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Business Analysis helps an organization to improve how it conducts its functions and activities in order to reduce overall costs, provide more efficient use of resources, and better support customers. It introduces the notion of process
orientation, of concentrating on and rethinking end-to-end activities that create value for customers, while removing unnecessary, non-value added work. The person who carries out this task is called a business analyst or BA.
The central theme of the course is "value creation and
analysis"- the idea of whether a firm truly is creating
value (or destroying it) for its shareholders, and how
(potential) outsiders may read and analyse the company's
financial statements and other business analysis methods
to identify value-creating opportunities.
This
course provides students with advanced coverage of managerial
decision-making and offers an opportunity to synthesize
and apply concepts and insights distilled from previous
courses on Strategic Management, Finance and related fields.
It focuses on the critical business skills of using the
strategic analysis tools and problem solving techniques.
The elements of strategic thinking; the methods of strategic
analysis; the tasks and processes associated with strategy
formulation and implementation; and the ramifications of
aligning the operations and culture of an enterprise to
match the requirements of strategy — all are examined
in detail.
Learning Outcomes
This course objectives are to
provide students with an understanding of the techniques
used to analyse a business within its competitive environment.
illustrate how a strategic analysis is effected by reference
to one or more examples drawn from industrial markets.
provide students with an understanding of a market orientation
towards business and of techniques of marketing.
illustrate effective marketing techniques by reference
to examples drawn from industrial, consumer and service
markets.
and successful students are expected to gain
Understanding
how does the analysis of a business fit into corporate
strategy?
Ability
to analyse a business and its prospects
Understanding
the economics of businesses
Understanding
Competitive Strategies and the importance of being competitive
Well
developed understanding of Financial Analysis
Ratio
analysis
Cash
flow analysis
Decomposing
ratios and other related techniques
Problems
associated with financial statements
Conceptual
and practical knowledge and skill of organisations and
functional areas and processes
Systems
Thinking & Process Management Systems Thinking: Input
- Process - Output, Viewing a Firm as a System/Process,
Management’s Fundamental Shift, A Process View
is Becoming Essential, Value Chain Activity, The Future
Value Organisation, Total Process Management, Analysis
Process: Business Process Re-engineering
Strategy
& Systems Systems Thinking and Process Management Systems Theory, The Organisation
as a System, An Open Systems View of an Organisation,
McDonald’s as a System, What skills and knowledge
does a top manager need to deal with these challenges?
Consistent with systems philosophy, systems thinking concerns an understanding of a system by bringing the linkages and interactions to bear between the elements that comprise the entirety of the system. It depicts all human-activity systems as open systems, that they are affected by the environment in which they exist.
Systems thinking attempts to illustrate that, in complex systems, events are separated by distance and time; hence, small catalytic events can cause large changes in a system. Acknowledging that a change in one area of a system can adversely affect another area of the system, it promotes organizational communication at all levels in order to avoid the silo effect.
Both systems thinkers and futurists consider that:
a "system" is a dynamic and complex whole, interacting as a structured functional unit;
information flows between the different elements that compose the system;
a system is a community situated within an environment;
information flows from and to the surrounding environment via semi-permeable membranes or boundaries
systems are often composed of entities seeking equilibrium but can exhibit oscillating, chaotic, or exponential growth or decay behavior.
Kaizen (改善, Japanese for "change for the better" or "improvement"; the English translation is "continuous improvement" or "continual improvement"). The concept is closely associated with the Toyota Production System and related to various quality-control systems, including methods of W. Edwards Deming.
Kaizen aims to eliminate waste (defined by Joshua Isaac Walters as "activities that add cost but do not add value"). It is often the case that this means "to take it apart and put back together in a better way." This is then followed by standardisation of this 'better way' with others, through standardized work.
“NWLEAN: http://www.nwlean.net/” - The Northwest Lean Networks - A free knowledge-sharing website, with over 10,000 professionals discussing the various aspects of lean implementation.
“The Zen of Improvement” - The Manufacturer Magazine - An article discussing the benefits of the Kaizen approach to productivity. (requires login)
“Succeeding with Kaizen” - The Manufacturer Magazine - An article detailing some of the critical factors in running successful Kaizen workshops. (requires login)
Total Quality provides an umbrella under which everyone in the organization can strive and create customer satisfaction.
