OBE-Based

Strategic
Business
Analysis
A Course Module for Students

Burauen Community
College

For Internal Use Only

ii
Strategic Business
Analysis
A Course Module for Students

Burauen Community College

Written and Designed by

Burauen Community College
Burauen, Leyte
localcollegebcc@gmail.com

ii
 BCC VISION
Burauen Community College shall emerge as the
premier local public educational institution in
Eastern Visayas which is responsive to the needs
of the community, and develops students to meet
the economic, social, and environmental
challenges as active participants in shaping the
world of the future.

BCC MISSION
Burauen Community College offers holistic, and
outcomes-based experiential learning to develop
the youth to be responsible individuals with
integrity and service as agents of equality. It will
serve as a venue for the development of
individuals in the areas of academics, research,
community extension, and innovative technology.

ii
Strategic Business Analysis
A Course Module for Students

Burauen Community College

© 2021

ALL RIGHTS RESERVED. No part of this publication All rights are reserved. No part of
this publication may be reproduced, stored in a retrieval system or transmitted in
any form or by any means, electronic, mechanical, photocopying, recording or
otherwise, without prior permission of the institution.

This module contains information obtained from highly regarded resources. A wide
variety of references are listed. Reasonable efforts have been made to publish
reliable data and information, but the institution cannot assume responsibility for the
legality of all materials or the consequences of their use. The institution has
attempted to trace the copyright holders of all material in this module and express
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future reprint. Registered trademark of products or corporate names are used only
for explanation and identification without intent to infringe.

For students who want to purchase additional copies of this module, you may
send your request to locallcollegebcc@gmail.com or you may visit the institution
for an in-person request.

iii
 TABLE OF CONTENTS

Preface

Prelims

Module 1 Overview of Strategic Business Analysis

Corporate Objectives, Strategy and
Module 3
Structure
Strategic Marketing Analysis and Budgeting
Module 3
Financial Analysis in Product Portfolio
Management
Midterms
Pricing Methods and Strategies
Module 4
Financial Dimensions of Pricing in
International Business Strategies
Push Strategy and Human resource
Management
Module 5
Pull Strategy and Integrated Marketing
Communication
Semi - Finals
Supply Chain Management and the Place-
Module 6
Distribution Decisions
Performance Valuation and Strategic
Module 7
Financial Structure
Module 8 Strategic Value Analysis

Finals
Risk Management – Corporate radar and
Module 9
early Warning Systems
Module 10 Strategic Scorecards

iv
 Preface

[A preface is an introductory passage written about the module by the

author explaining why the book exists, its subject matter, and its goals.]

v
PART I: PRELIMS

v
 1
Overview of Strategic Business
Analysis

CONTENTS
1.1 Strategic Business
Analysis

OUTCOMES
LO1. Identify and analyze
strategic business analysis

OBJECTIVES
1. Identify the various
concepts in
economics, human
resource
management,
production and S
operations trategic business analysis involves the thorough
management, evaluation of all facets of enterprise operations
marketing that starts with a good foothold in the knowledge
management and and application of basic principles of economics,
financial human resource management, production and
management.
operations management, marketing
management, as well as financial management to
aid in decision-making.
Strategic business analysis takes the form
of several corporate challenges and
opportunities, specified as short term projects. In
strategic analysis, the intent must convey a
significant movement in the company and a
sense of direction which must be communicated
to all employees. It should not focus so much on
current problems but rather on opportunities that
can be captured. Strategic business analysis
specifies the competitive factors that are critical
to the company’s future success.
Strategic business analysis gives a picture
about what an organization must get into
immediately to maximize opportunities and
overcome threats. It helps management to
emphasize and concentrate on priorities than can
influence an organization’s resource potential and
core competencies to achieve what may seem
unachievable goals given its competitive
environment.

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 ABSTRACTION

STRATEGIC BUSINESS ANALYSIS

Having been in circulation since the 1960s or 70s, this picture is an

impactful way to understand how miscommunication leads to frustrating
projects and wasted time. A strategic business analyst bridges the gap
between various departments of project development and client needs. They
constantly examine and analyze the work in progress through the client’s
lens and fine-tune it according to what works best.
Business analysis emerged as a profession in the 1980s and
established itself in the 1990s. In 1995 a report under the name
CHAOS published by the Standish Group solidified the need for strategic
business analysis in software and product development projects. The report
pointed out the three major reasons behind a project’s success, which were:
● User involvement
● Executive management support
● Clear statement of requirements

