CPA Australia GSL cheat sheet

Global Strategy and Leadership: Core Frameworks and Decision Rules

• Industry attractiveness (Porter's Five Forces): rivalry rises with low concentration, high fixed costs, low switching costs, and low exit barriers; buyer power rises with concentration, undifferentiated inputs, and credible backward integration; supplier power rises with few substitutes and high switching costs; threat of entry rises when capital needs, scale economies, and regulation are low; substitutes cap price ceilings by offering comparable function at lower cost.

• PESTLE is a scanning checklist, not an analysis: each factor must be linked to a specific impact on demand, cost, or competitive position, otherwise it adds no strategic content.

• Value chain margin equals customer willingness to pay minus total cost of all value activities; competitive advantage arises from performing activities differently (differentiation) or at lower cost (cost leadership), not from activity presence alone.

• VRIO decision rule: a resource yields sustained advantage only if Valuable, Rare, costly to Imitate, and the firm is Organised to capture value; missing V or R gives parity or disadvantage, missing I gives temporary advantage, missing O gives unrealised advantage.

• RBV boundary conditions: resources must be heterogeneous and imperfectly mobile; dynamic capabilities (sensing, seizing, transforming) explain advantage renewal when static resources decay.

• Generic strategy must be internally consistent: cost leadership requires scale, standardisation, and tight cost control; differentiation requires premium price recovery exceeding the cost of uniqueness; stuck-in-the-middle arises when cost structure and perceived value both fail to lead.

• Corporate parenting test: a parent adds value only if it understands the unit's business, adds distinctive resources or linkages, and the net benefit exceeds parent costs and value destruction from bureaucracy.

• Strategy hierarchy: corporate strategy sets portfolio and scope, business strategy sets competitive position, functional strategy aligns operations; misalignment between levels is a common cause of execution failure.

• Ansoff growth matrix maps market/product newness to risk: market penetration (lowest risk), product development, market development, diversification (highest risk); related diversification exploits shared resources or value-chain fit.