Nearly every organization is grappling with huge strategic challenges nowadays. They play a decisive part in the success of the organization. These challenges are driven by the organization’s position in front of its competitors providing comparable products. Strategic challenges are external, but they can be faced internally as well.
External strategic challenges can be referred to as the needs of the customer or market, changes in product or technology or financial and societal risks and needs.
Whereas internal strategic challenges may relate to an organisation’s internal capabilities, workforce, and resources.
The following key points that need to be considered are
- The strategic and operational challenges must have become obvious within the last three years
- internal information must be used
- Relating to COVID-19 as the sole reason of all challenges is not enough
Strategic challenges are critical problems and questions that need immediate and correct answers to direct the business on the right course. A good analysis of the issue can help reach an optimum solution.
Operational challenges are the issues in an organisation that can produce waste and affect the efficiency of the company in a negative way. They can drain a company’s resources and hinder growth. They should be addressed by the management sooner than later to increase the value of the company.
The most common operational challenges faced by the companies are
- Out of control overhead costs
- Too much waste
- No performance monitoring
- Unstable cash flow
- Lack of planning
Students should identify all the possible strategic and operational challenges faced by the company over three years. It is crucial for a successful RAP that all these challenges need to have become evident in the last three years. All the solutions taken up by the management to address these issues should also be discussed in the RAP properly.
The impact on the financial and operational performance of the business should also be discussed with the help of suitable models.
The feedback from the mentor is of extreme importance to tackle this new topic in 2022.
The following requirements must be met to complete your RAP in the most efficient way
- Selecting a suitable company that has faced strategic and operational challenges in the last three years
- Analysing the business and financial performance of the company for three years
- Evaluating the impact of the identified challenges on the financial and business performance of the company
- All the identified challenges must have been evident in the last three years
- Examining the solutions, the management used to address those challenges
- Creating a link between the challenges faced and the performance of the company
Key success factors
Following are the main points that need to be considered for a successful RAP submission
- Selecting a suitable company that has faced some serious strategic and operational challenges
- Identification of the strategic challenges faced by the company
- Identification of the operational challenges faced by the company
- Assessing the impact of the strategic challenges on the performance of the business
- Assessing the impact of the operational challenges on the performance of the business
- Assessing the solutions used by the management to address those challenges
- Creating a link between the challenges and the performance of the company over a period of three years.
- Access to the internally generated information
- Permission from the management to use the internally generated information
- In-depth knowledge of all the challenges whether strategic or operational
- In-depth knowledge of the impact of these challenges on the success of the company
- Demonstrating a clear understanding of the industry and its competitive peers
- Adequate application of the selected goals and objectives that were set at the beginning of the RAP in the proper sections of RAP
- The implementation of the correct research methodology to get reliable results on all the selected goals and objectives that were put in place at the beginning of the RAP
- Keeping the discussion logical by keeping all the objectives in mind
- Using reliable and appropriate sources for data gathering
- Properly referencing the information gathered according to the Harvard referencing style as told by the OBU.
- Usage of suitable business models to study various aspects of employee behaviour and its reasons
- A comparison to another organisation or the industry sector average
Accounting and Business models
For the strategic analysis of the external environment, the following models can be used:
PESTEL: A PESTEL analysis is an acronym for a tool used to identify the macro (external) forces facing an organisation. The letters stand for Political, Economic, Social, Technological, Environmental and Legal. It is an extremely popular model used by management for strategic planning and also for risk management
Porter’s five forces model: It is a model that identifies and studies five strong forces that make every industry and helps determine an industry’s weaknesses. For the strategic analysis of the organisation’s position, the following models can be used
SWOT: SWOT model can be used to study the before and after 3 years changes in the company’s performance. It is a situational analysis or assessment that helps us to study the strengths, weaknesses, opportunities, and threats that are related to the company under consideration.
Value chain: A value chain is a step-by-step business model for transforming a product or service from idea to reality. Value chains help increase a business’s efficiency so the business can deliver the most value for the least possible cost. Five steps to developing a value chain analysis
- Step 1: Identify all value chain activities.
- Step 2: Calculate each value chain activity’s cost.
