ALBAO, DIANNA KATE S.

BSA 3

NOTES
Lesson 1: Strategic Business Analysis on the outcome and what is needed when
and by whom. 
5. Business Case - captures the reasoning
Strategic business analysis and justification for initiating the program or
-requires a focus on all aspects of the project and the anticipated commercial
organization. benefits. It enables the executive to make an
-focuses on ‘what and why’, not the ‘how’ investment decision.
of solution implementation. 6. Sourcing Strategy - a procurement
process that connects data collection, spend
Strategic business management analysis, market research, negotiation, and
-refers to the formulation and contracting.
implementation of the goals and initiatives 7. User Journeys - visualization of the
involved in the strategies, laid out by the strategy. Their construction leverages design
stakeholders of an organization thinking and are part of sense making for
-includes innovative thinking, a strategic stakeholders. 
planning process and operational 8. Transition Strategy - focuses on the
strategizing. long-term strategy of the transformation and
the future releases and generations. It helps
inform the sourcing strategy and
procurement of services for ongoing support
9-Step Roadmap for Successful Business
and maintenance of products and services. 
Transformation
9. Change and Adoption Strategy -
1. Program Strategy - provides the focuses on adoption and the strategies for
foundations for a transformation or change. change. It is key to delineating the strategic
It helps to determine how to solve business change and activities required for the
problems in a way that will ensure the best transformation and the organization change
result. and activities required.
2. Sponsorship and Governance
Framework - creates a terms of reference
document that outlines the program
organization structure, roles, and
responsibilities of each of the functional
areas. 
3. Stakeholder Strategy - provides
approaches for building and maintaining
positive relationships with stakeholders
4. Execution Roadmaps - provide a high-
level view of all the moving parts of
programs in context. They also provide
focus
Lesson 2: Strategic Cost Management
Strategic Cost Management
-the process that aims to strengthen a
company's strategic position by carefully
controlling costs according to the company's
broader objectives.
- traditional cost management programs
which primarily focus on cost reduction and
cost control by allocating production
overheads and costs.
- cost control plus cost reduction and value
improvement at the same time.
Three important components of strategic
cost management
1. Strategic Positioning Analysis
Positioning – refers to creating an appealing
image that leverages a brand's unique
strengths.
- reflects choices a company makes about
the kind of value it will create and how that
value will be created differently than rivals.
- Differentiation - driving up prices is one
way to increase profitability.
- Cost Leadership - Driving down costs is
another way to increase profitability.
2. Cost Driver Analysis
- Identifying the activities generating costs
in the organization.
Cost Driver - is the unit of an activity that
causes the change in activity's cost. cost
driver is any factor which causes a change in
the cost of an activity.
Structural Cost Drivers
- these are concerned with the economics of
structure, technology, and the boundaries. of
the firm (e.g. outsourcing). These are
derived from the business strategic choices
about its underlying economic structure such
as scale and scope of operations, complexity
of products, use of technology, etc.
Executional Cost Drivers
- these are concerned with. continuous
improvement such as quality, productivity,
speed, and punctuality. These are derived
from the execution of the business activities
such as capacity utilization, plant layout,
work-force involvement, etc.
3. Value Chain Analysis
- The process where a firm identifies its
primary and support activities that add value
to its final product and then analyze these
activities to reduce costs or increase
differentiation
- Primary activities - primary activities
contribute to a product or service's physical
creation, sale, maintenance and support.
- Inbound operations. The internal
handling and management of resources
coming from outside sources - such as
external vendors and other supply chain
sources.
- Operations. Activities and processes that
transform inputs into "outputs"
- Outbound logistics. The delivery of
outputs to customers.
- Marketing and sales. Activities such as
advertising and brand-building
- Service. Activities such as customer
service and product support, which reinforce
a long-term relationship with the customers
who have purchased a product or service.
Secondary activities -It relates costs to the various elements of
the value chain.
- Procurement and purchasing. Finding
new external vendors -Uses specific metrics in furtherance of
achieving competitive advantage through
- Human resource management. The cost leadership.
management of human capital.
- Technology development. Activities such
as research and development
- Company infrastructure. Necessary
company activities such as legal, general
management, administrative, accounting,
finance, public relations and quality
assurance.

