Prior to answering the strategic and operational issues on CFE Day 1, you are required to complete a Situational Analysis (SA). This will include assessing the company’s current mission / vision / values, key success factors (KSFs), goals / objectives, internal and external environment (SWOT), constraints, and a financial analysis.
This will be key to recommending what the company should do, as you will be required to integrate these SA factors throughout each of the strategic and operational issues.
Rules with integrating Situational Analyses factors
Let’s first understand the concept of integration in CFE Day 1. Integration is about taking a factor you put in SA and using it in the strategic and operational analysis. For example, if you write in your SA that a company’s strength is its brand appeal to the millennial customers, then when a strategic issue comes up about launching a new product line, you should tie back, or “integrate” to SA. You’d write:
“This product line is well-accepted by the millennials according to the research, which means our company can leverage its strength of brand appeal to millennials to gain a significant market share, thus improving the bottom line.” In this example, I integrated one of SWOT’s strength factors into the analysis. You’re expected to integrate at every issue (strategic and operational), at least 4-5 times, at minimum.
Some rules about integration:
- You are not required to integrate every single point in the SA throughout your case. You can write something in SA but not integrate.
- You cannot integrate something that you didn’t write in your SA. For example, if the case has some opportunities that you didn’t write in your SA, you can’t integrate it.
- You can integrate the same item more than once.
- There is no need to remove items from your SA that you didn’t integrate. For example, when first completing SA, you won’t know which points are important and which won’t be integrated. It’s possible that you will find later that something you wrote in SA (e.g. some of KSF) are not needed later. There is no need to remove those.
- You can integrate both quant and qual SA items. For example, you can choose to integrate a constraint (i.e. bank covenant) or KSF, and they will both earn you points.
- You should integrate 4-5 times in all strategic issues
Generally, it’s better to add more points to SA to give you more integration options later. However, be mindful of your time and don’t spend too much time on SA.
How is CFE Day 1 marked?
Below is the Feedback Guide (FG) on the Day 1 SA and how you will be marked. For this example, the case has 4 strategic issues (AO2 to AO5) and 2 operational issues (AO6 A and AO6 B).
To achieve “Yes” on strategic and operational issues (elements 1-4), you will be required to score a Level 3. Level 3 consists of incorporating and discussing 3 factors from your SA. To receive marks for “discussion”, you must clearly explain the implication and impact of the SA factor and why it’s important. You must state why and how it works in favor of the decision, or against it.
Notice how beyond integrating your SA in your analysis, there is also a requirement to integrate the quantitative analysis (element 6). This can include ratio analysis, YoY comparison, industry benchmark comparison, etc. It is not enough to state the amounts in your SA. To achieve “Yes” and a Level 3 in element 6, you must discuss 3 of the quant components in strategic and operational issues and how they impact / affect the overall health or position of the company.
Overall, to achieve “Yes” on your SA, you need to achieve a Level 3 on at least 3 of the elements and at least 1 partial (Level 1 and/or 2) on another.
Extra Resources
In conclusion, completing situational analysis is important before answering the strategic and operational issues on CFE Day 1. Integrating the SA throughout the analysis is essential, and to receive marks for “discussed”, the impact of the situational analysis factor must be clearly explained.
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