Strategic Business Analysis PDF

**STRATEGIC BUSINESS ANALYSIS** **A Compilation of Report** **Principles of External Auditor** **External Auditor** it is performs an audit, in accordance with specific laws or rules, of the financial statements of the company, government entity, other legal entity, or organization, and is indep...

**STRATEGIC BUSINESS ANALYSIS** **A Compilation of Report** **Principles of External Auditor** **External Auditor** it is performs an audit, in accordance with specific laws or rules, of the financial statements of the company, government entity, other legal entity, or organization, and is independent of the entity being audited. It is external auditors are public accountants who conduct audits, reviews, and other work for their clients. It is also independent of all clients, and so is in a good position to make an impartial evaluation of the financial statements and systems of internal controls of those clients. **Users of the Financial Information** - Investors - Creditors - Government Agencies - General Public All of these rely on the external auditor to present an unbiased and independent audit report. **5 FUNDAMENTALS OF EXTERNAL AUDITOR** **1. Honesty, always** Remaining honest seems obvious, but when dealing with global corporations and high-level stakeholders, the truth can be sometimes get muddled with intimidation and the pressure to please. After all, delivering negative news is not an aspect of the role which many External Auditors enjoy With the line between sugar-coating and lying easily muddled, auditors crossing lines has frequented headlines of late and perpetuated negative auditing stereotypes. Just look to the fraudulent activity within Patisserie Valerie that was missed by their auditors, and the Carillion Scandal where terminal failings were readily ignored by their accounting firm **2. Innovation and Advancement** Keeping pace with technology and advancing cognitive capabilities is in an auditor's best interest. With risk landscapes evolving, reactive auditing is a fast-track to failure. This need is particularly important when considering the increased presence of artificial intelligence and other advance technologies in the wider business environment. For external Auditors, attempting to keep pace requires two considerations. Firstly, auditors need to keep abreast with the technology pushing audit forward. When these technologies are embraced auditors are able to provide greater value. Beyond this, knowing the technologies, used by the company being audited is vital. When unknown, external auditors are unable to provide a comprehensive audit. **3. Empathy matters** Very few clients enjoy criticism and as a result external auditors will frequently find their clients entering conversations with a pre-formed negative perception where critical views are easily interpreted as nit-picking, irrelevant or simply unnecessary. With this in mind, remaining pragmatic and empathetic is needed in all client communication. Whether the client is frustrated, anxious or simply confused, external auditors should be the steady figure of composure but avoid becoming emotionally detached. On the other hand, integrity should remain uncompromised. A critical tone is sometimes required for challenging clients or serious situations. **4. Know what you are auditing** External auditors need to know what they are auditing whether a multinational aviation company or newly opened business, testing the company's product or service should always be attempted by an external auditor. Whilst sometimes easier than done, auditors should always strive to know the business they are auditing, whether this involves product testing or intensive company research. It is only with this prior research that an external auditor can provide a comprehensive audit. **5. Independence** The unsurprising final consideration is independence. Whilst almost tempting to leave off the list given its obvious requirement, remaining independent and unbiased is at the core of working in external auditor Obviously, no auditors can be truly independent when working in medium to long term arrangements. When established relationships exist, a sense of client loyalty can easily see grey areas encroach, yet, these ongoing relationships do not inherently mean auditors are best equipped for success. **External Assessment** It involves analyzing the current environment and trends that may affect an organization. It includes examining competitive and collaborative forces outside the organization to identify opportunities and threats. **Nature of External Audit** It involves gathering information on external forces like economic, social, political, technological, and competitive factors that can present opportunities or threats. Managers then evaluate this information to develop a prioritized list of the most important factors. **General Environment (Macro Environment)** The variety of factors beyond an organization's control that affect them operation and performance. **6 COMPONENTS OF GENERAL ENVIRONMENT:** **1) Political** Factors include elements such as tax policies, changes in trade restrictions and tariffs, and the stability of governments. **2) Economic** Factors include elements such as interest rates, inflation rates, gross domestic product, unemployment rates, levels of disposable income, and the general growth or decline of the economy. **3) Sociocultural** Factors include trends in demographics such as population size, age, and ethnic mix, as well as cultural trends such as attitudes toward obesity and consumer activism. **4) Technology** Factors include, for example, changes in the rate of new product development, increases in automation, and advancements in service industry delivery. **5) Environmental** Factors, also called ecological factors, include, for example, natural disasters, global warming, pollution, and weather patterns. **6) Legal** Factors include laws involving issues such as employment, health and safety, discrimination, and antitrust. **Competitive environment** It is a system where different businesses compete with each other by using various marketing channels, promotional strategies, pricing methods, etc. This system has regulations within it that companies should follow. **COMPETITIVE ANALYSIS** ======================== **Objectives:** =============== - What is competitive analysis - Purpose of Competitive Analysis - What is competitive market research - Four Reasons to Perform Competitive Analysis - Essential Aspects to Cover in Competitive Analysis Research - Competitive Analysis in Marketing - How to Do a Competitive Analysis **What is Competitive Analysis?