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CMA Intermediate · Operations Management and Strategic Management

Strategic Analysis and Strategic Planning for CMA Inter

Strategic analysis studies the external environment (PESTEL, Porter's Five Forces) and internal strengths (SWOT) to see where a firm stands. Strategic planning then uses that picture to set direction and choose corporate and business strategies, with tools like the BCG and GE matrices. Answer by naming the framework, applying it to the case, and concluding.

What this chapter covers

This chapter in Paper 9 is about how an organisation decides where it is going and how it will get there. It begins with the strategic management process and its three levels: corporate, business and functional. It then covers direction-setting through vision, mission, goals and objectives. The next block is analysis: the external environment through PESTEL, the industry through Porter's Five Forces, and the internal position through SWOT.

The second half moves from analysis to choice. Portfolio tools such as the BCG Matrix and the GE Matrix help a diversified firm decide which businesses to back. Corporate strategies (growth, stability, retrenchment) answer what business the firm should be in. Business strategies and competitive advantage answer how it should compete in each business.

The chapter is the base for the rest of the paper. Strategy implementation, evaluation and control only make sense once you know how a strategy is formed. The operations side of the paper also supports the strategy: operations decisions on cost, quality and speed are how a firm builds its competitive advantage. Read this chapter as a chain: analyse, set direction, choose, then compete.

This chapter is mostly conceptual, so it rewards clear understanding rather than long calculation. Frameworks like PESTEL, Porter's Five Forces, SWOT and the BCG Matrix are easy to learn and can be asked as short MCQs or as full descriptive answers, including case-based questions where you apply a framework to a business. Students who structure answers well can earn steady step marks here. The same vocabulary is reused in later chapters, so time spent here lowers the effort needed elsewhere in the paper.

Strategic Analysis and Strategic Planning: topics in the order to study them

  1. 1Strategic Management Process and LevelsIt gives the big picture and the terms that every later topic builds on.
  2. 2Vision, Mission, Goals and ObjectivesDirection-setting is the first stage of the process, and you need to separate these four terms before analysis.
  3. 3Environmental Analysis and PESTELYou study the wide external environment first, before narrowing down to one industry.
  4. 4Industry Analysis and Porter's Five ForcesIt narrows the external view to the competitive forces in a single industry.
  5. 5Internal Analysis and SWOTSWOT combines the external findings with internal strengths and weaknesses, so it comes after both.
  6. 6Strategic Planning Tools: BCG Matrix and GE MatrixThese tools use analysis to judge a portfolio of businesses, so they follow the analysis topics.
  7. 7Corporate Strategies: Growth, Stability and RetrenchmentWith the portfolio view clear, you can see why a firm picks expansion, holding or cutting back.
  8. 8Business Strategies and Competitive AdvantageIt ends the chain by showing how a firm competes within each chosen business.

How to prepare Strategic Analysis and Strategic Planning

Treat the chapter as one connected flow rather than eight separate lists. Aim to explain each framework in your own words and apply it to a company you know.

  1. Read the topics in the study order and draw a one-page flow: process, direction, external analysis, internal analysis, tools, corporate strategy, business strategy.
  2. For each framework, write its components from memory, then add one line on what each component means and one Indian business example.
  3. Practise PESTEL and Five Forces on two or three familiar industries, such as telecom, retail or airlines, so you can apply them quickly in case questions.
  4. Learn the BCG and GE matrices with their axes and the usual action for each category, and be ready to state when the tool is limited.
  5. Write answers in a fixed format: define, list the points with a brief explanation each, give an example, then conclude. This earns step marks in the 14-mark questions.
  6. Solve MCQs at the end of each topic. Since there is no negative marking, always attempt every MCQ and eliminate the options that clash with the definition.
  7. Revise by redrawing the flow chart and the key lists on a single page every few days.

Common mistakes in Strategic Analysis and Strategic Planning

  • Mixing up vision, mission, goals and objectives.

    Fix: Link each to one question: vision is where, mission is what and for whom, goals are broad aims, objectives are measurable targets.

  • Listing PESTEL or Five Forces headings without applying them to the case.

    Fix: After each heading, add one line using facts from the case or a real industry, and say whether it is an opportunity or a threat.

  • Placing internal factors under opportunities or threats in SWOT.

    Fix: Ask whether the firm can control the factor. If yes it is internal; if no it is external.

  • Reading BCG categories only by name and giving the wrong action.

    Fix: Fix the axes first, market growth and relative market share, then reason out each category and its usual strategy.

  • Treating corporate and business strategy as the same thing.

    Fix: Corporate strategy decides which businesses to be in and how much to invest; business strategy decides how to compete in one business.

  • Writing long unstructured paragraphs in descriptive answers.

    Fix: Use short headed points with a one-line explanation each, and finish with a brief conclusion.

Last-day revision: Strategic Analysis and Strategic Planning

  • Strategic management levels: corporate, business and functional.
  • The process runs from direction-setting through analysis and choice to implementation and evaluation.
  • Vision says where the firm wants to be; mission says what it does and for whom.
  • Objectives should be specific and measurable, while goals are broader.
  • PESTEL covers political, economic, social, technological, environmental and legal factors.
  • Porter's Five Forces: rivalry, threat of new entrants, threat of substitutes, buyer power and supplier power.
  • SWOT: strengths and weaknesses are internal; opportunities and threats are external.
  • BCG Matrix uses market growth and relative market share to place businesses as stars, cash cows, question marks or dogs.
  • GE Matrix uses industry attractiveness and business strength and has more factors than the BCG Matrix.
  • Corporate strategies: growth, stability and retrenchment.
  • Business strategies aim at competitive advantage, for example through cost leadership, differentiation or focus.

Strategic Analysis and Strategic Planning practice questions

Strategic Analysis and Strategic Planning in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Strategic Analysis and Strategic Planning: frequently asked questions

Is this chapter more theory or numerical?

It is mainly theory. You are tested on definitions, frameworks and applying them to short cases. Expect both MCQs and descriptive questions.

Which frameworks should I learn first?

Start with the strategic management process, then PESTEL, Porter's Five Forces and SWOT. These are the base for the planning tools and strategy choices that follow.

How do I answer a case-based question on this chapter?

Name the framework, apply each of its parts to the facts in the case, and end with a short conclusion or recommendation. Using the case's facts is what earns the marks.

Should I attempt every MCQ in Section A?

Yes. The question papers do not provide for negative marking, so attempt all 15. Eliminate options that contradict the definition and choose the best of the rest.