STRATEGIC

BUSINESS
ANALYSIS

PREPARED BY:

AY 2020-
Mae Kristine L. Montaron, CPA 2021
Faculty Module
 Strategic
Business
Analysis

LET US SHARPEN
YOUR ANALYTICAL
SKILLS!

This module contains detailed

information on how strategic business
analysis works. Analytical methods and
tools were introduced to formulate,
implement and evaluate business
strategies. Effective and efficient
business strategies can create
competitive advantage.

In this course, you will be equipped with

various theoretical approaches to
business strategy that will enable you to
arrive at a correct business decision. This
module will give you an overview on how
the corporate world revolves. May this
INTRODUCTION
module guide you formulate your own
strategy while fighting COVID-19
fearlessly.

Strategize and win the prize!

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COURSE STRATEGIC BUSINESS ANALYSIS

OUTLINE FIRST SEMESTER A.Y. 2021-2022

COURSE DESCRIPTION:

Strategic Business Analysis is a three-unit course that enables the students to understand the
importance of defining the needs of the business correctly and analyzing the external and
internal environments thoroughly before choosing a solution. Strategic analysis models and tools
are introduced to students to critically assess organizations and identify opportunities and
competitive threats arising from different business tiers. The knowledge of the key elements of
business management and strategic language will develop the student’s skills for working in
dynamic, complex and interconnected organizational settings.

A. Foundational Concepts C.3. Environmental Sustainability

A.1. Strategic contexts ad D. Strategy formulation

terminologies D.1. Types of Strategies
A.2.The Strategic management a. Integration strategies
process b. Diversification strategies
A.3 Importance of business c. Defensive Strategies
strategies d. Porter’s five generic strategies
e. Means of achieving strategies
A.5.Guidelines for effective strategic
management
D.2. Mission and Vision Analysis
A.6. How to write case analysis
a.Definition and Importance
B. International Strategic Planning b.Characteristics
c. Components
B.1. The Global Challenge d.Statement Analysis
B.2.International Operations
D.3. Internal Audit
B.3.The effect of corporate taxes
a. Nature of Internal Audit
B.4.Business climates
b. Process of performing internal audit
c. Management analysis
C. Corporate Social Responsibility
d. Marketing Analysis
C.1. Business Ethics e. Finance and accounting analysis
a. Whistle Blowing f. Breakeven analysis
b. Bribes g. Production and operations analysis
c. Workplace Romance h. Value Chain Analysis
C.2. Social responsibility
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i. The Internal Factor Information matrix. a. Resource Allocation

b.Managing Conflict
D.4. External Audit c. Matching Structure with Strategy
d.Creating a Strategy-Supportive Culture
a. Nature of External Audit
e.Production and Operations Concerns when
b. PESTEL analysis
Implementing Strategies
c. Porter’s 5 force analysis
f. Human Resource Concerns When
d. Threat of new entrants
Implementing Strategies.
e. Power of buyers
f. Threat of substitutes
F. Strategy Evaluation
g. Competitive rivalry
a. The Evaluation Process
h. Collaboration
b. Rumelt’s Criteria For Evaluating Strategies
c. The Evaluation Process
D.5 Strategy Generation and Selection d. Balanced Scorecard
a. Input Stage
b. Matching Stage G. Case Study
c. SWOT Analysis a. Business Process Walkthrough
d. Decision Stage (Choose 1 of the listed companies in the
Philippines)
E. Strategy Implementation b. Internal Audit
c.External Audit
E.1 Strategy Implementation d. Corporate Social Responsibility
a. Current Marketing Issues
b. Market segmentation H. Application of Strategies
c. Product Positioning a. Understanding the current strategies
Finance and Accounting Issues of the chosen listed entity
b. Analyzing financial reports
c.Recommend Strategies

E.2. Strategy Execution I. Presentation of Case Study

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LESSON I
FOUNDATIONAL
CONCEPTS

“The secret of getting ahead is to

get started.”- Mark Twain

DEFINING STRATEGIC BUSINESS

ANALYSIS
Strategic Business Analysis revolves around formulating, implementing, and evaluating cross-functional
decisions that enable an organization to achieve its objectives. It focuses mainly on integration of
management, marketing, finance and accounting, production and operations, research and development,
and information systems in order to achieve organizational success. (David 2015)

Understanding the environment in which a business organization is operating, along with

the organization’s interaction with its environment and the operation within the organization
itself creates s strong foundation in formulating business strategies. While the terms ‘firm,’

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‘environment,’ ‘actions,’ and ‘resources’ make up the core of the definition of strategy, it is
significant to highlight how the focus has shifted over time from achieving the firm’s goals to
improving its performance. ( Ronda-Pupo et al 2012)

Strategic contexts and terminologies

Strategies
Strategies are the means by which long-term objectives will be achieved. Business strategies may
include geographic expansion, diversification, acquisition, product development, market
penetration, retrenchment, divestiture, liquidation, and joint ventures.

