Kwame Nkrumah University of

Science & Technology, Kumasi, Ghana

BUSINESS ANALYTICS STRATEGY

BDA 511
Dr. Matilda Kokui Owusu-Bio
Supply Chain & Information Systems Department
School of Business
[email protected]

1
INTRODUCTION TO
STRATEGY
ANALYTICS
UNIT 1
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UNIT OVERVIEW

• Introduction
• Definitions of Strategy
• Essence of Strategic management
• Recap of Analytics
• Concept of Strategy Analytics
• Role of Data Analytics in Strategic
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INTRODUCTION

• Business digitalization is the process of

transforming traditional business processes
and models using digital technologies. It
involves the integration of digital
technology into all aspects of a business
(operations, management, and customer
interactions)
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INTRODUCTION

• Business digitalization is changing the

content of strategic analysis and more
than ever executives now need to
understand advanced forms of data
analytics to articulate and evaluate
strategies.

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INTRODUCTION
The primary purpose of analytics is to significantly improve
organizational decision-making quality by:
1.Leveraging Data for Actionable Insights:
For instance, Amazon leverages customer data to provide
personalized recommendations, enhancing user experience and
driving sales.
2.Deepening Organizational Understanding:
Starbucks uses analytics to understand consumer behavior,
enhancing customer loyalty programs.
3.Facilitating Informed, Data-driven Decisions:
For example, hospitals employ analytics to predict patient
admission rates, manage resources effectively, and improve
patient care outcomes.
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KEY BENEFIT AND STRATEGIC OUTCOMES EXAMPLE
Enhancing Operational Efficiency and Walmart streamlines inventory management
Effectiveness to prevent stockouts
Optimizing Resource Allocation and Delta Airlines optimizes pricing strategies and
Utilization seat allocation
Identifying Market Opportunities and Netflix analyzes viewing patterns for content
Customer Segments creation decisions
Improving Customer Experience and JPMorgan Chase provides personalized
Satisfaction financial services
Advancing Product and Service Innovation Apple aligns product development with
consumer preferences
Reducing Risk and Enhancing Decision- Insurance companies accurately assess risk for
making Accuracy premium pricing
Boosting Revenue and Profitability Uber implements dynamic pricing strategies

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STRATEGY
STRATEGY is defined as:
• A comprehensive plan that sets direction and guides the
allocation of resources to achieve long-term objectives;
• An action plan that identifies long-term direction and guides
resource utilisation to accomplish an organization’s mission
and objectives with sustainable competitive advantage
• An integrated framework that aligns an organization's
mission, vision, core competencies, and competitive
environment into a coordinated roadmap for achieving long-
term success.
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STRATEGY
STRATEGY is defined as:
• Strategy is a high-level plan or approach designed to
achieve a specific goal or set of goals in a complex or
uncertain environment.
• It involves making choices and trade-offs among
competing priorities, and requires analyzing the current
situation, anticipating future trends, and identifying
opportunities and risks.
• An effective strategy requires a clear understanding of the
organization's goals.
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LEVELS OF STRATEGY

There are four distinct levels of Strategy:

1. Corporate Level Strategy
2. Business Level Strategy
3. Functional Strategy
4. Operational Strategies

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STRATEGIC MANAGEMENT
• Defined as the art and science of formulating,
implementing and evaluating cross – functional
decisions that enable an organization to achieve its
objectives.
• Refers to the managerial process of forming a
strategic vision, setting objectives, crafting a strategy,
implementing and executing the strategy and then
over time initiating whatever corrective adjustments
in the vision, objectives, strategy and execution and
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STRATEGIC MANAGEMENT

▪Strategic management is basically the process to

define strategies and monitoring its
implementation.
▪Strategies are inherently future-focused, often
requiring decisions based on unpredictable nature
of events. This is especially true when strategies
don't simply extend past trends thus presenting
risks.
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STRATEGIC MANAGEMENT PROCESS

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STRATEGIC MANAGEMENT PROCESS
The components of the Strategic Management Process include:
1.Mission and Vision of the Business
Defines the organization's fundamental purpose and direction.
2.Internal Analysis
Examines resources, capabilities, and sources of competitive advantage (both static and
dynamic).
3.External Analysis
Analyzes macro-environmental factors (using frameworks like PESTE) and industry factors
(Porter’s Five Forces, Industry Life Cycle).
4.Strategy Design
Involves competitive positioning, dynamic resource management, strategies tailored for
start-ups, mature businesses, and regeneration.
5.Strategy Implementation
Covers organizational design and establishing performance measurement systems.
6.Feedback Loops
Short-term, medium-term, and long-term feedback mechanisms ensure continuous
improvement and adaptability.
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1. VISION AND MISSION

• Vision and Mission statements are critical components

of the strategic management process.

