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Management Accounting Business Strategy
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Management Accounting Business Strategy
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?
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Management Accounting Business Strategy
Placement in other curriculums
CIMA Enterprise Strategy E-2
CA - Business Management Module E
ACCA Business Analysis P-3
MBA Strategic Management Final semester
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Management Accounting Business Strategy
Importance in your degree an integrated approach
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?
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Management Accounting/Finance,Strategy
&
Strategic Planning
Moving around the subject of
Management Accounting Business Strategy
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Moving around the subject of
Management Accounting Business Strategy
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Moving around the subject of
Management Accounting Business Strategy
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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
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Finance
Financing / Allocation
Objectives
Acquisition / Investment
Assets / Projects
Role of Finance & ManagementAccounting ?
Strategy evaluationStrategy implementationStrategy Development
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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
Role of Finance & ManagementAccounting ?
Strategy evaluationStrategy implementationStrategy development
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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
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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 ?
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Environment
Capability
Stakeholder expectation
Organization Strategy
Strategic Fit
Finance
What is Strategy ?
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Components
What is Strategy ?
Strategy
Environment ExternalCircumstances
Synergy
Structure InternalResources
Resource Deployment
Performance
Competitive AdvantageFinance
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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
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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
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What is Strategy ?
Formulation
Business strategy
Finance Marketing
OperationsHR
Finance as an overall observer
OperationalStrategy
BusinessStrategy
CorporateStrategy
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What is Strategy ?
HR
Operations
Implementation
Finance
Marketing
Finance as an overall observer
Operational Strategy
Business Strategy
CorporateStrategy
Tactics-activitiesOperational / business plans
Operational & overall budgets
OperationalStrategy
BusinessStrategy
CorporateStrategy
?
Which venture
Diversification
Finance
Finance
Finance
Formulation
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What is Strategy ?
Implementation
HR
Operations
Finance
Mkt
Finance as an overall observer
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
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What is Strategy ?
Formulation Implementation Evaluation
HR
Operations
Finance
MarketingHR
Operations
Finance
MarketingBusiness strategy
Finance Marketing
Operations HR
Finance as an overall observer
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Performance and Strategy
FinancialPerformance ROI, ROS, ROE
OperationalPerformance Market Share,New Products,
Productivity
OrganizationalEffectiveness
StrategyPerformance
What is Strategy ?
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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
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What is Strategy ?
Other issues for successful strategy
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Management Accounting Business Strategy
Importance in your degree an integrated approach
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?
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Questions ?
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Is it difficult to arrange Finance ?
No
Uniqueness is the attraction
Strategy is the key
How to attract finance ?
What is Finance ?
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Thank You
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