Strategic Audit: Core Competence, Functional Assessment, Five Ps of Strategy, Business Portfolio Analysis

This article discusses the concepts of strategic audit, including core competence, functional assessment, five Ps of strategy, and business portfolio analysis. It explains the criteria for developing core competence and the functional assessment for the strategical audit. It also discusses the five Ps of strategy and their utilization in strategic assessment, as well as the concept of business portfolio analysis and its role in strategical audit. The article concludes with the application of BCG matrix and McKinsey Growth share matrix.

STRATEGIC AUDIT

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Concept core competence and three criteria for developing core competence............................3
Comprehensive explanation of the functional assessment for the strategical audit.....................5
Five Ps of strategy and their utilization in strategic assessment..................................................6
Concept of business portfolio analysis and its role in strategical audit.......................................7
Application of BCG matrix and McKinsey Growth share matrix...............................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic audit is the system which helps in the identification of the extent of the
implementation of the company's strategies which are its purpose that helps the business in
reaching the goals. For this the organization want to draw a strategic plan which is considered to
be seeking an implementation of the plan which is considered to be unachievable towards the
company's message and goals. This project will explain the concepts of the strategic audit for the
members of a firm to understand. In this project an appropriate example of the concept of the
core competence with the characteristics and their brief discussion for the criteria of developing
core competence are discussed. This is the comprehensive explanation of the functional
assessment which is directly contributed to the strategic audit for the organization. This project
helps the business in the assessment of the premises, facilities, information technology and
individual skills. In this project the five Ps of strategy and their compliance with result to the
strategical assessment which can carry out the earlier. Concept of business portfolio analysis the
role of strategic audit. Explanation of the application of BCG matrix and McKinsey growth for
carrying out strategical audit.
MAIN BODY
Concept core competence and three criteria for developing core competence
The core competence is a concept which is about the resources and capabilities which can
consist of the strategic advantages for the business. The modern management theory is the one
that argues about the business for they must define, cultivation and exploitation of the core
competencies for ordering the success against the competition (Pidgeon, 2017). It is important
for the business to develop a variation of the principle which can have an emerging impact of the
recent years so that a recommendation which seeks the focus of their personal core competency

in order to stand out from the crowd can be used for the development of the characteristics of
some personal core competencies which include the analytical abilities for the creative thinking
that can result in resolution of the problem skills. The concept of the core competencies of the
business activity helps the business in focusing on the following core competencies,
 The activity which will be must for providing superior value or benefits to the consumers.
 The organizations activities and other operations need to be very difficult for the
competitors to imitate.
 For an organization the development of the rarity of the situation is essential as the
organization faces major difficulties in the management of the organization operations.
There are three main criteria which the organization needs to understand so that it can
analyse the importance of the core competencies and its benefits (Kim, 2019). These three
criteria are able to develop the core competencies of the organization in the following ways,
Providing access to a wide variety of markets :
Providing access to the wide variety of the markets is considered to be a method in which
the organization can develop its operations. Having access to a larger market means the business
will have large number of customers and also be able to increase its revenue much higher in the
organization. It can be said that with the help of such a core competency the business is able to
develop its international marketing strategy which can help the business in developing a success
in the important and required core competencies. Business expansion is a great way in which the
organization can make itself more competitive in the market. This is helpful for the organization
in able to increase its customers and brand image.
Making significant contribution of the perceived customer benefits for the end product :
For a business the focus should always be on contributing to the perceived customer
benefits which can help the organization in development of strong relations with the customers.
The end products of the organization needs to focus on the customers as the products of the
organization needs to provide effectiveness. It can be considered that with the help of focusing
on the customer benefits the organization is able to increase its performance. From the
analysation of this organization it can be said that the core competence of the business can
improve significantly if it is able to improve the customer benefits (Petrova and Roshchina,
2018). It is essential for the company to consider the customer benefits for analysing improving
the product eventually.

Differentiation in the products, services and operations :
The competitive imitation in the products is important for the organization to provide the
business new ways in which core competence can be improved in the organization. This strategy
can be said as the method through which the business can develop an effective strategy that can
allow the business effectiveness in the organizational management. In a business having different
product from the market helps it to ensure that the organization can be effective and ensure the
organization core competency. This is the method in which the organization can bring unique
features in the products, services and operations for developing a strong spot in the market. This
is helpful because having different product helps the business to gain the attention of the
customers and makes the company unique and make its own identity as a brand. Application of
differentiation in the operations is also a way of increasing the efficiency of the business which
helps it in decreasing the product cost.
Comprehensive explanation of the functional assessment for the strategical audit
The functional assessments which are directly contributed to the strategical audit of the
organization are as follows,
Assessment of the premises :
The premises of an organization are needed to be assessed so that a strategical audit can
be made successfully. It can be said that due to the application of the assessment of the premises
the strategical audit can help the business in increasing an organizational policy which helps the
business in the development of the organizational policies. Assessing the premises help the
organization in understanding the risks which is involved with the premises of the organization
that can help the business in the development of the organizational efficiency (AL-Tamimi,
2020).
Assessment of the Facilities :
The assessment of the facility in the strategical audit helps the business in understanding
the facilities which provide the business with new strategies and which can help the business in
purpose of the failure. In this type of assessment the business can provide the business in
performing a form of review for strategical audit and also provide the business a clear view of
the organizational position in the market.
Assessment of the information technology capabilities :