Stages of Strategic Cost Management

1. Formulating Strategies - Identify

methods for strengthening the organization's
competitive position by reducing costs.
2. Communication - Communicated these
strategies throughout the organization.
3. Execution - This includes identifying and
executing tactics in furtherance of the
identified strategies.
4. Controls - Controls include developing
methods of monitoring and measuring
activities to gauge the effectiveness of
strategies and execution.

Effect of Strategic Cost Management

-Allows for a better understanding of the

cost structure when making management
decisions.
-It improves upon traditional cost analysis
measures by integrating organizational
strategy.
Lesson 3: Management Control System
Management Control System
- deals with the implementation aspect of the
organization.
-the purpose of those implemented practices
intends to increase the probability that the
lower level managers and employees will
behave in ways consistent with mission,
goals and strategies. So as you know,
strategies are usually crafted at the top
management.
Formal Control System
- controls are laid down by the management
in writing to influence the behavior of the
employees in achieving organization’s goal.
- establishes well defined organizational
structure, procedures to be followed by the
members of the organization.
FCS can be classified into three types:
1. Input control- actions taken by the
company before a planned activity is
implemented.
2. Process control- involve tracking certain
variables and taking corrective action
whenever there is any deviation from
specified parameters in the variables.
3. Output control- is exercised when
performance standards are set and
monitored, and the results are evaluated.
takes place when the control activity is
based on the comparison of actual and
planned outcomes.
Informal Control System- these are
unwritten, people initiated mechanisms that
influence the behavior of individuals or
groups in business units. Informal controls
include group norms and organizational
culture.
IFCS can be classified into three types:
1. Self-control-deals with the establishment
of the personal objectives by the individual,
monitoring their attainment and adjusting
the behavior in the organization to attain the
goals.
2. Social controls- refers to the prevailing
social perspectives and patterns of
interpersonal interactions within subgroups
in the firm
3. Cultural control- realized by norms of
social interaction, and stories, rituals and
legends relating to the organization
Purpose of Management Control
- Ensuring alignment between plans and
actions implemented by an organization
- Providing feedback to top management of
the results of implementation that will aid
in calibrating tactics to implement overall
strategy.
Important Features of Management
Control System
- Nature of Decisions Management-
control decisions are based on the
framework established by the organization’s
strategies. Management control decisions
also take into account the quantity and
quality of resources available.
- Decisions Are Systematic and Rhythmic
Decisions- in management control process
are systematic and rhythmic i.e. they are in
accordance with the strategies and
procedures laid down by the top
management.
- Strategy Implementation Tool
Management- control helps an organization
to move towards its strategic objectives. It is
an important vehicle for the execution of
strategy.
Management Control Activities
1. Planning what the organization should do
2. Coordinating the activities of several parts
of the organization
There are several components that make up
a management control system.
- Clear managerial assignments.
- Bureaucratic controls
- Financial controls
- Quality controls

3. Communicating information - Normative controls

4. Evaluating information - Make informed comparisons

5. Deciding what, if any, action should be - Understand variation from goals

taken - Plan to correct variations
6. Influencing people to change their
behavior

The Need for Management Control

- Lower-level managers and employees may
not automatically understand the mission,
goals and strategies of the organization, nor
how they can contribute to it.
- Lower-level managers and employees may
not automatically agree with the
organizational mission, goals and strategies.
- Lower-level managers and employees may
not automatically have the resources needed
to act according to the organizational
mission, goals and strategies.

