Understanding Strategy: A Simple Guide (Article)

This article aims to explain the concepts of strategy development, goal setting, and strategic implementation. To achieve this, we present a case study of Kai, a Postgraduate Applied Accounting Science student at UNISA. Kai exemplifies academic excellence while running a distinctive textbook business that serves his fellow students. His enterprise offers far more than standard textbooks; it includes specialised question banks that are consistently updated to reflect the latest assessment standards and incorporate the newest competency frameworks. These materials are authored by seasoned lecturers, lending substantial credibility and depth, thereby making them invaluable resources for fellow students. This business not only supports Kai financially but also significantly enhances his educational experience, providing a practical platform for him to apply the strategic concepts learned in class directly to entrepreneurial activities.

Strategic Foundations: Vision, Mission, and Strategy

• Vision: Kai’s vision outlines what he intends to accomplish: becoming a Chartered Accountant and a knowledgeable business consultant.
• Mission: His mission clarifies why he is driven: aiming to amass a wealth of knowledge and practical skills that will empower him to influence and innovate within the financial sector.
• Strategy: This describes how Kai plans to achieve his vision, incorporating a detailed, actionable plan that leverages both his academic studies and his business operations.

Application of Strategic Management Tools

Kai employs a range of strategic tools to enhance both his academic and business endeavors:

SWOT Analysis:

• Strengths and Weaknesses (Internal): Kai’s analytical prowess and innovative use of technology are his strengths, while his time management struggles amidst a tight schedule pose a weakness.
• Opportunities and Threats (External): Kai identifies the growing demand for Chartered Accountants and increased opportunities for professional development through networking events and seminars as key opportunities for growth. On the other hand, AI technologies pose a significant threat as they are increasingly capable of automating complex accounting tasks traditionally performed by professionals, potentially reshaping the job market and the roles of future CAs.

PESTEL Analysis: Kai broadens his strategy by considering external factors that influence both his studies and business. He calls this an "industry analysis" :) :

• Political and Legal: He keeps up with educational policies and accounting standards that might affect what he learns and how he runs his business.
• Economic: Kai stays informed about economic trends to spot shifts in the job market and potential business opportunities in different accounting areas.
• Social: He engages with current trends around work-life balance to ensure he takes care of himself while juggling his studies.
• Technological: He makes good use of modern educational tools and resources, keeping his skills sharp with the latest accounting software.
• Environmental: Kai incorporates sustainable practices into his business, reflecting the growing importance of environmental awareness in today’s marketplace.

VRIO Framework Application in Kai’s Business

Kai is targeting to enrol for a top 10 spot in his studies. He applies the VRIO framework to analyse and leverage the resources of his textbook business to create and sustain a competitive advantage:

• Value: The specialised question banks provide immense value to students as they are directly aligned with current educational standards and competencies required for success in exams. By offering content that enhances students’ ability to perform well in their courses, Kai’s business helps customers achieve better academic results, which translates into higher revenue and customer satisfaction for his business.
• Rarity: The question banks Kai offers are rare in that they are authored by top-notch lecturers known for their expertise and teaching prowess. This exclusivity makes his products scarce and sought after, as no other competitor provides materials that are as closely aligned with the latest changes in the curriculum and delivered by such esteemed professionals.
• Imitability: The difficulty of imitating Kai’s textbooks lies in the unique combination of up-to-date, relevant content and the prestige of the authors involved. Competitors would find it challenging to replicate this blend, as it requires access to skilled lecturers who are willing and able to create similar quality content. Furthermore, the ongoing updates and incorporation of the latest assessment standards necessitate continuous investment in content development, which is both time-consuming and costly.
• Organisation: Kai’s business is well-organised to exploit these valuable, rare, and hard-to-imitate resources. He has established effective relationships with these lecturers, ensuring a steady flow of current and authoritative content. His operational processes, from content creation to marketing and sales, are structured to highlight the uniqueness and academic value of his textbooks, which optimises the overall effectiveness of his resources.

Porter’s Five Forces Analysis in Kai’s Business

Understanding the competitive environment through Porter’s Five Forces further enlightens the strategic competitive positioning of Kai’s textbook business:

• Threat of New Entrants: While new competitors could enter the market with generic educational materials, Kai’s specialised question banks, backed by Tiptop CA lecturers, set a high barrier due to the unique product offering and the reputation of the authors.
• Bargaining Power of Suppliers: Kai mitigates supplier power by maintaining a strong partnership with Tiptop CA lecturers, ensuring mutual benefits and exclusive content delivery, which secures his supply chain.
• Bargaining Power of Buyers: By offering high-quality, specialised content that significantly aids in exam preparation, Kai reduces the bargaining power of buyers as they have limited alternatives that match the specificity and quality of his products.
• Threat of Substitute Products: The threat from digital substitutes is countered by offering Kai’s question banks in both physical and digital formats, accommodating various student preferences and enhancing product accessibility.
• Rivalry Among Existing Competitors: Kai differentiates his products through quality and relevance, allowing him to compete on aspects other than price and reducing the intensity of direct competition.

Conclusion: Strategic Insight and Business Leadership

Kai’s mastery of strategic tools prepares him for academic excellence and also lays a solid foundation for future business leadership. Understanding and applying these strategies enable Kai to make informed decisions about resource allocation, market positioning, and growth opportunities. These competencies are essential for any business leader, particularly in finance, where decisions impact funding, investing, and value creation.

Through his academic and business activities, Kai exemplifies how strategic management principles are crucial for achieving both personal and professional goals. His story is a powerful illustration for aspiring accountants, showing that strategic thinking enhances business and decision-making acumen, and drives success in the competitive world of business and finance.

Purpose of This Article

This article was written to introduce a level of relatability for students, enabling them to grasp what strategy fundamentally addresses. Through Kai’s narrative, we explore how strategy encompasses all the actions and decisions he employs to fulfill his mission (Purpose). In his vision (Where he wants to go/what he wants to become), Kai sees himself achieving a distinct professional identity; achieving this would mean his mission would be possible. Reflecting on Kai's strategic approach may prompt you, as a PGDA student, to consider how your own strategies align. How do you strategise (How to get there) to accomplish your goals? This comparative exploration aims to deepen your understanding of strategic planning in both academic and professional contexts.

Written by Ivyne Denis CA(SA)