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 Strategic business analysis requires the ability to translate a client’s
requirements into actionable touchpoints. Clear visualization of the problem
at hand and what needs to be accomplished are all a part of strategic
business analysis. Through in-depth investigation, a BA comes up with
‘business requirements’ that don’t directly describe a piece of software but
motivate what the team ends up building.
It involves outcome-focused thinking, simultaneously understanding
business context, business challenges, and the complexities of the internal
and external environment to frame the scope of the transformation,
articulate the business need/outcome, and shape the agenda for
transformation. Strategic business analysis requires a focus on all aspects of
the organization. It leverages business analysis, change leadership, and
program and project management. The strategic business analysis focuses
on the ‘what and why’, not the ‘how’ of solution implementation.
Strategic business analysis is those actions and decisions made by
management while trying to understand the impact of strategic events like
the introduction or development of a new product line, setting up a factory in
a new location, employing key staff, selecting an organizational
structure, investing in new technology, managing risks, complying with
relevant laws and regulations, implementing changes, etc.
It is also a set of tasks and techniques used by the strategic business
analyst to serve as a liaison between the stakeholders of an organization and
the development company. A strategic business analysis aims to understand
a business’s policies, operations, and objectives to produce a solution that
will solve a particular problem or increase the operational efficiencies within
the organization. The first stage of going into the client environment requires
a strategic business analyst to ingest and formalize what there is to know
about the organization. The primary aim is to understand the client side of
the business, how it currently functions, and the future state of operations.
Strategic business analysis are those actions and decisions made by
management while trying to understand the impact of strategic events like:
introduction or development of new product line, setting up a factory in a
new location, employing key staff, selecting organizational
structure, investing in new technology, managing risks, complying with
relevant laws and regulations, implementing changes, etc.
While traditional business analysis deal with individual items, strategic
business analysis look at things from both corporate perspective and longer
term view. Strategic business analysis in modern day business is hard to
separate from strategic management and planning where management have
to battle with the ever changing business environment. Strategic business
analysis depicts the role of strategy in business.
The purpose of evaluating business investment decisions on a strategic
basis is to meet the four most important goal of a business. The four goals of
a business are:
(1) satisfying customer’s needs,
(2) keeping employees happy at their job,
(3) complying with regulations, and
(4) operating profitably.

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 A firm’s internal capabilities are analyzed against external
opportunities and threats with the aim of optimally aligning a firm’s long-
term goal with short term decisions. In the word of Ansoff, strategic business
analyses help to keep organizations secure from surprises that characterizes
business environment.
Businesses cannot afford to analyze matters that are important to its
long-term survival in silos and short-termism. By thinking of the effect of one
variable on the other and also on the future operation of the business
activities, management would have an idea of what is likely to happen in the
future.
The length of the term to be covered in the analysis depends on the
nature and type of the business. A technological company that specialize in
fast-moving consumer goods (FMCG) will for example have a planning and
analysis time horizon of say 10 months while organizations that construct
dams will have to analyze into years in advance.

Characteristics Of Strategic Business Analysis

Long term in nature: for any business analysis to be strategic in

nature, it must have a long-term view. When designing a balanced
scorecard for example, management should think of the impact that each
target and objectives that is contained in the strategic map will do to the
long run survival of the company.
Every company wants to have a larger market share in any chosen
industry, but care should be taken to ensure that activities of managers now
while trying to meet their target would not jeopardize the organizational long
term goals.

 Focus on external events and activities: senior managers spend

about 60% of their time gathering and interpreting information from
outside source which will significantly improve decision making
process. They interact with people and organizations outside the entity
in order to achieve this goal.
 Place more emphasis on qualitative matters: in as much as
financial indicators play vital role in shaping the fortune a business
entity, attention should also be given to those qualitative factors that
an establishment cannot afford to ignore, else, business failure will
imminent. A qualitative emphasis means that detailed calculations and
manipulation of figures are unnecessary. All that is needed is the big
picture.