Assessing the information technology of an organization in its strategical audit can help
the business to understand the effectiveness of the strategical audit in the organization. It can be
said that with the help of this kind of information the business is able to provide strategical
information about how effective the company is in the utilization of the technology which can
provide the business in the management of the organization operations.
Assessment of the people and skills :
An organization needs to understand the effectiveness of the individuals which are the
part of their business. In a strategical audit the business is able to assess the skills and quality of
the individual this allows the business in the understanding how effective this organization is and
can be. The management of this organization focuses on how much influenced from the skills an
quality of the individuals working in it (Piasecka, 2017). This is also a method which helps the
business in the management of the operation of the business.
For the strategical audit the business also needs to assess certain other factors such as
follows,
Competition :
The level of competition the business has is considered to be very influential factor which
effects the organizational operations. There are other ways in which the focus of the organization
is considered to be the most important factor in which the business is able to develop a strong
understanding of the position of the business in the organization.
Goodwill :
For an organization it is very important to understand how effective the goodwill can be
in the development of the business which helps the business growth of its policies. The brand
image of the organization is very important for the assessment as it helps the business in growing
a goodwill in the business.
Five Ps of strategy and their utilization in strategic assessment
The Five Ps of strategy are,
Plan :
It is the default automatic approach which helps in the adaptation of the brainstorming
option which helps the organization in the planning of the strategy which will deliver success
and sustainability in the organization.
Ploy :

This is that type of strategy in which the organization is dissuaded, discouraged or
influenced by the organization in the management of the organizational influence. It can also be
said as the techniques and tools which help the organization in the analysation of the future
scenarios which might develop in competition (Mintzberg's 5Ps of Strategy – Explained, 2021).
Pattern :
In some scenarios the strategy is seemed to be emerged from the past organizational
behaviours. Using that experience for the creation of strategical planning for something in
pattern strategy.
Position :
This is the strategy in which the organization strategical positions its self for exploring
and fitting in the marketplace in order to develop a competitive sustainable advantage.
Perspective :
It is the strategy which is developed on the basis of the choice that an individual has
regarding the development of culture, behaviour and other factors which can be strategic growth
with the help of the cultural analysis through different models (Bednarek,2018).
For the strategic assessment it is very important for the organization to make sure that the
business focusing on the five Ps which are essential for the organization in the development in
strategical assessment. The strategic assessment is the analysation of the strategic plans which
are useful for the sales and marketing of the strategical assessment. In this plan the organization
needs to focus on the consideration of the current capabilities, sales process, marketing, current
staff skill set, vertical markets and also other potential new business initiatives. For an
organization it is very important to understand the different Ps of strategy which are discussed so
that the organization strategy which can be one of the Ps can be understood (Peters, 2020).
The assessment of the strategic management is considered to be the understanding of the
current internal and external environment which can help the company in the development of the
company's vision, mission, values and other strategical objectives. It can be said that the
development of the documentation and high level of strategy will allow the organization to be
assessed according to their strategy which could useful for the planning of the strategies. The
strategical assessment technique can be broken through with the help the following ways,
 Reviewing the different strategies for the strategical materials which are produced from
all the available sources and also the conduction of the different types of the strategy of

Ps can help the business in the understanding of the organization operation
(Kołodziejczyk, Mielcar and Osiichuk, 2019).
 Conduction of the same useful levels of the conduction in the market research can be
considered to be the factor that provides the business, current future market economic
conditions and also other forms of effective strategies.
 Development of the redeveloping levels of strategic foundation towards the different
forms of the strategic Ps can help the organization in understanding the requirement
which are essential for the business in the development of the organizational operations
(Nugroho, 2017).
Concept of business portfolio analysis and its role in strategical audit
The business portfolio analysis is a process which looks at the company's products and
services that are considered to be very important for the categorization of the performance of the
business and their competitiveness in the market. The categorization this method helps the
business in the recognition of the whether they should invest and reorganize the cut costs which
help the business in improving the overall business for the developing an efficient and profitable
organizational process (Rink, 2018.). Understanding of the business portfolio is considered to be
the analysation to the management of the organization operations which would help the business
in the development of the services which can be used for the assessment of the business. The
essentiality of this organization is considered to be the factor which is considered to be the
projections and suggestions which is helpful for the business in the future strategies. The
portfolio analysis is the analysation of the overall balance of the organization which helps the
business in the management of the strategical business units. Business is considered to be the
operations which are directly or indirectly connected the market segment which helps with the
development of the geographical markets (Wheelen and et.al., 2017).
It can be said as the larger diversified groups often show some sort of division which
helps the business in the development of the strong and business units for the requiring
investment for the management of the attention which is essential for the business in the distinct
industries. It can be said that the business units are helping the organization to help the business
with the investment and the management attention which is highlighted. The business can help in
the achievement of the advantage in the most attractive market (Ansoff and et.al, 2019). It is a
very important objective of the strategic audit which helps the business in the ensuring that the