** ================================= Competitive analysis is the process of comparing your competitors against your brand to understand their core differentiators, strengths, and weaknesses. It's an in-depth breakdown of each competitor's market position, sales & marketing tactics, growth strategy, and other business-critical aspects to see what they're doing right and find opportunities for your business. **What is Competitive Analysis?** Competitive analysis gives you a clearer picture of the market landscape to make informed decisions for your growth. That said, you have to remember that competitive analysis is an opportunity to learn from others. **Purpose Of Competitive Analysis** =================================== The purpose of a competitor analysis is to understand your competitors\' strengths and weaknesses in comparison to your own and to find a gap in the market. A competitor analysis is important because: It will help you recognize how you can enhance your own business strategy. **What is competitive market research?** ======================================== Competitive market research is a vital exercise that goes beyond merely comparing products or services. It involves an in-depth analysis of the market metrics that distinguish your offerings from those of your competitors. A through market research doesn\'t just highlight these differences but leverages them, laying a solid foundation for a sales and marketing strategy that truly differentiates your business in a bustling market. **Four Reasons to Perform Competitive Analysis** ================================================ **Identify your differentiators.** Think of competitor analysis as a chance to reflect on your own business and discover what sets you apart from the crowd. And if you're only starting out, it helps you brainstorm the best opportunities to differentiate your business. **Find competitors' strengths.** What are your competitors doing right to drive them growth? Analyzing the ins and outs of an industry leader will tell you what they did well to reach the top position in the market. **Set benchmarks for success.** A competitor analysis gives you a realistic idea of mapping your progress with success metrics. While every business has its own path to success, you can always look at a competitor's trajectory to assess whether you're on the right track. **Get closer to your target audience.** A good competitor analysis framework zooms in on your audience. It gives you a pulse of your customers by evaluating what they like, dislike, prefer, and complain about when reviewing competing brands. **Essential Aspects to Cover in Competitive Analysis Research** =============================================================== **Competitive Analysis in Marketing** ===================================== Every brand can benefit from regular competitor analysis. By performing a competitor analysis, you\'ll be able to: - Identify gaps in the market. - Develop new products and services. - Uncover market trends. - Market and sell more effectively. As you can see, learning any of these four components will lead your brand down the path of achievement. **How to Do a Competitive Analysis** ==================================== - Determine who your competitors are. - Determine what products your competitors offer. - Research your competitors\' sales tactics and results. - Take a look at your competitors\' pricing, as well as any perks they offer. - Ensure you\'re meeting competitive shipping costs. - Analyze how your competitors market their products. - Take note of your competition\'s content strategy. - Learn what technology stack your competitors use. - Analyze the level of engagement on your competitors\' content. - Observe how they promote marketing content. - Look at their social media presence, strategies, and go-to platforms. - Perform a SWOT Analysis to learn their strengths, weaknesses, opportunities, and threats. **FORECASTING TOOLS AND TECHNIQUES** ==================================== **Objectives:** =============== - Understand the importance of forecasting. - Differentiate causal methods, quantitative and qualitative forecasting methods. - Familiarize with key forecasting tools and data sources. **Forecasting** =============== Forecasts involve assumptions related to trends and events in the future. Forecasting is complex activity because of factors such as technological innovation, cultural changes, new products, improved services, stronger competitors, and shifts in government priorities, changing social values, unstable economic conditions, and unforeseen events. Managers often must rely on published forecasts to effectively identify key external opportunities and threats. - **Technological Innovation.** Rapid change of technology. - **Cultural Changes.** Costumers' preferences. - **New Products.** Once there are new products or there is an improvement it is possible that the expectations and preferences of customers will change. - **Stronger Competition.** Unanticipated competitive moves (like mergers and acquisitions or there is new product launch) - **Shifts In Government Priorities.** Regulation and policy changes (when there is an increase in tariffs there will be an impact which is an increase in production cost) - Changing Social Values. Reputation management (when there is malpractice or misalignments against public opinion it will have an impact on reputation and demand may decrease) - **Unstable Economic Conditions.