Factors influencing Management Control

System
- Size and Spread of the Enterprise
- The Nature of the operations and their
Divisibility
- The variety of responsibilities within the
organization
- The people of the organization and their
perceptions
Lesson 4: Benchmarking
Benchmarking
Benchmarking is a continuous process of
-Comparison - Business processes with the
best similar processes in any or all industries
to define best value
-Projection - Projecting future trends in best
practices and proactively leading to these
trend can give you the intelligence to
anticipate a downturn in sales and plan for it.
-Implementation - Implementing defined
best practices
- Meeting and exceeding customer/consumer
expectations
- The process of continually researching for
new ideas, methods, practices and processes,
and either adopting the practices or adapting
the good features, and implementing them to
obtain the “best of the best”
Primary reasons
1. Setting goals
2. Identifying how the goals can be
accomplished
Functions of the benchmarking
 Comparative analysis (the what)
 What good is defining the gap
between your organization and your
competitors or world- class
organizations if you do not know
how to improve your processes to
narrow the gap?
 Product / system knowledge (the
how)
 Knowing that you are inferior, but
not being able to improve, just
discourages everyone.
Types of benchmarking
Internal benchmarking
One of the easiest benchmarking
investigations is to compare operations
among functions within your own
organization.
Competitive benchmarking
Direct product or service competitors are the
most obvious to benchmark.
Functional benchmarking
Functional benchmarking investigates
leaders in dissimilar industries.
Generic benchmarking
It extends functional benchmarking by
removing the constraints imposed by
limiting the investigation to practices with
similar characteristics.
Approaches
Strategic Approaches Benchmarking
Benchmark to identify weaknesses and
strengths within a specific area or
functional unit
Organizational Approaches
Benchmarking
Benchmark to support and direct the
business plan. If improved, that will
impact the organization’s competitive
position.
Benefits
 Provides a way to improve customer
satisfaction.
 Helps eliminate the not-invented-
here syndrome.
 Includes the use or proven
approaches, methods, processes and
technologies.
 Identifies your competitive position,
strengths and weaknesses.
 Increases the effectiveness,
efficiency and adaptability of your
processes.
 Transforms complacency into an
urgent desire to improve.

Seven step benchmarking model

1. Identify what to benchmark
2. Determine what to measure
3. Identify who to benchmark
4. Collect data
5. Analyze data and determine gap
6. Set goals and develop an action plan
7. Monitor the process

Lesson 5: Customer Profitability Analysis
Customer Profitability Analysis (CPA) is
the analysis of the revenue streams and
service costs associated with specific
customers or customer groups. ‘
Customer profitability analysis approach
The general approach to CPA is based on
segmenting the customer base to determine
the revenues and costs attributable to each
segment. This is often combined with an
activity-based costing (ABC) approach.
Once the profitable and non-profitable
segments are identified, profitable segments
are maximized while non-profitable
segments are reduced or eliminated.
Step 1 – Customer segmentation
The basis for customer segmentation will
differ across companies and across
industries. Currently, there are two basic
approaches to customer segmentation:
1. Demographic segmentation based on
observable characteristics such as
geographic area, customer age, sex and
income level.
2. Psychographic segmentation based on
customer needs and behavior such as
customer values, attitudes and interests.
Step 2 – Revenue attributable to each
segment
Step 3 – Use ABC to determine the cost
attributable to each segment
Step 4 – Analyze the profitable versus the
less profitable or unprofitable customer
segments
Step 5 – Develop strategies to maximize
profits from profitable customers and
reduce or eliminate less profitable or non-
profitable customers.
To address the least profitable or non-
profitable customer groups, two main
actions are used:
1. Elimination – ceasing to supply these
customers. This can be done by no longer
marketing to these customers, changing the
product or service so that it is no longer
suitable, or raising prices.
2. Re-engineering – turning the least
profitable or non-profitable customer groups
into profitable ones by either increasing
revenue or decreasing costs attributable to
these groups, or both.
Step 6 – Review the impact of the new
strategies on the performance of the
customer segments
Customer Lifetime Value (CLV)
This is the value generated by a customer
over the lifetime of a customer’s relationship
to a company. This includes the likelihood,
frequency and amount of expected purchases
over the lifetime of the customer.
To determine the present value of these
future income streams, a discount rate
(usually the company’s cost of capital) is
used. CLV estimates are particularly useful
to:
• companies with large variations in
purchasing patterns by customers
• companies with high customer acquisition
costs
• companies with high customer retention
costs.
So, how do companies calculate customer
lifetime value?
First, calculate the lifetime value by
multiplying the average value of a sale, the
average number of transactions, and the
average customer retention period.
Lifetime Value = Average Value of Sale ×
Number of Transactions × Retention Time
Period

Customer Lifetime Value = Average Value

of Sale × Number of Transactions ×
Retention Time Period × Profit Margin
Or simply:
Customer Lifetime Value = Lifetime Value
× Profit Margin

