Try using the following steps - I have tutored numerous students using this approach and their feedback was unanimous - they were amazed at just how much time was saved and at how much more complete their report was.

1. Read the CMA Case Exam Additional Information very quickly once to get the overall idea of what you are dealing with
2. Open SecureExam and in the Word portion type up the complete outline with every single heading that you will need (i.e. Introduction, Strengths, Constraints, KSF, KRF, Financing Available, Strategic Alternatives, pros, cons, etc.) - do it in the proper order and do not miss any headings
3. Read the CMA Case Exam Additional Information for the second time but this time, do it thoroughly and as you identify each and every piece of information that is relevant to the case report (pros, cons, constraints, mission, stakeholder preferences, alternatives, strengths, threats, etc.) enter it right away under the appropriate heading - do this as you are reading the CMA Case Exam Additional Information, do not wait to enter this info into the report until after you finished reading as you will likely forget to include key facts.

This way by the time you are done going over the CMA Case Exam Additional Information for the second time, you will already have a large portion of the case exam already complete - sections like constraints, stakeholder preferences, SWOT, Pros and Cons will already be filled out in SecureExam in the headings that you have created earlier. Doing this also reduces the chance that you miss or forget information. See - you just earned marks and you didn't even have to start calculating or analyzing anything yet!

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