Challenges Faced by Management in the Process Of Strategically

Analyzing A Business
 Identifying organizational objectives and matching it with its
environment
 Identifying the need for change and initiate both the incremental and
transformational change

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  Blending the conflicting needs of stakeholders in such a way that the
knockoff effect on the business will not be felt so much
 Striking a balance between short term and long-term concerns

Advantages And Disadvantages of Strategic Business Analysis

Advantages
 Monitor and control progress through management accounting controls
 Makes management think in advance
 Optimizes the use of scarce resources
 Ensures consistency in the pursuit of goals and objectives
 Seamlessly make organization fit into its environment
 Guides the path of the business

Disadvantages
 Could be expensive in terms of time and money
 Could lead to bottleneck and bureaucracy
 Not so useful in managing crisis
 Blindfold management from identifying and taking opportunities as
they arise

A strategic business analysis would not be complete if a complete does

not understand the triangle of strategy which: (a) strategic position, (b)
Strategic choices, and (c) Strategic actions

GROUNDWORK IN STRATEGIC BUSINESS ANALYSIS

Economic Principles
Economics is the study of how to manage money and the financial
status of an individual, an enterprise, an organization, or a country. At the
core of economics studies are concepts such as scarcity, unlimited needs and
wants, alternatives, choice, and foregone benefits. In a more business-like
scenario, is the economic aspect of budgeting and financial management.
Learning how to invest, how to spend, and how to save money are other
critical aspects of economic understanding. Economics seeks to answer the
question of what, how, and for whom a good or service is produce.
When an individual goes to a physical market, makes a purchase, and
obtains a product, economics is exercised. Imagine the number of times this
process is performed by an individual on a day-to-day basis. However,
obtaining the product after making a payment is not only economic activity
that happens during a single transaction.
Economics involves the presence of decision-making among various
alternatives in the process of consumption, production, and distribution.
Studying economics allows individuals and entities to make informed
decisions to efficiently use scarce resources while satisfying unlimited needs
and wants. In micro perspective, companies can develop systems for human
resource management, production and operations management, marketing
management, and financial management. Taking it into macro perspective,

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knowledge of economics allows nations and states to realize the existence of
problems such as poverty, inflation, high interest rates, high currency
exchange rates, deficits in budget, and deficits in trade, and be able to
address them using economic tolls and related legislations.
Studying economics allows us to see thing that are not ordinarily
recognized such as debit and credit situations, how loans can be efficiently
used, or how interest is predicted. It also meant having the ability to
understand and analyze consumption, production and distribution processes,
and the way that money is made. This knowledge of economics can be
valuable whether one is inclined to start a company or manage an existing
business, or even in one’s daily activity. Economics is not all a bundle of
principles and theories. It is all about implementing practical concepts in the
real world.

Human Resource Management Basics

Human resources management involves the monitoring of the culture
of the organization, and is responsible for the recruitment of appropriate
workforce, in the recommendation of market-based compensation and
benefits that are in accordance with the company’s current and potential
resources and in the crafting of an overall strategic employee development
plan. It is also the management function that conducts research and makes
policies and recommendations, which are implemented to benefit, attract,
and retain the best employees. HRM covers five functional areas: (OSRBTP)
1. Organizational design
2. Staffing
3. Rewards
4. Benefits and compensation system
5. Training and development
6. Performance Management and appraisal system.

Human resource management, also referred to as personnel

management, is a largely overlooked area in an enterprise, and which mainly
functions as record keeper and repository of personnel policies and directives
that affect the workforce. It consists of all the activities undertaken by an
organization that aims to ensure the effective utilization of employees’ skills
and talents to attain individual, group, and enterprise goals. In broader
terms, all decisions that affect the workforce of the organization are
subsumed under the human resource management function.
Organizational design is about ensuring that there is an employee-job
fit for all the positions in an organization to fulfill its mission. This is done
through the corollary functions of planning and job analysis. Staffing deals
with the recruitment of individuals whose skills, abilities, knowledge, and
experience are deemed appropriate for the jobs in the organization that
needs to be filled. Corollary functions to staffing are recruitment and
selection.
Then there is the design of rewards, benefits, and compensation
system that includes compliance, rewards based on job evaluation, and direct
and indirect employee benefits and compensation. Its compliance component

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includes the legal aspects of human resource management. Employee and
organizational training and development seek to ensure that employees have
the necessary knowledge and skills that will allow them to satisfactorily
perform their jobs and steer the company toward its advancement in its
sector. Performance management and appraisal uses performance evaluation
tolls developed or adopted by the organization to help identify interventions
to enhance work efficiency.
Human resource management should increase employees’ job
satisfaction and meet their ultimate purpose of self-actualization within a
stimulating work environment where they perform their specific roles. Human
resource management should be able to assist the organization workforce in
achieving their personal goals even as they contribute to the bigger mission
of the company where they work. In this function of the organization,
employees must be led to develop and maintain a quality work life, that
should rebound to a desirable professional and personal situation. Company
performance is only ensured when there is an efficient and quality human
resource management system.