business portfolio which helps in strong and that business units which is useful for the requiring
the investment which is helpful for the understanding the market for consideration of the
advantages which are needed to be achieved in the strategical audit. In the strategical audit the
portfolio analysis allows the organization in the allowing the organization to answer the key to
the questions which help the business in the shaping the present and future business portfolio that
orders the reduction the risk of functioning of the changes in the environment for increasing the
effects of the implemented strategy (Demirkan and Demirkan, 2017). In this SWOT analysis can
be used for understanding the strengths, weaknesses, opportunities and threats which talks a lot
about the strategy of the organization. It also provides a brief overview of the strategic
management leadership and is the insight to how the counteracts threats and seize of the different
strategies.
Application of BCG matrix and McKinsey Growth share matrix
BCG matrix
The application of the Boston consulting group's matrix product portfolio which is a
famous matrix called the BCG matrix that allows the organization in designing with the help of
the long-term strategic planning, to help a business consider the growth opportunities the
reviewing the portfolio the products (Schawel and Billing, 2018). This is the reason why it is
also known as the Growth market share matrix. In order to look for the practical marketing
strategy the solutions of the marketing strategy is considered to be the new phenomenon in
which the changes in the digital concept of the organization is needed to be considered such that
the organization is able to develop a strong market share for the business. This matrix utilizes a
framework in which the four categorizes of the products that are present for the company are
discussed. This helps the strategic audit in the analysation of the different types of products
through the following categories,
Dogs :
These are the products which have low growth in the market or the market share which
helps the business in the management of the organizational operations. These products have less
growth thus, the company spends less on them (Bouncken, Kraus and Roig-Tierno, 2021).
Questions market or problematic :
Such products are known for their high growth as they are very helpful for the growth in
the market for the marketing share. It can be said that the problematic child.

Stars :
These products are considered to be the one of the most essential section of the market
share which allows the business in the management of their market share.
Cash cows :
These products are categorized as the ones which have great market share, but they lack
in growth (Mo and et.al., 2020).
McKinsey Growth share matrix :
The McKinsey growth share matrix is the framework which helps the organization
strategic audit with the help of a nine box matrix offer which is considered to be the systematic
approach for the decentralized corporation which helps in the determination of the areas in which
the business should invest its cash or capital (Kader and Hossain, 2020). This matrix does not
rely on the future prospects as the company can judge the units which are produced for the
analysation of the different prospects that are essential for the company to judge by unit. These
are some factors which help the company in the determination of the future and its strategy
which can help the organization in the attraction of the relevant industry which can help the
organization with a competitive strength. For the strategical audit the business has to refer the
nine box framework which this is present in McKinsey growth share matrix. This framework
explains the investments decisions for a business regarding the investment technique which helps
the business in the management of the organizational operations (Madsen, 2017). This systematic
approach is for the strategic audit is able to understand the priority of the investments among the
business. It can allow the business in the creation of an understanding related to the industrial
attractiveness and competitive strengths. The categorization of which is done through high,
medium and low on both the scales of industrial attractiveness and competitive strengths of the
business unit.
CONCLUSION
With the help of this organization it can be said that Strategic audit is very useful and
effective for the organization in the monitoring and assessment of the business activities which
effects the organizational operations. In this project an appropriate example of the concept which
helps the business in the core competent concept for the characteristics which helps the in
analysis of the organization. This project has also talked about the assessment of the premises,

facilities, information technology and the individual skills that allow the organization in the
management of the organizational operations. In this project the five Ps of the strategy which
helps the organization in ensuring the strategy for the compliance of the result of the strategic
assessment. This project of business portfolio analysis which is helpful for the role it plays in the
strategical audit of the organization. This project also discusses the different matrix which are
useful for the carrying out the strategical audit.

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Online
Mintzberg's 5Ps of Strategy – Explained, 2021[Online]. Available through:
<https://thebusinessprofessor.com/en_US/business-management-amp-operations-
strategy-entrepreneurship-amp-innovation/mintzbergs-5ps-of-strategy>