Annual Objectives
Annual objectives are short-term milestones that organizations must achieve to reach long-term
objectives. Like long-term objectives, annual objectives should be measurable, quantitative,
challenging, realistic, consistent, and prioritized. They should be established at the corporate,
divisional, and functional levels in a large organization.

Long-Term Objectives
Objectives can be defined as specific results that an organization seeks to achieve in pursuing its
basic mission. Long-term means more than one year. Objectives are essential for organizational
success because they provide direction; aid in evaluation; create synergy; reveal priorities; focus
coordination; and provide a basis for effective planning, organizing, motivating, and controlling
activities

Policies
Policies are the means by which annual objectives will be achieved. Policies include guidelines,
rules, and procedures established to support efforts to achieve stated objectives. Policies are
guides to decision making and address repetitive or recurring situations

Benchmarking
A management technique associated with value chain analysis, whereby a firm compares itself
on a wide variety of performance-related criteria against the best firms in the industry, thus
establishing standards of excellence

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Business analytics
A technique designed to analyze huge volumes of data to help executives make decisions;
sometimes called predictive analytics or data mining.

Business-Process Outsourcing (BPO)

When a firm contracts with an outside firm(s) to take over some of their functional operations,
such as human resources, information systems, payroll, accounting, or customer service.

Competitive advantage
Anything a firm does especially well, compared to rival firms. For example, when a firm can do
something that rival firms cannot do, or owns something that rival firms desire, that can
represent a competitive advantage

Competitive analysis
The process of gathering and analyzing data about competitors and disseminating the data
(intelligence) on a timely basis to who needs to know in order to gain and sustain a firm’s
competitive advantages.

Cost/benefit analysis
An activity that involves assessing the costs, benefits, and risks associated with marketing
decisions. Three steps are required to perform this: (1) compute the total costs associated with a
decision, (2) estimate the total benefits from the decision, and (3) compare the total costs with
the total benefits

Contingency plans
Alternative plans that can be put into effect if certain key events do not occur as expected.

Feasibility
A way to evaluate strategies, i.e. to determine if a strategy is capable of being carried out within
the physical, human, and financial resources of the firm

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External audit
Process of identifying and evaluating trends and events beyond the control of a single firm, in
areas such as social, cultural, demographic technology, economic, political, and competition;
reveals key opportunities and threats confronting an organization, so managers can better
formulate strategies.

Internal audit
The process of gathering and assimilating information about the firm’s management, marketing,
finance/ accounting, production/operations, R&D, and MIS operations. The purpose is to
identify/evaluate/prioritize a firm’s strengths and weaknesses

Vision and Mission Statements

Many organizations today develop a vision statement that answers the question “What do we
want to become?” Developing a vision statement is often considered the first step in strategic
planning, preceding even development of a mission statement. On the other hand, Mission
statements are enduring statements of purpose that distinguish one business from other similar
firms. A mission statement identifies the scope of a firm’s operations in product and market
terms.

The Strategic Management Process

The strategic-management process consists of three stages: strategy formulation, strategy

implementation, and strategy evaluation.

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Figure 1-A: Strategic Management Model (David, 2015)

Strategy formulation includes developing a vision and mission, identifying an organization’s

external opportunities and threats, determining internal strengths and weaknesses, establishing
long-term objectives, generating alternative strategies, and choosing particular strategies to
pursue.

Strategy implementation requires a firm to establish annual objectives, devise policies,

motivate employees, and allocate resources so that formulated strategies can be executed.
Strategy implementation includes developing a strategy-supportive culture, creating an effective

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organizational structure, redirecting marketing efforts, preparing budgets, developing and using
information systems, and linking employee compensation to organizational performance

Strategy evaluation is the final stage in strategic management. Managers desperately need to
know when particular strategies are not working well; strategy evaluation is the primary means
for obtaining this information. All strategies are subject to future modification because external
and internal factors are constantly changing. Three fundamental strategy-evaluation activities
are
(1) Reviewing external and internal factors that are the bases for current strategies, (2)
measuring performance, and (3) taking corrective actions.

Importance of Business Strategies

Strategic management allows an organization to be more proactive than reactive in shaping its
own future; it allows an organization to initiate and influence (rather than just respond to)
activities—and thus to exert control over its own destiny. Through strategies, businesses can
build competitive financially or non-financially.

Research indicates that organizations that use strategic-management concepts are more
profitable and successful than those that do not.16 Businesses using strategic-management
concepts show significant improvement in sales, profitability, and productivity compared to
firms without systematic planning activities. High-performing firms tend to do systematic
planning to prepare for future fluctuations in their external and internal environments. Firms
with planning systems more closely resembling strategic-management theory generally exhibit
superior long-term financial performance relative to their industry.