- Step 3: Look at what your customers perceive as value.
- Step 4: Look at your competitors’ value chains.
- Step 5: Decide on a competitive advantage.
Business canvas: It is a strategic tool used by the management to study the existing models and create new models. Through a business canvas, you can present the information in a simpler and engaging manner.
Apart from the SWOT and PESTEL, this topic can also be analysed with the help of financial ratios. A good financial analysis is crucial to the passing grade of the RAP. Financial analysis refers to the usage of financial data to access a company’s performance and make recommendations about how the company can go forward. The most suitable is ratio analysis.
RATIO ANALYSIS: It is a quantitative method of gaining insight into a company’s operational efficiency, profitability, solvency or liquidity by studying its financial statements such as the balance sheet and income statement. The types of ratio analysis include profitability ratios, liquidity ratios, solvency ratios, turnover ratios and earnings Any of the ratios can be used to analyse the financial position of the company over some time.
Relevant KPIs can also be used to better analyse this topic. KPIs are the key targets you should track to make the most impact on your strategic business outcomes. KPIs support your strategy and help your teams focus on what’s important. Examples of key performance indicators related to topic 8 would be ‘sales growth rate’, ‘revenue concentration’, net profit margin, account receivables turnover and many more. There are many other KPIs that can be taken into account to judge financial and operational performance.
Many other models and modes of analysis can be used to produce a well-researched RAP with the help and guidance of your experienced mentor.
Possible limitations faced by the students while researching topic 8
The main aim of conducting research is to set up new facts or confirm the outcomes of the previous research. It enables us to gain new knowledge regarding the subject. However, while preparing for OBU thesis research students face many problems.
Some of the key limitations are as follows:
- Research method: Students need to have a clear understanding of the research methods. Mainly the research methods are not relevant or reliable as students are not trained in different methodologies. Simply replicating the knowledge available online or from different sources is not wise. There is a lack of basic knowledge regarding the correct methods of research.·
- Overlapping information: overlapping information is often obtained as a result of excessive research through different sources. Each source has its own story to tell. Students often get confused regarding the facts and statements
- Interaction between the subject company and student: Mainly there isn’t any proper interaction between the subject company and the student. This means that a substantial amount of data going into the thesis goes untapped. The key issues of the company can only be highlighted with the help of internal company management.
- : it is without a doubt that students need to complete their RAP before the deadline hits. Sometimes, the time limit can affect the quality of RAP very negatively. Students need to acknowledge this from the very start and set a schedule to be consistent with their research.
- Data collection process: The different ways of collecting data presents a strong limitation. If a student conducts an interview person to person or if he does it over the phone, both can have different effects on the interview. Hence, this data limitation must be reflected upon
- No access to internal management: It is essential that there is access to internal management as a detailed study on all the strategic and operational challenges is only possible with the help of an internal source
- Lack of information: Students may find it hard to find relevant information through secondary sources as there is not much information regarding the company’s internal challenges and affairs
Suitable organization for topic 8
The most suitable organisation is the one that has faced some tough challenges related to its operations and those challenges have become evident over the last three years. Selecting a company that is established enough so that its performance and financial position to be studied over some time is necessary. To make a high-quality RAP, it is essential that students choose a company whose operations are easily understood by the student, and he can make connections between various topics.
The following factors should be kept in mind while choosing a company for RAP:
- The general interest of the student in the company
- The amount of information available for the company
- Access to the internal management of the company
- Access to reliable secondary sources of information
- Familiarity with the industry sector associated with the company
The most appropriate organisation for topic 8 would be the ones that have successfully overcome the hardships and challenges that came in their way over the last few years.
Suggested approach for topic 8
Before starting your research, you should understand the assignment. The guidelines mentioned in the information pack should be read. The word count and length should be looked upon. What kind of sources are required by the topic, primary or secondary? This topic requires the use of internally generated or primary information. Secondary information could be used. The style of citation ‘Harvard referencing’ should be understood by the students. All the other requirements and directions made by the OBU must be complied with. After choosing this topic, a proper mind map must be made from the start, so the student conducts all the required tasks in a proper and timely manner. All the major requirements and aspects of the topic should be considered thoroughly so that a strategy can be devised to meet those requirements. A research methodology and all reliable websites and authentic sources should be noted down. The style of referencing must be kept in mind while researching this topic in order to pass the OBU RAP. A comparison organisation might be helpful for topic 8.