Production and Operations Management Basics

A product or service is the primary object of consumer interest in a
market. The need-and want-satisfying capacity of an item determines its
value as a product or service. While most products are created for an
identified need or want, some products are developed for a need or want that
is yet to exist. The process and systems that convert raw materials to
another product are the core of production and operations management.
Production and operations management involves the majorareas of
production planning and control, project management, supply chain
management, and inventory management. Production and operations
management finds its value in connecting consumer demands and the
capacity of business enterprises to provide such demands through the use
and combination of various economic resources.
In strategic business analysis and planning, the production and
operations management aspects would include plans on schedule, materials
requirements, purchasing activity and control, capacity management, sales
and operations, as well as plans on manufacturing and enterprise resources.
production and operations management outline the process of product
creation and service provision that enterprises provide to the market. The
process flow of producing goods and services varies depending on the nature
of the product.
Tangible products are created from combining raw materials as inputs
put together by labor using human capital. services, on the other hand, are
provided through the rendering of transactions in service entities such as
banks, schools, or hospitals. Often, manufactured products are also part pf
the service delivery. In ensuring that products and services reach its final
user, production and operations management enters the picture in the form
of creating a system of efficiently utilizing inputs of materials, equipment,
labor, money, methods, and management to create outputs of value.

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 A good production and operations management system allows for the
continuous search for new products and services to offer the public. it also
meant practicing creative and sustainable means to improve product designs,
packaging, raw materials requirement, service delivery experience, and
similar innovations to please consumers. It is also in production and
operations management where data is obtained to anchor major
management decisions such as changing raw materials, changing final
product form, increasing and reducing production quantity, using technology,
modifying a procurement system, to subcontract or augment production
capacity, or whether to shift from being labor to capital intensive in the
production process. ultimately, production and operations management
balance the need to provide consumers with the best products in the most
economical way, using optimal process that maximizes manpower efficiency.

Marketing Management Basics

A study and discussion of the scope and field of marketing
management underscore the value of marketing and product planning for
product promotion, the need to plan for new products and to plan for new
marketing techniques. This process includes the establishment of price and
developing pricing policies, the creation of a system, objectives, limitations or
surveying the market as well as the management of personal selling, and the
coordination of advertising activities with the other areas of marketing and
selling.
The development of policies affecting decisions to change product
lines, control marketing operations, opening of new markets, or folding
existing ones are initiatives within the area of marketing management
operations. A good understanding of market segmentation, consumer
behavior, innovation, and the variables in the marketing mix is necessary in
effectively developing a marketing management system.
Businesses continue to face the challenges and opportunities
presented by globalization, technological advancement, better
communication, and market deregulation. Marketing management is the
entire process of product creation, promotion, selling, delivery, and
continuous development. Within these processes are created goods, services,
experiences, events, persons, places, properties, organizations, information,
and ideas to satisfy different types of customers and various entities.
The most essential learning in marketing management is the
appropriate use of the tool in the marketing mix to pursue the marketing
intention of allowing the customers to become aware of products and
services, have the interest about it, to desire obtaining these goods and
services, and to act on this desire through a purchase.
The continued pursuit to provide customer satisfaction necessitates
understanding consumer behavior and the influences on this behavior and
preference that include competitor’s movements, economic situation,
development in technology, socio-cultural factors, political and legal factors,
as well as developments in the global market.
Developments in both the internal and external environments affect
the marketing management programs, systems, and decisions of an

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organization. Marketing managers are called upon to be watchful of these
developments and anticipate how these changes will affect the movement of
economic activities in the marketing area and minimize the impact of threats
and risks to the organization. Marketing activities are investments of the
company and are pursued to generate sales and boost profitability.

Financial Management Basics

The nature and scope of financial management its functions, and its
new role in the contemporary scenario is covered in understanding the
finance objectives of maximizing profit and satisfying customer wants. It also
covers the areas of profit and wealth creation, welfare and agency
relationships, costs minimization, risk-return trade off, and time valuation of
money. Financial management covers the following:
1. Investment decision process,
2. Developing cash flow,
3. Provision of data for the financing of new projects,
4. Capital budgeting techniques,
5. Traditional and discounted cash flow methods,
6. The net present value,
7. Interna rate or returns,
8. Approaches for reconciliation under conditions of risk and uncertainty.