TQ is a people focused management system that aims at continual increase in customer satisfaction at continually lower real costs.
Company
Analysis: Strategy Components of Strategy, Strategy Over Time: The
PLC, PLC: Implications, Market Life Cycle, Implications
for Segmentation, Value Disciplines and the Life Cycle.
Strategy,
Balanced Scorecard and Strategic Profitability Analysis Strategic Cost Management, Strategic Initiatives,
Strategic Positioning, Strategic Analysis, Balanced
Scorecard, Four Basic Balanced Scorecard Perspectives,
Re-engineering, Evaluating success of strategy, Identify
and manage unused capacity, Productivity, Total Factor
Productivity, Growth - Revenue effect, Growth - Cost
effect, Price-recovery - Revenue effect.
Value
Analysis and Engineering: Concepts
and Approaches of Value Analysis and Engineering. All
Cost Is for Function. Evaluate the Function. Problem-setting
System. Problem-solving System. Setting and Solving
Management-decision-type Problems. Setting and Solving
Services Problems. Results Accelerators. Using the System.
Special Knowledge Required. Understanding the Decision
Environment. Effect on Other Work in the Business. Effective
Organization for Value Work. Essential Qualifications
and Training for Value Analysis and Engineers. Work
Content for the Value Analyst, Engineer, and Consultant.
Motivation, Measurement, and Tests. Advanced Techniques.
Using the System to Reduce Construction Costs. Problems
for Assignment.
Readings
Business Intelligence (BI) is a business management term which refers to applications and technologies which are used to gather, provide access to, and analyze data and information about company operations. Business intelligence systems can help companies have a more comprehensive knowledge of the factors affecting their business, such as metrics on sales, production, internal operations, and they can help companies to make better business decisions. Business Intelligence should not be confused with competitive intelligence, which is a separate management concept.
Key Performance Indicators (KPI) are financial and non-financial metrics used to quantify objectives to reflect strategic performance of an organization. KPIs are used in Business Intelligence to assess the present state of the business and to prescribe a course of action. The act of monitoring KPIs in real-time is known as business activity monitoring. KPIs are frequently used to "value" difficult to measure activities such as the benefits of leadership development, engagement, service, and satisfaction. KPIs are typically tied to an organization's strategy (as exemplified through techniques such as the Balanced Scorecard).
The KPIs differ depending on the nature of the organization and the organization's strategy. They help an organization to measure progress towards their organizational goals, especially toward difficult to quantify knowledge-based processes.
A KPI is a key part of a measurable objective, which is made up of a direction, KPI, benchmark, target and time frame. For example: "Increase Average Revenue per Customer from £10 to £15 by EOY 2008". In this case, 'Average Revenue Per Customer' is the KPI.
KPIs should not be confused with a Critical Success Factor. For the example above, a critical success factor would be something that needs to be in place to achieve that objective; for example, a product launch.
Critical Success Factor (CSF) is a business term for an element which is necessary for an organization or project to achieve its mission. For example, a CSF for a successful Information Technology (IT) project is user involvement. A company may use the critical success factor method as a means for identifying the important elements of their success.
The concept of "success factors" was developed by D. Ronald Daniel of McKinsey and Company, "Management Information Crisis," Harvard Business Review, Sept.-Oct., 1961. The process was refined by Jack F. Rockart in, "A Primer on Critical Success Factors" published in, The Rise of Managerial Computing: The Best of the Center for Information Systems Research, edited with Christine V. Bullen, Homewood, IL: Dow Jones-Irwin, 1986. It was later applied to many sector settings, including health care, by James A. Johnson and Michael Friesen and published in their book: "The Success Paradigm" New York: Quorum, 1995.
A plan should be implemented that considers a platform for growth and profits as well as take into consideration the following critical success factors [1]:
Money factors: positive cash flow, revenue growth, and profit margins.
Acquiring new customers and/or distributors -- your future.
Customer satisfaction -- how happy are they?
Quality -- how good is your product and service?
Product / service development -- what's new that will increase business with existing customers and attract new ones?
Intellectual capital -- increasing what you know that's profitable.
Strategic relationships -- new sources of business, products and outside revenue.
Employee attraction and retention -- your ability to do extend your reach.