In Part 1– (Research objectives and overall research approach), Students need to make a table of contents and a title page mentioning the ACCA reg number and the selected topic. Part 1 mostly contains the introduction and the objectives of the RAP. The objectives should be consistent with the research of the project. Your personal aims and goals are not required to be a part of this section. The reasons for selecting the topic must be jotted down. The organisation which is suitable for topic 8 and why that organisation was deemed appropriate for the topic. The aims and objectives of the project should be explained in a number of points. Research questions are written in detail, and it targets the specific areas that need to be researched. Usually, there are 3 or 4 research questions. Consideration of all these points is important in part 1. If you follow all these instructions, you can move very strongly ahead.
Part 2- (Information gathering/accounting and business techniques) This section requires the application of all suitable models and listing down their limitations. it is crucial that you understand all the relevant models before their application to this topic. A quality explanation of the used models or any other frameworks and analysis of all their possible limitations must be performed. The most efficient way of writing section 2 is by first mentioning the sources of information that were used to acquire the data for research on topic 8. Topic 8 relates to the major challenges that took place in any company so both internal and external information can be used. Students are advised to select only those resources that they can understand easily. Primary resources like interviews of employees, and details of all challenges must be written down. secondary resources like the annual reports of the company and articles should be used. Any ethical issues that arose during information gathering and your solutions regarding the issues. Every part should be backed up by good references. Next, you would list down all the business and accountancy models and their possible limitations. PESTEL is a model that can be used effectively to study the external challenges faced by the company while SWOT can measure the internal challenges. To find out more about the selection of respective models for topic 8, kindly refer to section ‘Accounting and business models for topic 8’ above. Word count is to be prioritized which is 1800-2000 words.
In part 3, there is a further evaluation, analysis and conclusion. It should contain a description of the results obtained and all the limitations. Comparison with another organisation can be very helpful. It is a critical section, and most students fail in it if they are not in the hands of an experienced mentor. Evaluation and analysis of topic 8 mean you need to explain the financial performance with the help of ratios and compare those ratios over the three-year time period. These ratios must represent the before and after effects of changes. The financial trends must also be studied and presented in the form of graphs. A little description under every graph must be given. Increase/decrease in profits, revenues, cash flows, working capital cycle, and EPS can be evaluated. The effect of challenges on the profitability, gearing and efficiency of the company must be presented. In this way, your financial analysis will be very extensive. The answers of the company to all its challenges and your recommendations should be a part of this section. It should comprise 4500 words for an extensive analysis.
Every student takes his approach regarding the given topic, and this is only a very broad version of what can be done. The detailed approach depends on the student’s perception of the topic and the sources of information being used. Whatever approach is taken; the guidance of the project mentor is needed every step of the way to pass RAP with good grades.
Suggested approach for SLS
For writing SLS, you should plan your meetings with the mentor in the beginning and record everything that you learn. Make notes of your meetings and specify all the learning points. These notes will help you demonstrate your learning along the process. A timetable must also be devised to ensure that RAP is completed timely. SLS can be passed effectively by answering the questions set forth by OBU. Too much description of events can lead to failure. Make sure you stick to the questions. Consulting with your mentor on all the key issues is very important.
Sources of information
There are mainly two types of sources that can be used, primary and secondary.
Primary sources are the data that you collect on your own and it is considered first-hand. This can be done by conducting interviews, surveys, or having participants fill in questionnaires. In this topic, students can gather information directly from the management which will qualify as a primary source of information. If the primary source cannot be collected then students should choose any other topic.
Secondary information on the other hand refers to already available and published information. Using it to your own advantage by checking the authenticity of these sources can be very beneficial for the RAP. All other sources of information such as online websites, journals, and articles are considered secondary sources of information. Annual reports of the company should also be studied. For using a secondary source, the reliability must be checked, and then the information should be put in the RAP. This topic can be carried out well only with the help of secondary information.