Financial management in business operations analysis also includes

the concept of cost of capital, debt, equity, and retained earnings. Likewise,
capital structure and financial structure, as well as dividends decisions are
taken in this function of business operation. Financial management is a
process, which involves managing and controlling finance-related activities of
an organization, applying management principles to the financial aspect of
the business operation that will ultimately result in increased profitability.
Financial management applies planning, directing, organizing, and controlling
for managing financial operations, ensuring that organizations are operated
sustainably. Financial management involves framing various financial tolls to
create strategies that will ensure the successful implementation of fund
sourcing and fund utilization, for business operations.
Financial management involves the planning, organizing, directing, and
controlling of financial activities such as procurement and utilization of funds
of the enterprise. It means applying general management principles to the
financial resources of the enterprise. Financial management covers decision-
making in the areas of investment, financial operations, and shareholder
dividends. More specifically, financial management has the following
elements:
1. Investment decisions that include investment in fixed assets, also
known as capital budgeting, or working capital decisions.
2. Financial decisions relate to the raising of funds from various
resources that are based on types of sources, period of financing,
cost of financing and returns from financed projects.
3. Dividends decision is about decisions on distribution of net profits
that are generally divided for shareholders and retained-earnings.

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 The objective of financial management is the maximization of
shareholder wealthe3. This is achieved with the optimal decision on
procurement and the allocation and control of financial resources so that
organizations can ensure regular and adequate supply of funds. It aims to
ensure adequate returns to the shareholders based on its earning capacity,
the market price of the share and the expectations of the shareholders.
Financial management pursues optimum funds utilization once funds are
procured, safety on investment through an adequate return of return, and
planning for a sound capital structure. Financial management functions to
estimate capital requirements, determine capital composition, assess sources
of funds, dispose of surplus funds, manage cash, invest funds, and establish
financial controls.
Financial management has main areas that includes corporate finance
which deals with decisions related to how much and what type of assets a
firm has to acquire, how capital should be raised to acquire these assets, and
how shareholder wealth can be maximized in the process. It also includes
capital markets, which is about the study of financial markets and institutions
and how these institutions impact and deals with interest rates, stocks,
bonds, government securities, and other marketable instruments. For the
business organization, investments management which is the third area of
financial management, becomes more critical for its strategic planning. This
area includes security analysis, portfolio management, market analysis, and
behavioral finance.
Ultimately, it can be said that the heart of financial management
remains to be the goal of providing sufficient funds to achieve corporate
objectives of maximizing shareholder wealth, profit maximization that
considers timing and cash flow risks, and long-term viability and
sustainability for the company and its operations.

Sustainability Management
Sustainability management should not be confused with just
sustainable competitive advantage and sustained economic growth, although
these two objectives are acceptable business goals. Sustainability in business
is no longer exclusive of just-long-term profitability but now has the society’s
welfare at its center and includes environmental protection and business
ethics and compliance. For this reason, concepts related to sustainability also
include more common terms such as;
1. Corporate Social Responsibility which emphasizes the corporation’s
ethical responsibilities to shareholders, customers, societies, and
future generations.
2. Shared Value
3. Triple Bottom Line considers the social, environmental, and the
financial performance of the business organization.
Sustainability requires a vision and long-term action. It is about future
generations and endless collaboration of key stakeholders of industries.
Beyond the more obvious economic value of sustainable business
management to the long-term prosperity of enterprises, there are many

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other reasons why pursuing sustainability is a smart business move. This
includes:
 Attracting and retaining employees who seek a more purpose-driven
life;
 Developing more resilient supply chains; and
 Greater acceptance in the local communities where they operate.

In looking at sustainability, the reality of knowing-doing and

compliance-competitive advantage gaps must be addressed. Companies
know the right thing to do but fail to do it. Likewise, compliance takes
secondary priority as they build more on their competitive advantage.
Indeed, only a holistic approach to sustainability can deliver solid results. The
integration of sustainability practices in all the facets of business
management functions of human resource management, production and
operations management, marketing management, and financial management
is the only solution to bridge the gaps that were mentioned.
Just like with overall strategy, there is no one right strategy towards
sustainability management. The best solution depends on the direction which
enterprise managers and leaders would like to take. Foremost is the
management decision of aligning their business strategies with that of the
global sustainability direction. Companies must be more proactive rather
than reactive when dealing with matters that have sustainability
repercussions, with transparency and voluntary audit as preconditions.
Management should also allow the participation of the board, engaging
them in learning lessons about the benefits of pursuing sustainability from
the perspective of those who have benefited from it, including engaging them
in ecosystems that promotes sustainable practices. Companies are also
encouraged to quantify their investments and possible returns from pursuing
the sustainability agenda so that they will be encouraged that the long0term
sacrifice is going to be worth it in the end. The broad participation of
business organizations is the sustainability focus must be seen as
opportunities to maintain their presence in the industry, and a leverage to
attain greater stakeholder acceptance.

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