Key Developments:
1.Advances in information technology
2.Managing customer value
 Process Control System
The function and operations necessary to
change material either physically or
chemically.
Lesson 6: Process control and Activity- Process Variables
Based Management
A condition of the process fluid that can
change the manufacturing process in some
Process- a sequence of interdependent and way.
linked procedures
Control- refers to the regulation of all Primary devices of PCs
aspects of the process
1. Programmable Control Logic
Types of Process
2. Distributed Control System
Continuous process- runes continuously
and uninterrupted in time.
Batch production- performed on the batch Types of process control system
to produce a finished product.
1. open-loop control system- control action
Individual or discrete products is applied on the output of the system; does
production- series of operation procedures a not receive feedback signal to control or
useful output product. alter the output status.
2. closed loop control system- the output of
the process affects the input control signal;
Process Control measures the actual output process and
An engineering discipline that deals with compares it to the desired output.
architectures, mechanism and algorithms for
maintaining the output of a specific process
within a desired ranged extensively used Activity Based Management is a logical
industry. technique of planning, controlling and
improving labor and overhead cost.
- hinges on the principle “activities consume
Process Controls for Quality and
costs”. Whereas traditional cost system
Efficiency
focuses on the ‘worker’, activity based
Manufacturers control the production management focuses on ‘work’.
process for three reasons:
-improves operational systems and control
1. reduce variability so as to enhance value deliverables to clients
and boost corporate profitability.
2. increase efficiency
3. ensure safety
Merits of Activity Based Management
- increases effectiveness of key business
processes, activities and tasks by keeping
costs at barest minimum while increasing
value to clients
- improves management focus through
allocation of resources to value added
activities, customers, products and
continuous improvement system for
maintaining competitive advantage.

Cost Object- an item for which costs are

accumulated. It’s the reason for performing
an activity and stands as the final point to
which costs should be traced.
Cost Driver- a factor that can generate
effect of changing the level of total cost for a
cost object.

Categories of cost divers

Structural cost divers - decisions about the
type if resources than an organization should
obtain,
Executional cost divers - decisions about
the specific processes and activities that
consume an organizations resources.
Resource cost divers - a factor that
determines the level of consumption of
resources by activity.
Activity cost divers – a factor which causes
activity to be consumed by cost object.

Organizational Application of Activity

Based Costing
 Budgeting and forecasting
 Performance monitoring
 Process improvement
 Controlling shared services
 Product profitability analysis
 Customer profitability analysis
 o You prepare your team to take
advantage of emerging trends or
to minimize the damage caused
by unforeseen events.
o You help your organization
differentiate itself from its
Lesson 7: Strategic Thinking competitors and adapt to shifting
conditions and demands.

Strategic thinking is an organizational and Different Aspects of Strategic

pragmatic type of critical thinking. Thinking Thinking
strategically involves seeing the big picture,
planning ahead, and putting thought into Vision- define your vision
action, typically to gain a competitive statement
advantage in business. Strategy- figure out how to
reach your vision
- simply an intentional and rational thought Tactics- expand to include
process that focuses on the analysis of tactics
critical factors and variables that will
influence the long-term success of a
business, a team, or an individual.
5 Characteristics of Strategic Thinkers
1. Strategic foresight
2. An inquisitive mind
3. A flexible attitude
4. An ability to connect the dots
5. An ability to contextualize
information
4 Tips for Developing Strategic Thinking
Skills
If we compare strategic thinking
1. Ask questions with strategic planning, we see
2. Take time to listen that:
3. Learn to prioritize
4. Reflect on what worked and what ● Strategic Thinking – is the “What”
didn’t and the “Why” …that is what should
Why is strategic thinking important? we be doing and why.
● Strategic Planning – is the “How”
o You learn to use resources and “When” …at a very high level.
effectively and avoid costly
mistakes.
o You make well-informed
decisions and solve problems
creatively.
 - is a strategy where a business marks down
the prices of goods or services in an effort to
attract customers.
Psychological pricing
- is when a customer thinks they are getting
a good deal.

Lesson 8: Pricing Methods and Strategies Bundled pricing

Pricing- is defined as the amount of money
that you charge for your products.
Pricing Strategies- is a way of finding a
competitive price of a product or a service. 
- is another strategy many businesses use.
Bundled pricing is just like it sounds:
businesses bundle multiple goods or services
together and give consumers a lower price
than if they purchased the items separately.