• They provide guidance and direction to an

organization, helping to ensure that the whole firm is
working toward the same goals and objectives.
• They provide a clear and compelling direction for the
organization.

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1. VISION AND MISSION
• A vision statement is a broad and inspirational statement
that outlines what an organization hopes to achieve in the
long-term.
• It reflects the organization's aspirations, values, and
purpose, and it should inspire and motivate employees,
customers, and other stakeholders.
• It outlines the future goals of the company. For example:
“Google's vision statement is "to provide access to the world's
information in one click.” and
“Amazon's vision is "to be Earth's most customer centric
company."
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STRATEGIC MANAGEMENT PROCESS: MISSION

• A mission statement, is a more specific

statement that describes an organization's purpose,
goals, and strategy.
• It describes the company's current operations
and purpose.
• It outlines what the organization does, who it
serves, and how it creates value.

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STRATEGIC MANAGEMENT PROCESS: MISSION

A well-crafted mission statement should be clear,

concise, and memorable. For example;
• Coca-Cola's mission statement is "to refresh the
world in mind, body, and spirit, and inspire
moments of optimism; to create value and make
a difference.”
• Google's mission is "to organize the world's
information and make it universally accessible
and useful."
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2. EXTERNAL ANALYSIS

• External analysis is a critical component of the strategic

process management, which involves the identification
and evaluation of the external factors that can impact a
company's operations and strategic goals.
• This analysis provides valuable insights into the
opportunities and threats that the company faces in the
external environment.
• There are various tools and frameworks that companies
can use to conduct external analysis, including:
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2. EXTERNAL ANALYSIS
There are various tools and frameworks that companies can use
to conduct external analysis. These include;
1.PESTEL Analysis: It evaluates the Political, Economic,
Social, Technological, Environmental, and Legal factors that can
impact a company's operations.
2.Porter's Five Forces: It analyzes the competitive forces
within an industry and the attractiveness of the industry to
potential new entrants.
3.Industry Analysis: This involves examining the trends and
dynamics within a particular industry, including the market size,
growth rate, and competitive landscape.
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Tool Description Analytics-related Example
PESTEL Analysis Evaluates Political, Economic, An analytics firm may use
Social, Technological, economic data to predict
Environmental, and Legal factors consumer spending patterns and
affecting a company. adjust marketing strategies
accordingly.
Porter's Five Forces Assesses industry Uber applies analytics to evaluate
competitiveness and the threat competitive intensity and market
of new entrants. entry barriers when expanding
into new regions.

Industry Analysis Analyzes trends, market size, Netflix uses analytics to identify
growth, and competition within shifts in viewer preferences,
an industry. guiding investment in original
content and market expansion
strategies.
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3. INTERNAL ANALYSIS
• Internal analysis is a critical step in the strategic
management process, where an organization
evaluates its internal resources, capabilities, and
core competencies.
• It involves a systematic and comprehensive
examination of an organization's internal
environment to identify Strengths, Weaknesses,
Opportunities, and Threats (SWOT).

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3. INTERNAL ANALYSIS
• Internal analysis focuses on the organization’s
Internal operations, Structure, Culture, and
Resources, as well as its capacity to effectively
implement its strategies.
• It is crucial because it helps organizations to
understand their Competitive advantages, their
weaknesses, and how they can leverage their
strengths to overcome their weaknesses and
capitalize on opportunities.
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STRATEGIC MANAGEMENT PROCESS:
INTERNAL ANALYSIS
Some frameworks that can be used to conduct Internal
analysis by firms are:
1.Resource-based view (RBV): This framework
emphasizes an organization's resources and capabilities as
the key drivers of its competitive advantage. It helps
organizations to identify their unique resources and
capabilities, how they can leverage them to create value for
their stakeholders.
Example : Secret formula for Coca-Cola syrup, Global
distribution network and Strong marketing and brand building
capabilities.
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3. INTERNAL ANALYSIS

1.Value chain analysis: This framework breaks

down an organization's activities into primary and
support activities and helps identify areas where
the organization can create value and reduce costs.
Example : Coca-Colas ability to charge a premium
over generic sodas and Maintaining a dominant
market share in the soft drink industry.