Besides helping firms avoid financial demise, strategic management offers other tangible
benefits, such as an enhanced awareness of external threats, an improved understanding of
competitors’ strategies, increased employee productivity, reduced resistance to change, and a
clearer understanding of performance–reward relationships. Strategic management enhances
the problem-prevention capabilities of organizations because it promotes interaction among
managers at all divisional and functional levels. Firms that have nurtured their managers and

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employees, shared organizational objectives with them, empowered them to help improve the
product or service, and recognized their contributions can turn to them for help in a pinch
because of this interaction.

Guidelines for Effective Strategic Management

Strategic management must not become ritualistic, stilted, orchestrated, or too formal,
predictable, and rigid. Words supported by numbers, rather than numbers supported by words,
should represent the medium for explaining strategic issues and organizational responses. A key
role of strategists is to facilitate continuous organizational learning and change. R. T. Lenz offers
six guidelines for effective strategic management:
1. Keep the process simple and easily understandable.
2. Eliminate vague planning jargon.
3. Keep the process non-routine, so vary assignments, team membership, meeting formats,
settings, and even the planning calendar.
4. Welcome bad news and encourage devil’s advocate thinking.
5. Do not allow technicians to monopolize the planning process.
6. To the extent possible, involve managers from all areas of the firm.

How to write case analysis

In performing a strategic-management case analysis, you must

 Understand enterprise architectures and corporate cultures

 Conduct capability analysis
 Identify business opportunities and threats
 Recognize organizational strengths and weaknesses
 Analyze business problems
 Brainstorm potential solutions
 Perform feasibility and risk analysis
 Compare alternatives to identify pros and cons
 Apply cost benefit analysis
 Scope change initiatives based on organizational parameters
 Develop a business case for change

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EXCELLENT
STRATEGIC
MANAGEMENT
SHOWCASED
Singapore Airlines
Singapore Airlines
Limited (SIA) is the 5-star airline of Singapore. Singapore Airlines operates trans-Pacific flights,
including the world’s longest non-stop commercial flights from Singapore to Los Angeles and
Newark on the Airbus A340-500. In late 2013, the company ceased offering those two long flights
although Los Angeles is still served via Tokyo-Narita. The luxury airline has a strong presence in
Asia. A member of the Star Alliance, Singapore Airlines carried around 18 million passengers in
2012, up from 16.9 million in 2011.
Singapore Airlines is very well managed strategically. The company has diversified
airline-related businesses, such as aircraft handling and engineering, and owns SilkAir that
manages regional flights to secondary cities with smaller capacity requirements. Singapore
Airlines operates passenger services to more than 60 cities in over 30 countries around the world.
Within Asia, passengers can connect to over 30 cities served by SilkAir. The company is the official
sponsor of Singapore national football team and has been marketing Singapore Girl as central
image to the airline’s brand. Fortune in 2013 ranked Singapore Airlines as the 31st most admired
company in the world outside the United States. In December 2012, Singapore Airlines sold its 49
percent stake in Virgin Atlantic for US$360 million.
In April 2012, Singapore Airlines phased out the 747 from its fleet after 40 years of
service. A final round-trip commemorative flight was operated from Singapore to Hong Kong. In
December 2012, Singapore Airlines began using the A380 to San Francisco via Hong Kong as a
winter seasonal service, but still uses a Boeing 777-300ER for the remainder of the year. In May
2013, S i n g a p o r e Airlines made a commitment to order 30 Boeing 787-10X to be delivered in
2018-2019 timeframe. In September 2013, Singapore Airlines began using the Airbus A380 on
selected flights to and from Shanghai, China.
Singapore Airlines’ passenger carriage (measured in revenue passenger kilometers) grew
8.6 percent in August 2013 year-on-year along with a 3.1 percent increase in capacity (measured
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in available seat kilometers). The company’s passenger load factor (PLF) improved by 4.1
percentage points to 82.4 percent as the number of passengers carried in August 2013 increased
by 11.7 percent to 1.7 million. Load factors improved across all regions, bolstered by strong
leisure travel demand during the Lebaran/Hari Raya holidays, coupled with returning summer
traffic. Traffic to West Asia and Africa also saw improvements.
SilkAir’s systemwide passenger carriage in August 2013 increased 10.7 percent year-on-
year along with a 13.4 percent growth in capacity. For that month, SilkAir’s PLF was 1.8
percentage points lower at 71.7 percent. Singapore Airlines’ cargo traffic (measured in
freighttonne-kilometres) was 5.7 percent lower in August 2013 year-on-year, while cargo
capacity was reduced by 5.0 percent. (David,2015).

Case Analysis #1
Guide Questions:

1. What is Singapore Airlines’ competitive advantage? How can this advantage be sustained?
2. Singapore Airlines has done very well in 2013. Briefly explain whether this strategy will be just as
effective going forward
3. Does Singapore Airlines have its strategic plan posted on its website? Should the company do so?
Why or why not?
4. Strategic management is all about gaining and maintaining competitive advantage. Explain it
using the case of Singapore Airlines.

(Target date of Submission: February 15, 2022)

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