CQP Advanced Level

Strategy and Governance cheat sheet

Every chapter's key points, formulas and definitions on one page, for the last week before the exam. Each heading links to the chapter that explains it.

Introduction to strategy

Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences, with the aim of fulfilling stakeholder expectations.
Strategy exists at three levels: corporate (which businesses to be in), business (how to compete in one market) and operational (how resources, processes and people deliver the other two).
Section 143 of the Companies Act, 2015 requires a director to promote the success of the company for the benefit of its members as a whole, having regard to long-term consequences, employees, business relationships, community and environment, reputation, and fairness as between the directors and the members.
Strategic decisions are non-routine, uncertain, integrative and hard to reverse, so they cannot be made by rule and are reserved to senior management and the board.
The strategy schools contradict each other because each answered the failure of the last: Porter places advantage in industry position, the resource-based view in what the organisation owns and can do.

Key terms

Direction: Where the organisation is going. Expressed through mission, vision and objectives, and made real by the choices that follow from them.
Scope: How far the organisation reaches: which products, which markets, which geographies, which activities it performs itself and which it buys. Deciding scope is deciding what business you are in.
Advantage: Why customers choose this organisation rather than a rival. Without an answer, there is a plan but no strategy.
Changing environment: Strategy is made against a moving background. A position that was advantageous is competed away, which is why sustaining advantage is a separate problem from creating it.
Resources and competences: What the organisation has and what it is good at. Strategy that ignores capability is aspiration.
Stakeholder expectations: Whose interests the strategy serves. This is the point at which strategy and governance meet.
Mission: What the organisation is fundamentally for, expressed as its purpose. Answers why we exist.
Vision: The desired future state. Answers what we want to become.
Values: The principles that constrain how objectives may be pursued. They are meaningful only where they rule something out.
Objectives: Specific statements of what is to be achieved, quantified and time-bound where possible.
Strategic capability: The resources and competences that permit the organisation to survive and prosper.
Business model: How the organisation creates, delivers and captures value.
Control: The monitoring of progress and the adjustment of action or objectives that follows.

The rest of the sheet covers

Competitive advantage and the strategy lenses
The environment and competitive forces
Strategic capability
Purpose, governance and stakeholders
Strategic drift and history
Culture and strategy
Business level strategy
Sustaining advantage and competitive response
Corporate level strategy
International strategy
The strategy development process
Organising for implementation
Resourcing strategies
The practice of strategy
The board and strategy oversight
Measurement, reporting and shareholders
Exam technique and revision
Glossary
Table of cases