ICAG L3 Strategic Case Study key terms

A structured scan of political, economic, social, technological, environmental and legal forces that shape an organisation's external environment, used to identify opportunities and threats before strategy is chosen.

A framework assessing industry attractiveness through rivalry among existing competitors, threat of new entrants, threat of substitutes, supplier power and buyer power, helping judge where profit pools sit.

Grouping competitors that share similar strategies or market positions so a candidate can map competitive space, spot mobility barriers and identify white space or convergence between groups.

Breaking the business into primary and support activities to see where cost is incurred and where customer value is created, revealing which activities should be kept, outsourced or redesigned.

A bundle of skills and technologies that is hard for rivals to copy, can be applied across several products or markets, and contributes directly to perceived customer benefit.

An attribute or capability that lets a firm deliver superior value or lower cost than rivals and sustain that gap, usually rooted in cost leadership, differentiation or focus.

A broad route to competing, such as overall cost leadership, differentiation or focus on a narrow segment, chosen to align the firm's activities with how it wins customers.

A two-by-two grid of products and markets producing market penetration, product development, market development and diversification, used to classify growth options by risk.

The degree of consistency between a proposed strategy and the organisation's resources, capabilities, culture and external environment, tested before options are recommended.

A test of strategy options against suitability (does it address the issue and fit the environment), acceptability (risk, return and stakeholder reactions) and feasibility (resources, skills and funding).

A short public declaration of why the organisation exists and whom it serves, setting the boundaries within which objectives and strategies are later formulated.

A goal framed to be specific, measurable, achievable, relevant and time-bound, so that performance against the strategy can later be monitored and judged.

A performance system measuring financial, customer, internal process and learning perspectives together, linking day-to-day measures to the strategic objectives they are meant to deliver.

A key performance indicator: a small number of measures chosen because they signal whether a critical success factor is being achieved, with targets and owners attached.

The few things an organisation must do well for its strategy to succeed, used to decide which measures matter and where management attention should concentrate.

The conflict that arises when managers acting for owners pursue their own interests, such as growth or pay, rather than maximising shareholder value, requiring monitoring and incentives.

The system of board structures, controls and disclosures through which a company is directed and held accountable to shareholders and other stakeholders.

The amount and type of risk an organisation is willing to accept in pursuing its objectives, which sets the boundary for investment and operating decisions.

Plotting stakeholders by their power to influence and their interest in the outcome, so communication and engagement effort can be targeted where it matters most.

Varying one input at a time to see how far it can move before the decision changes, identifying which assumptions most deserve investigation and monitoring.

Building a small number of internally consistent future states and testing a strategy against each, useful where several variables may move together and uncertainty is high.

Net present value: the sum of expected cash flows discounted at the cost of capital, showing the value added in today's money; a positive figure supports acceptance.

Internal rate of return: the discount rate at which a project's net present value equals zero, compared with the cost of capital to decide acceptance.

Weighted average cost of capital: the blended required return on a firm's debt and equity, weighted by market values, used as the discount rate for average-risk projects.

Capital asset pricing model: required equity return equals the risk-free rate plus beta multiplied by the equity risk premium, giving a way to estimate the cost of equity.

A measure of how much a share's return moves with the market; a beta above one signals greater systematic risk and so a higher required return in CAPM.

The time taken for cumulative cash inflows to recover the initial investment, a simple liquidity and risk screen that ignores returns after the cut-off point.

Cash generated by operations after tax and reinvestment in working capital and fixed assets, available to be paid to lenders and shareholders or retained for growth.

Estimating enterprise value by discounting projected free cash flows at the WACC and adding a terminal value, then deducting net debt to reach equity value.

A relative valuation method dividing share price by earnings per share, or applying a peer multiple to the target's earnings to derive an implied value.

Valuing a business by reference to market multiples of listed firms with similar activities, growth and risk, with adjustments for size and control.

The proportion of debt in a company's capital structure, often measured as debt to equity or debt to total capital, which affects financial risk and WACC.

A condition in a loan agreement, such as a maximum gearing or minimum interest cover level, whose breach can trigger default or force renegotiation.

Using instruments such as forwards, swaps or options to offset exposure to interest rate, currency or commodity movements, reducing volatility in cash flows and reported results.

A situation where competing values or duties make every available action breach something important, requiring the parties, principles and consequences to be reasoned through explicitly.

A questioning mindset that does not accept assertions or forecasts at face value and seeks corroborating evidence before relying on them in a recommendation.

A concise corporate report explaining how strategy, governance, performance and prospects create value over time across multiple capitals, linking financial and non-financial information.