This lesson covers the foundational elements of the strategy process as defined in the CIMA E3 syllabus. It examines the purpose of strategy, the different types and levels of strategy, and how to analyse the organisational ecosystem to inform strategic decision-making .

 

  • Purpose of Strategy: Strategy is the long-term direction and scope of an organisation to achieve advantage through its configuration of resources within a changing environment. The CIMA E3 syllabus begins by outlining the “Purpose of Strategy” and “The Types and Levels of Strategy” . Understanding the purpose is the starting point for any strategic management accounting activity.

  • Analysing the Organisational Ecosystem: The CIMA E3 syllabus devotes a full module to “Analysing the Organisational Ecosystem” . This involves:

    • Elements of the Ecosystem: Identifying and understanding the key players and factors in the organisation’s environment, including competitors, customers, suppliers, regulators, and technology providers .

    • Drivers of Change: Analysing the forces that are reshaping the ecosystem, such as technological disruption, regulatory shifts, and changing consumer preferences .

    • Impact of the Ecosystem on Organisational Strategy: Evaluating how the external environment influences the organisation’s strategic options and constraints .

  • Strategies for Generating and Evaluating Options: The next stage in the process involves “Generating Strategic Options” and “Making Strategic Choices” . This requires SMA to provide relevant financial and non-financial data to evaluate different strategic directions. This may involve competitor accounting, strategic financial analysis, and strategic financial planning .

  • SMA as a Decision Support System: SMA acts as a decision support system, with critical success factors being a key element of its analysis . It helps answer “what-if” questions and provides the quantitative foundation for strategic choices .

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