Step 1 - Review the Current Position

There have been many management theories and techniques developed over recent years which aim to provide specific ways in which managers can gain a greater understanding of the position of the organisation in relation to the external environment.

Traditional financial information is no longer enough. Financial accounting provides external information to shareholders, regulatory authorities, creditors and other stakeholders, but it is unsuitable for understanding the overall position of the organisation in the market and therefore for making important strategic decisions.

A review of the current position should consider the various markets and business types in which the organisation participates and the value provided by each type of business. It should be clear whether a geographic area or industry sector is the core focus of the operation. Is the main business international banking, for example, with retail banking and insurance secondary in importance, or are the domestic businesses considered more important than the international businesses?

Every organisation has some core competencies which differentiate it from the competition and it should be aware of these and how to utilise them.

The competitive position of the organisation in each geographic market and industry sector should be clarified to indicate whether the organisation is a major or minor player. For example, is the institution one of the top ten investment fund managers in Japanese funds, or does it simply offer a balanced portfolio of funds to its clients?

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