4Ps
1. Product
2. Price
3. Place
4. Promotion
Market penetration pricing
- is where businesses set a low initial price
for goods and services.
Price skimming pricing
- is the opposite of market penetration
pricing. With price skimming, businesses
initially set high prices in the hopes of
turning a quick profit.
Economy pricing
- is one strategy that prices certain products
and services at a low rate. With economy
pricing, businesses cut down on the costs
that go into making the product or
performing the services. 
Competitive Pricing
- is where business base their prices on what
competitor’s charge
Discount Pricing

Lesson 9: Strategic Marketing Analysis
and Budgeting
Strategic Marketing
A strategic marketing refers to a business's
overall game plan for reaching prospective
consumers and turning them into customers
of their products or services.
It is long-term in its nature and is the
bedrock upon which all marketing decisions
are made.
Essential steps for a successful Strategic
Marketing Process:
Mission
Situation Analysis
Marketing Plan
Developing Marketing Mix Decisions
Implementation and Control
Mission
It is important to know the company’s
mission statement to stay focused on a
certain goal.
Situational Analysis
Evaluate different factors, both internal and
external factors, that could affect the
business.
Strength
What do we do well? What can we control?
What resources can we pull from? What
does the world see as our strength?
Weaknesses
What do we not do well? What can we
improve on? Where do we have fewer
resources than the competition? What do we
do well that still needs improvement? What
does the world see as our weakness?
Opportunities
What opportunities do we have? What
trends or ads can we utilize? How can we
turn strength into continued opportunities?
Threat
What is our competition doing well? What
could harm us in this industry? Do our
weaknesses pose any immediate threats?
How can we handle threats?
Marketing Plan
This is an operational document that outlines
an advertising strategy that an organization
will implement to generate leads and reach
its target market.
Steps in developing a Marketing Plan
Define your target market
● Geography
● Demographic
● Behavior
● Psychographic
Set Measurable Goals
Goals must be:
● achievable
● detailed
● set up for success
Identify and Set a Marketing Budget
Allocate funds to properly support the A marketing budget is the amount of money
marketing budget a business allocates for expenses related to
the promotion of its goods or services.
Steps in developing a Marketing Budget
Marketing Mix
 Identify your marketing goal
A marketing mix includes multiple areas of
 Understand your target audience
focus as part of a comprehensive marketing
plan.  Understand your market and
competition
The 7 Ps:  Choose your marketing channels
1. Product Ways to calculate the marketing budget:
2. Price 1. Revenue based
3. Promotion 2. Competition matching
4. Place 3. Top down
5. People 4. Goal driven
6. Process
7. Physical Evidence
Implementation and Control
● Be ready to adapt
● Always monitor your competitors
● Remember to stay focused and
organized
Importance of Strategic Marketing
• Penetrate the market easily
• Increase reachability
• Create sustainable goals
• Regulate resources wisely
• Boost sales
Budgeting
Budgeting is the estimation of revenue and
expenses over a specified future period of
time and is usually compiled and re-
evaluated on a periodic basis.
Marketing Budget

Lesson 10: Promotion: Push Marketing
Strategy and Human Resource
Management
Push marketing strategy
A push marketing strategy, also known as a
push promotional strategy, is a marketing
technique in which a company tries to
"push" its products onto customers. The
purpose of a push marketing approach is to
employ numerous active marketing
strategies to get consumers to notice their
items, often immediately at the point of
purchase.
"Push" refers to the fact that the company
that sells the product is continually pushing
it into the potential customer's purview, their
field of vision, so to speak.
Methods of Push Marketing Strategy
a) Direct Selling to Customers
b) Point of Sale Displays (POS)
c) Trade Show Promotion
d) Packaging Designs to Encourage a
Purchase
Advantages of Push Marketing Strategy
The greatest advantage of push marketing is
that it produces quick results and make clear
statements to customers. it is less concerned
with branding, and more concerned with
creating an instant demand for a new
product.
Disadvantages of Push Marketing
Strategy
The major disadvantage of push marketing
is that it can be expensive and only produce
temporary effects. since the goal is not to
create long-term customer relationships,
push marketing strategies have to constantly
make new pitches about the value of
products. it keeps the customer at a distance,
meaning they must constantly be reengaged.
Human Resource Management (HRM)
HRM is the practice of recruiting, hiring,
deploying and managing an organization's
employees. HRM is often referred to simply
as human resources (HR). A company or
organization's HR department is usually
responsible for creating, putting into effect
and overseeing policies governing workers
and the relationship of the organization with
its employees.
HRM is employee management with an
emphasis on those employees as assets of
the business. In this context, employees are
sometimes referred to as human capital. As
with other business assets, the goal is to
make effective use of employees, reducing
risk and maximizing return on investment
(ROI).
Importance of Human Resource
Management
HRM methods are responsible for
managing people in the workplace in
order to achieve the organization's
mission and reinforce the culture. HR
managers can help recruit new
professionals with the capabilities
needed to advance the company's goals,
as well as assist with the training and
development of present employees to
accomplish objectives, if done correctly.
HRM is an important aspect of
sustaining or increasing the health of a
 business because a company is only as
good as its employees. HR managers can
also keep an eye on the job market in
order to keep the company competitive.
This could entail ensuring that salary and
benefits are equitable, that events are
organized to keep employees from
becoming burnt out, and that job duties
are tailored to market conditions.

