Core analysis in strategic performance appraisal

Abstract

Strategic management accounting has an important role to play in providing information about the major sources of competitive advantage of an enterprise. There are two aspects to this role; first, the computation of key internal performance indicators that measure the achievement or otherwise of these critical success factors; second, the generation and assessment of external information regarding the threat from competitors to the sustainability of any advantage currently enjoyed. A significant component of the external focus will be an examination of recent, published financial results of competitor organisations in the context of their apparent corporate strategies. Currently, though, there is no clear and concise methodology for conducting such an appraisal. This paper introduces CORE, a new, integrated financial appraisal framework, and illustrates its application by assessing a large U.K. supermarket chain from the viewpoint of its principal rival.