Sustainability -- your personal ability to keep it all going
A critical success factor is not a key performance indicator or KPI. Critical Success Factors are elements that are vital for a strategy to be successful. KPIs are measures that quantify objectives and enable the measurement of strategic performance.
For example: KPI = number of new customers CSF = installation of a call centre for providing quotations
Value Engineering is a systematic method to improve the "Value" of goods and services by using an examination of FUNCTION. Value, as defined, is the ratio of Function to Cost. Value can therefore be increased by either improving the Function or reducing the cost. It is a primary tenet of Value Engineering that quality not be reduced as a consequence of pursuing Value improvements.
In the United States, Value Engineering is specifically spelled out in Public Law 104-106, which states “Each executive agency shall establish and maintain cost-effective Value Engineering procedures and processes." [1]
Value Engineering is sometimes taught within the Project Management or industrial engineering body of knowledge as a technique in which the value of a system’s outputs is optimized by crafting a mix of performance (Function) and costs. In most cases this practice identifies and removes unnecessary expenditures, thereby increasing the value for the manufacturer and/or their customers.
Value Engineering uses intuitive logic (a unique "how" - "why" questioning technique) and the analysis of Function to identify relationships that increase Value. It is considered a quantitative method similar to the Scientific Method, which focuses on Hypothesis - Conclusion to test relationships, and Operations Research, which uses model building to identify predictive relationships.
Value Engineering is also referred to as "Value Methodology".
Life-cycle
Approaches to Strategy Formulation Sales, cashflow and profits over the industry
life-cycle, Concerns, Introduction stage, Growth
stage, Maturity stage, Decline stage, Performance
Objectives, Goal Orientation, Criteria for classification
of competitive position, Arthur D Little Matrix.
A
Philosophical Basis for Valuation Misconceptions about Valuation, Approaches to
Valuation, Discounted Cash Flow Valuation, Equity
Valuation versus Firm Valuation, First Principle of
Valuation, What is Risk? Risk and Return Models, Riskfree
Rate in Valuation, Measurement of the risk premium,
The Survey Approach, The Historical Premium Approach,
Historical Average Premiums for the United States,
What about historical premiums for other markets?
Risk Premiums for Asia, Implied Equity Premiums, Other
Measures of Market Risk, Using Proxy Variables for
Risk, Measures of Operating Leverage, Measuring Cost
of Capital, Estimating the Cost of Debt, Estimating
Market Value Weights, Estimating Cash Flows, Three
Ways to Think About Earnings, Dividends and Cash Flows
to Equity, Measuring Investment Expenditures, The
Working Capital Effect, Estimating Growth, Dealing
with Negative Earnings, Propositions about Historical
Growth, How good are analysts at forecasting growth?
The Five Deadly Sins of an Analyst, Propositions about
Analyst Growth Rates, Fundamental Growth Rates, Growth
Rate Derivations, Changes in ROE and Expected Growth,
Expected Growth in EBIT And Fundamentals, Growth Patterns,
Beyond Inputs: Choosing and Using the Right Model.
Recollections,
Lawrence D. Miles, Editor: James J. O'Brien, CVS
Larry
Miles, the "Father of Value Analysis"
to the leading practioners of VA, was a multi-faceted
person. This recollection has the function of
remembering Larry Miles (by those who knew him)
and introducing Larry Miles for those to come.
Check the availability and buy your books from our Bookshop.
Competitive
Analysis: Hypercompetition Background, Hypercompetition,
Strategic Competitive Advantage, Competing to Provide
Value, The Move Towards Offering Ultimate Value, The
Cycle of Price-Quality Competition - MovingUp the
Escalation Ladder, Cycle of Timing / Know-How Competition,
The First Dynamic Strategic Interaction: Capturing
First Mover Advantages, The Second Dynamic Strategic
Interaction: Imitation & Improvement by Followers,
The Third Dynamic Strategic Interaction: Creating
Impediments to Imitation, The Fourth Dynamic Strategic
Interaction: Overcoming the Impediments, The Fifth
Dynamic Strategic Interaction: Transformation or Leapfrogging,
The Sixth Dynamic Strategic Interaction: Downstream
Vertical Integration, Strongholds and Entry Barriers,
Strongholds and Entry Barriers, Management Challenges,
Cycle of Deep Pockets Competition, Limitations of
the Hypercompetition Perspective, How can the game
be changed?
