Icmap Sm Lac 1

8/3/2019 Icmap Sm Lac 1

1/28

1

Management Accounting Business Strategy


2/28

2


Today's Objectives

Placement in other curriculums

Importance in your degree

Importance in your organization, career and life

Moving around the subject

First view of strategy and strategic management /planning model

How we study this subject?

How we have to study this subject?

How we will go for the subject?


3/28

3


Placement in other curriculums

CIMA Enterprise Strategy E-2

CA - Business Management Module E

ACCA Business Analysis P-3

MBA Strategic Management Final semester


4/28

4


Importance in your degree an integrated approach

Importance in your organization, career and life Moving around the subject


How we study this subject? How we have to study this subject?



5/28

5

Management Accounting/Finance,Strategy

&

Strategic Planning

Moving around the subject of



6/28

6




7/28

7




8/28

8

Role of Finance & ManagementAccounting ?

Finance is blood of a business

Finance is management of money

Finance is a process of investment / allocation and financingdecision

Finance is acquisition / investment, financing / allocation

and management of assets with an overall goal in mind


9/28

9

Finance

Financing / Allocation

Objectives

Acquisition / Investment

Assets / Projects


Strategy evaluationStrategy implementationStrategy Development


10/28

10

Investment Decisions

Relates to allocation of funds in long term projects and their evaluation

Working Capital DecisionsRelates to allocation of funds for regular operations (Short term) of longterm projects

Financing Decisions

Relates to arrangement of funds for various investment and workingcapital opportunities through different modes of financing

Distribution DecisionsRelates to distribution of returns from investments

Types of Financial Decisions


Strategy evaluationStrategy implementationStrategy development


11/28

11

What is Strategy ?

An organizations strategy consists of the competitive moves,internal operating approaches, and action plans devised bymanagement to produce successful performance.

Strategy as purposive action the resource allocations thatorganizations plan and implement in order to position themselves inmarkets and to compete with other

Strategy as the fit between a firms use of resources and its

environment

Definition

Strategies are the means by which long term objectives areachieved.

Strategy as an ongoing, unplanned and unintended process ofinteraction between the firms internal structures and itsenvironment


12/28

12

An organization should find a match between what goods and servicesthey can best provide against what goods and services are beingdemanded or likely to be demanded by potential customers

Strategy is a Strategic Fit

Example:

Research undertaken by Bank 1 has shown that a greater number ofautomobile purchases are choosing to lease rather than purchase a car witheach passing month

Bank 1 then analyses whether it should introduce lease financing as a newproduct

Bank 1 has a large customer bas that they can market this product to ,however their rates will not be as competitive as those offered by dealerships

Bank 1 decides to go ahead and offer lease financing as a product. Tocompensate for the higher rates. Bank 1 will offer a longer payback period

What is Strategy ?


13/28

13

Environment

Capability

Stakeholder expectation

Organization Strategy

Strategic Fit

Finance

What is Strategy ?


14/28

14

Components

What is Strategy ?

Strategy

Environment ExternalCircumstances

Synergy

Structure InternalResources

Resource Deployment

Performance

Competitive AdvantageFinance


15/28

15

What is Strategy ?

Operational Strategy

Business Strategy

CorporateStrategy

Estimationof viable price

Whichsegment to sell

LiquidationStrategy

Finance

Finance

Finance Reduce by20%in one year

Reduce Complaints

CustomerSatisfaction


16/28

16

Business strategy

Finance Marketing

What is Strategy ?

HR

Operations

Formulation Implementation Evaluation

Finance

Marketing HR

Operations

Finance

Marketing

Operations HR

Finance as an overall observer


17/28

17

What is Strategy ?

Formulation

Business strategy

Finance Marketing

OperationsHR


OperationalStrategy

BusinessStrategy

CorporateStrategy


18/28

18

What is Strategy ?

HR

Operations

Implementation

Finance

Marketing


Operational Strategy

Business Strategy

CorporateStrategy

Tactics-activitiesOperational / business plans

Operational & overall budgets

OperationalStrategy

BusinessStrategy

CorporateStrategy

?

Which venture

Diversification

Finance

Finance

Finance

Formulation


19/28

19

What is Strategy ?

Implementation

HR

Operations

Finance

Mkt


OperationalStrategy

BusinessStrategy

CorporateStrategy

Tactics-activitiesOperational / business plans

Operational & overall budgets

Reduce by20% in one year

Reducecomplaints

Customersatisfaction

Finance

Finance

Finance

Formulation

Vision

Mission

Strategieslong term

objectives/Goals

AnnualObjectives

Measures/standard

O1 O2

AI1 AI2 AI3

M1M2M3

T1 T1 T1Targets

Initiatives/Activities


20/28

20

What is Strategy ?

Formulation Implementation Evaluation

HR

Operations

Finance

MarketingHR

Operations

Finance

MarketingBusiness strategy

Finance Marketing

Operations HR



21/28

21

Performance and Strategy

FinancialPerformance ROI, ROS, ROE

OperationalPerformance Market Share,New Products,

Productivity

OrganizationalEffectiveness

StrategyPerformance

What is Strategy ?


22/28

22

Strategic Planning Model

Reassess anddevelop the

Organizationsmission andobjectives

Reassess anddevelop the

Organizationsmission andobjectives

FormulatestrategiesFormulatestrategies

ImplementstrategiesImplementstrategies

Evaluateresults

Evaluateresults

Analyzethe

environment

Analyzethe

environment

IdentifyOpportunities

Andthreats

IdentifyOpportunities

Andthreats

Analyzethe

Organizationsresources

Analyzethe

Organizationsresources

IdentifyStrengths

andweaknesses

IdentifyStrengths

andweaknesses

Identify theOrganizationsCurrent vision

mission,Objectives, and

Strategies

Identify theOrganizationsCurrent vision

mission,Objectives, and

Strategies

First view of Strategic management


23/28


24/28

24

What is Strategy ?

Other issues for successful strategy


25/28

25


Importance in your degree an integrated approach

Importance in your organization, career and life Moving around the subject


How we study this subject? How we have to study this subject?



26/28

26

Questions ?


27/28

27

Is it difficult to arrange Finance ?

No

Uniqueness is the attraction

Strategy is the key

How to attract finance ?

What is Finance ?


28/28

28

Thank You

Icmap Sm Lac 1

Documents

Transcript of Icmap Sm Lac 1