ZIMSEC A Level · Business Studies · Form 6
Strategy is the long-term plan to achieve the business's objectives.
Strategic analysis
- SWOT analysis: internal strengths and weaknesses; external opportunities and threats.
- PESTLE analysis: political, economic, social, technological, legal and environmental factors (e.g. exchange rate changes, power shortages, mobile-money growth).
- Porter's five forces: rivalry, threat of new entrants, threat of substitutes, buyer power and supplier power.
Strategic choice
- Ansoff's matrix: market penetration (low risk), product development, market development and diversification (highest risk).
- Porter's generic strategies: cost leadership, differentiation, or focus.
- Decision trees: expected value = Σ(probability × outcome) to compare options under risk.
Worked example: Option A: 60% chance of US$100 000 profit and 40% chance of a US$20 000 loss. Find the expected value.
EV = 0.6 × 100 000 + 0.4 × (−20 000) = 60 000 − 8 000 = US$52 000
Strategic implementation
Change management (resistance to change, Kotter's steps), corporate culture, contingency planning and crisis management.
Exam tip: Use at least one model (Ansoff, Porter, SWOT) in strategy essays – and evaluate its limitations.
Check yourself
- Which Ansoff strategy has the highest risk?
- Name Porter's five forces.
- Give two reasons why employees may resist change.
Show answers
- Diversification.
- Rivalry, threat of new entrants, threat of substitutes, buyer power, supplier power.
- Any two: fear of job loss, uncertainty, loss of status, lack of skills, poor communication.
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