Objectives of Human Resource

Management (HRM) within the
Organization:
1.Help the organization achieve its goals by
providing and maintaining productive
employees.
2.Efficiently make use of the skills and
abilities of each employee.
3.Make sure employees have or receive the
proper training.
4.Build and maintain a positive employee
experience with high satisfaction and quality
of life, so that employees can contribute
their best efforts to their work.
5.Effectively communicate relevant
company policies, procedures, rules and
regulations to employees.
6.Maintaining ethical, legal and socially
responsible policies and behaviors in the
workplace.
7.Effectively manage change to external
factors that may affect employees within the
organization.
 Disadvantages of SVA
Lesson 11: Strategic Value Analysis 1. undervaluation
2. overvaluation
Strategic value analysis (SVA) 3. overlooking strategies
Is the combined use of strategic and
financial analysis tools to assess the likely
Undervaluing a strategy
value of major investment decision
Type I Error
Major investment decisions are the ones
 Investing in future option
with major impact on:
 Investing to hold customer
1. Competitive Scope
Overvaluing a Strategy
2. Competitive Style Type II Error
3. Competitive Advantage Forecasts are often afflicted with
unwarranted optimism
Why is Strategic Value Analysis also
called as the Shareholders Value Overlooking a Strategy
analysis? Type III Error
Error of not considering all good alternatives
It determines the financial value of a
company by looking at the returns it gives
its stockholders and is based on the view
that the objective of company directors is to Steps to conduct SVA
maximize the wealth of company 1. Scrutinize
stockholders.
2. Criticize
3. Question
Difference between Strategy Analysis and
SVA
  Focuses on creating brand equity &
product value.
 Consumers are actively seeking out
the product
 Used to test a product’s acceptance
in the market & obtain consumer
feedback.
Disadvantages
 Works effectively only when there is
high brand loyalty.
 Lead time is long
 Requires creating high demand for a
product
 Requires a strong marketing efforts
to convince consumers to actively
seek out the product
Lesson 12: Promotion: Pull Marketing Integrated Marketing Communications
Strategy & Integrated Marketing IMC, as a philosophical concept, dictates
Communication that all parties involved in the firm’s
communication efforts coordinate to speak
to target audience(s) with
Pull Marketing Strategy
(Pull Promotional Strategy)  One voice
 Unified message
Strategy in which a firm aims to increase the  Consistent image
demand for its products and draw (pull) Benefits or Importance of IMC
consumers to the product.
 Improved results
Pull Marketing Methods  Improved Brand Image
1. Sales Promotions and Discounts  Cost Effective
 Increased Morale
2. Advertising
 Improved Efficiency
3. Media Coverage
4. Social Media Networks AIDA Model
5. Word of Mouth AIDA model identifies cognitive stages an
individual goes through during the buying
6. Email Marketing process for a product or service.
Advantages Planning & Measuring IMC Success
 Establish direct contact with (Goals)
consumers and build customer  Understand the outcome they hope to
loyalty. achieve before they begin
 Stronger bargaining power with
retailers & distributor.  Short term or long term
  Should be explicitly defined and
measured.
Setting and Allocating the IMC Budget
 Objective and task method
 Set Objectives
 Choose media
 Determine the cost
 Rule of thumb method
 Competitive parity method
 Percentage of sales
 Available budget