Thursday, February 9, 2012

McKinsey Training Course: Business Strategy Template under ...

Financial analyses involves of looking into the financial performance of a company over time and relative to its competition growth strategy. Financial ratios are in particular necessary in comparisons with competitors. In particular, the overarching objective of business strategy is to understand whether and how companies create value . Building on all financial statements, the resulting analysis allows for either trends, ratios, or business strategy. Comparable analysis can be an internal exercise, or externally for competitors. Financial analysis is used to assess where a company?s operating issues can lie.

Activity Based Costing (ABC) analysis is a business strategy framework used to improve upon the accuracy of traditional forms of business costing, so that strategic business decisions can be fact based growth strategy. Activity Based Costing allows for true profitability to be understood around critical areas of product lines, customer segments, channels, and other markets. Whereas, in traditional costing methods, indirect costs are distributed across all products based on a standard, volume-based cost allocation, which is quite inaccurate and misleading, thus lends itself to leading to misinformed business decisions.

Strategy development has gone through 5 key stages over the years business strategy. Changes to strategic mindset represent an ever evolving, new business leaders, and emergence of disruptive technologies and trends. Today, the strategic development theme is on integrating strategic planning and implementation with a stress on the primary notions of core competencies, strategy planning and execution, and balance scorecard analysis. Strategy development started with a focus on growth strategy in the 1940s, moving to sustainable business planning in the 1960s, to growth strategy in the 1970s and ultimately to a focus on growth strategy in the present day.

After the oOening stage, that is a is among the most saturated marketing strategy. Despite stable business strategy, profitability is a different story. Due to competitive price pressures, most companies in the Scale stage fall under the ?profitability trap,? which prevents or severely constraints future growth down the Consolidation Endgame curve. Company profitability changes noticeably from each stage to another. Revenue growth is highest on the onset, as companies make territorial claims. Revenue growth remains relatively stable with the Consolidation curve. By Balance Alliance, only about 10% of the companies continue to exist. Continuous throughout Scale and Focus, we percieve a fast consolidation proces. In Scale, revenues drop slightly due to consolidation, but stabilize again inside the final two levels.

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