The
Role of Resources and Capabilities in Strategy Formulation
Resource-based Strategy, Theodore Levitt’s solution
to the problem of external change, Resource as the
basis for corporate profitability, Resources as the
Basis of Superior Profitability, Resource-based approach
comprises three key elements, The starting point for
analysis is to identify and assess the resources and
capabilities that the firm has available to it, The
Resources of the Firm - at two levels of aggregation,
Financial resources, Physical resources, Human resources,
Technological resources, Reputation.
Financial
Analysis The Company’s Cash-Cycle, The Dupont Strategic
Profit Model, Margin Management, Asset Management,
Leverage Management, Growth Strategy and Finance
An annual report is a document which a company presents at its Annual General Meeting for approval by its shareholders. The report is made up of reports and of financial statements, which may include the following:
Other information deemed relevant to stakeholders may also be included, such as a report on operations for manufacturing firms. In the case of larger companies, it is usually a sleek, colorful, high gloss publication.
The details provided in the report are of use to investors in gaining an understanding of the company's financial position and future direction. The financial statements are usually compiled in compliance with IFRSs and/or the domestic GAAP, as well as domestic legislation (e.g. the SOX in the U.S.).
The
Uses of Financial Ratios How should managers use ratio analysis?
Performance assessment, Trend analysis, Inter-firm
comparison, Test of reasonableness.
Preparing
a Cashflow Forecast Why are profits and cash
flow different? Why Should You Prepare a Cash Flow
Forecast? Importance of Cash, Cash vs Profit, Step
One - Revenues, Step Two - Disbursements, Step Three
- Reconciliation, Designing A Cash Flow Worksheet,
Calculating Cashflows, Planning Pitfalls, Making the
Best Use Of Your Cashflow, Critically Examine Results.
Customer
Analysis Segmentation, Targeting
& Positioning, A Segmentation Model, Descriptor
Variables, Criteria for Segmentation, Strategic Approach
to Segmentation, Profiling the Segments, Market Segmentation,
Targeting, The Multi-factor Targeting Model, Finding
the Attributes that Help in Differentiation, Positioning
Analysis, A Perceptual Map, Positioning Statement,
Questions to ask when Positioning, Creating Value
Through Positioning, Positioning totally new products,
S-T-P process, Competitive Leverage Analysis.
Conjoint
Analysis What is Conjoint Analysis?
Managerial uses of Conjoint Analysis, Commercial Applications,
A Survey, Selecting the stimulus set of profiles,
Steps in the analysis, Interpreting the Coefficients
or PART WORTHS, Simulating aggregate choices, Using
CA for segmentation, CA with large numbers of attributes,
Choice Based Conjoint.
Readings
Cashflow is an accounting term that refers to the amounts of cash being received and spent by a business during a defined period of time, sometimes tied to a specific project. Measurement of cash flow can be used
to evaluate the state or performance of a business or project.
to determine problems with liquidity. Being profitable does not necessarily mean being liquid. A company can fail because of a shortage of cash, even while profitable.
to examine income or growth of a business when it is believed that accrual accounting concepts do not represent economic realities. Alternately, cash flow can be used to 'validate' the net income generated by accrual accounting.
Cash flow as a generic term may be used differently depending on context, and certain cash flow definitions may be adapted by analysts and users for their own uses. Common terms (with relatively standardized definitions) include operating cash flow and free cash flow.
Forecasting is the process of estimation in unknown situations. Prediction is a similar, but more general term, and usually refers to estimation of time series, cross-sectional or longitudinal data. In more recent years, Forecasting has evolved into the practice of Demand Planning in every day business forecasting for manufacturing companies. The discipline of demand planning, also sometimes referred to as supply chain forecasting, embraces both statistical forecasting and consensus process...
Forecasting is commonly used in discussion of time-series data.
Strategic
Thinking and Chaos Theory: Innovation
Management. Systems Thinking. Creativity. Chaos Theory.
Cybernetics. Game Theory. Cognition. Mind Mapping. Cognitive
Learning Theory. Reflexions.
Complexity
Theory: Chaos and complexity . Management
and complexity theory. Lessons for management. How new
are the lessons? What is the evidence? Complexity as
metaphor. An assessment of management complexity.