** Inflation, interest rates, exchange rate (the effect is having a change in customers spending) - **Unforseen Events.** Pandemics or natural disasters When the business has predictions about what can happen in the future, they will be ready and able to plan accordingly and the strategy they will use is aligned to meet the future challenges and opportunities. **What is Forecasting?** - Used in predicting sales, measuring market impact, or determining whether you\'ll need to grow the workforce. - It helps businesses in evaluating their current state and projecting future directions in numerous key areas. - McConkey defines assumptions as the "best present estimates of the impact of major external factors, over which the manager has little if any control, but which may exert a significant impact on performance or the ability to achieve desired results. While developing plans, informed projections should be made, but reasonable assumptions based on the information at available must always be made. **Business Forecasting Techniques** =================================== - **Quantitative.** Use historical data (past event) to predict future events. This measurable, method-based, analytical mode is appropriate for several statistical forecasting needs, including short-term goals and planning. - *Linear Regression.* It is based on the assumption that the future will mirror the past. In linear regression, historical data is used to determine the relationship between independent and dependent variables. The values of the future are then predicted using this relationship. - *Business Analytics.* Involves the use of software and advanced algorithms to analyze vast amount of data. It is useful in industries where large datasets are available, they offer insights into customer behavior, market trends, and operational efficiency. - **Qualitative**. Frequently used in circumstances in which past data is unavailable or when the future is expected to differ significantly from the past. This is often used by starting business because they don\'t have past or historical data. - *Delphi Method.* A structured communication technique where a panel of experts provides forecasts through multiple rounds of questioning, with the aim of reaching a consensus. - *Market Research.* Surveys, interviews, and focus groups are conducted to gather opinions and expectations from consumers, industry experts, and other stakeholders. - *Scenario Planning.* Developing different scenarios based on potential future events and analyzing their impact on the organization. - **Causal Methods.** The process of projecting future demand using the relationship between a dependent variable (like price, promotion, weather, or seasonality) and one or more independent factors (like weather). You can plan your inventory, marketing, and price strategies based on your understanding of how various factors affect your demand by using causal forecasting. To guarantee reliability and accuracy, causal forecasting also needs thorough data collection, analysis, and validation. **Forecasting Tools** ===================== - **Cash Flow Statements** - are a helpful tool for forecasting your organization\'s needs, as having cash on hand for emergencies is an essential component of any business plan. - **Expert Reports -** pay attention to what experts in the field are saying. by doing so, you may leverage their expertise and experience and apply what you learn to your own business to produce a precise forecast. - **Industry Association Reports -** offer businesses helpful information that they may apply to the projections to produce forecasts that are more accurate. - **Internal Assessments -** creating internal reports is one of the best techniques for improving the standard of your projections. projections that focus particularly on the organization and its performance tend to be more accurate than those that rely exclusively on broad trends. additionally, internal data can be independently verified. by merging data and predictions from outside sources with your past performance, you may create precise operational projections for your business. - **Modeling Tools** - are a way to analyze data further and produce forecasts that are useful. - **Organization Charts -** an organization chart helps you prepare for any changes by showing you where you can combine departments on uncertain projects or where you might need to hire more workers as you expand. - **Performance Indicators** - knowing which metrics are most crucial to your company\'s success can also help you create projections that are accurate, focusing only on growth in the areas that will contribute to your company\'s expansion. - **Production Charts -** help you plan ahead and maintain daily operations and schedules by showing what items and inventory your business needs and when you, like me, need them. - **Public Data and Reports -** you may get the most accurate forecasts by combining internal data to examine the unique behavior of your business with broader societal trends obtained from public data - **Time Series Models -** are an effective tool for identifying trends and patterns when creating forecasts for your business. **REFERENCE:** ============== https://www.bdc.ca/en/articles-tools/marketing-sales export/marketing/how-evaluate-competition https://blog.hubspot.com/marketing/competitive-analysis-kit https://kayo.digital/kayo-how/the-importance-of-a-competitor-analysis-and-how-to-conduct one/\#:\~:text=The%20purpose%20of%20a%20competitor,enhance%20your%20own%20business%20strategy Forecasting Tools and Techniques - College Hive. https://collegehive.in/docs/5th\_sem/site/SM/Unit\_03\_External\_Analysis/3.e\_Forecasting\_Tools\_and\_Techniques.html\#qualitative-forecasting-techniques Strategic Management - Studocu. https://www.studocu.com/ph/document/university-of-batangas/fundamentals-of-business-management-1/chapter-6-strategic management/22592300?fbclid=IwY2xjawFotzNleHRuA2FlbQIxMAABHZ0FoOwH96yqiAHuM1t3OzcjShPNU2ew8OXaTy\_J27QZm74dBez0L6Zmw\_aem\_WDmPXo7Zp7b5sH\_rFgVkeQ