Understanding
Complexity: Introduction. Appreciation
- Extracting All Most Information From Facts. Drill-Down
- Breaking Problems Down into Manageable Parts. Cause
& Effect Diagrams - Identifying Likely Causes of
Problems. Systems Diagrams - Understanding How Factors
Affect Each Other. SWOT - Analyzing Your Strengths,
Weaknesses, Opportunities & Threats. Cash Flow Forecasting
With Spreadsheets - Analyzing Whether an Idea is Financially
Viable. Risk Analysis.
Creativity
Tools: Improving
a product or service - Reversal and SCAMPER. Creating
new products, services & strategies: Attribute Listing,
Morphological Analysis & Matrix Analysis.
Generating many radical ideas - Brainstorming. Making
creative leaps - Random Input. Widening the search for
solutions - Concept Fan. Looking at problems from different
perspectives - Reframing Matrix. Carrying out thought
experiments - Provocation. A simple process for creativity
- DO IT. A powerful integrated problem solving process
- Simplex.Subconscious problem solving.
Concept
Map: How to Use Concept Maps? Dawing
Basic Mind Maps. Improving your Mind Maps. Key Points.
Game
Theory Rivalry and Game Theory,
The Prisoners’ Dilemma, Types of Games, Payoff
Matrix, Game Outcomes, Repeated Games, Sequential
Games, Solution Core, Matching Strategy to the Life
Cycle, Emerging Industries, Growth Industries, Mature
Industries, Declining Industries, Declining Industries,
Fragmented Industries, First-movers.
Project
Planning and Management: Introduction.
Estimating Time Accurately. Scheduling Simple Projects.
Gantt Charts - Scheduling Projects with Dependent Stages.
Critical Path Analysis & PERT - Scheduling Complex
Projects. The Planning Cycle - A Planning Process for
Middle-Sized Projects. Planning Large Projects &
Programs.
Critical
Path Analysis and PERT Charts: Why to use Ctitical Path Analysis and
PERT Charts? How to use Ctitical Path Analysis and PERT
Charts? Drawing a Critical Path Analysis Chart. 'Crash
Action'. PERT. Key Points.
Growth
Share Positioning: Measuring Historical Evolution.
A very powerful tool used to understand the implicit
or explicit strategies of a firm is the ‘Share-Momentum
Graph’ (Lewis 1977)
Construction of the Graph, Positioning, Challenging
the basic premises of the BCG approach, The Trade-off
between Profitability and Growth, Business-unit Cost
of Capital, Market Growth Rate, Additivity Principle,
Cash Generation and Cash Using characteristics of
a Business in terms of its Growth and Profitability,
Implications of Cash Generation and Cash Use.
Portfolio
Analysis. Building Shareholder Value Portfolio Models. The Boston Consulting Group
Matrix. PLC and an extended form of Growth Share Matrix,
Weaknesses of Growth Share Matrix, Directional Policy
Matrix, Portfolio Models in use, Different models
- different results
SWOT
Analysis Strengths and Weaknesses, Resources and Capabilities,
Competitive Competencies, Fit between Firm Strategy
and its Environment, Internal Analysis, Strategy built
around SW, Key Success Factors, Analysing Resources,
Typical SW Items, SWOT Profile and Possible Strategies,
Resources & Skills, Resources as the basis for
corporate profitability, Elements in Distinctive Competencies,
Competitive Advantage Simplified, Day & Wenley’s
Model of Competitive Advantage, Durability of Competitive
Advantage, Issues surrounding Resources and Capabilities,
Barriers
BT Group plc (formerly British Telecommunications plc) which trades as BT (also previously as British Telecom and is still commonly known as such amongst the general public) is the privatisedUK state telecommunications operator. It is the dominant fixed line telecommunications provider in the United Kingdom. BT operates in more than 170 countries and almost a third of its revenue now comes from its Global Services division.
Retail and Wholesale local, national and international telecommunications products and services,
Broadband and internet products and services,
IT and Network Solutions,
Mobile service as a Molo
As a result of China’s entry to the World Trade Organization (WTO) in 2001, a new regulatory regime is now being established and foreign operators are gradually being allowed to access the market. Although Chinese customers keep complaining that they need to pay higher prices for products and services and receive lower-quality services than customers in America or Europe, foreign travellers often feel that the telcommunication services in China is cheap and convenient.