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3.INTERNAL ANALYSIS

3. SWOT analysis: This tool helps organizations

identify their,
▪ Internal strengths and weaknesses and
▪ External opportunities and threats.
It helps organizations to develop strategies that
leverage their strengths and address their
weaknesses to take advantage of opportunities while
mitigating potential threats.

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4. STRATEGY DESIGN

• Strategy design is a critical step in the strategic

management process, where an organization
formulates and selects strategies that will guide its
operations and help it achieve its goals and
objectives.
• It involves identifying and evaluating potential
options and selecting the most appropriate
strategy to achieve the desired outcomes.
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5. STRATEGY DESIGN
1.Defining the Vision and Mission
2.Conducting a Situational Analysis: (External and
Internal analysis)
3.Setting Objectives: Objectives are specific and
measurable targets that an organization wants to
achieve.
4.Identifying Potential strategies: Based on the
situational analysis and objectives, an organization
can identify potential strategies that will help it
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5. STRATEGY DESIGN

5. Evaluating potential strategies

6. Selecting the most appropriate strategy
7. Developing an action plan: Once a strategy has
been selected, an organization needs to develop
an action plan to implement the strategy. The
action plan should include specific tasks,
timelines, and responsibilities for each stage of
the implementation process.
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6. STRATEGY IMPLEMENTATION

• The implementation stage is a critical component

of the strategic management process because it is
the stage where the strategy is put into practice.

• Strategy implementation is the process of putting a

selected strategy into action to achieve the desired
goals and objectives.
•
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6. STRATEGY IMPLEMENTATION

• It involves translating the strategy into specific

actions and allocating the necessary resources,
skills, and competencies to execute the plan
effectively.

• Effective implementation of the strategy is

essential to achieving the desired goals and
objectives of the organization.
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6. STRATEGY IMPLEMENTATION
Some key steps involved in strategy implementation are:
1. Developing an implementation plan: It should
include specific tasks, timelines, responsibilities, and
budgets.
2. Assigning responsibilities and roles: This will help
to ensure that everyone knows what is expected of them,
and there is accountability for achieving the desired
outcomes.
3. Allocating resources: Adequate resources (financial,
human, and physical resources), must be allocated to
support the implementation of the strategy.
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6.STRATEGY IMPLEMENTATION
4.Communicating the strategy: It is essential to
communicate the strategy to all relevant stakeholders,
including employees, customers, suppliers, and
shareholders.
5.Monitoring progress: This may involve collecting and
analyzing data, tracking key performance indicators, and
making adjustments to the implementation plan as required.
6.Addressing obstacles: Identify and address any obstacles
or challenges that arise during the implementation process.
This may involve adjusting the strategy, reallocating
resources, or providing additional training and support to
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HOW TO DEFINE A PROBLEM AS STRATEGIC
A problem is considered strategic when it directly affects an
organization's ability to achieve its mission, vision, and long-term goals,
demanding high-level decision-making and resource commitment.
Strategic problems typically require comprehensive analysis, innovative
thinking, and strategic foresight. Their resolution significantly impacts the
organization's market position, competitiveness, and future sustainability.
Unlike operational problems, which often involve routine or short-term
decisions, strategic problems encompass issues such as responding to
disruptive market innovations, handling shifts in consumer preferences,
adapting to technological advancements, and navigating major regulatory
changes.
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HOW TO DEFINE A PROBLEM AS STRATEGIC
1. Breadth of scope.
2. Complexity and inter-relatedness.
3. Enduring effects
4. Significant time lag
5. Disagreement.
6. Challenging the status quo and coordination of large
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HOW TO DEFINE A PROBLEM AS STRATEGIC

1. Breadth of Scope: It is the existence of effects

in and outside of the organization involving
multiple stakeholders:
• Owners (individual and institutional
shareholders),
• External (customers, suppliers, local
communities, governmental agencies, general
society), and
• Internal (employees and managers) with
multiple, vague and conflicting objectives.
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HOW TO DEFINE A PROBLEM AS STRATEGIC
2.Complexity and inter-relatedness of
decision‐making context where the interactions between
many factors require important coordination in the
present and future.
Example: A global retailer considering sustainability
will face a complex problem that touches on supply
chain logistics, sourcing policies, branding, and
compliance with international environmental
regulations.

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HOW TO DEFINE A PROBLEM AS STRATEGIC

3. Enduring effects usually of an irreversible

nature with a high level of risk since it involves
committing potentially inflexible resources against
expected futures that might never materialize
affecting the organization’s prosperity and survival.
Example: An automotive manufacturer's decision to
invest in electric vehicle technology will have enduring
effects on its product lineup, capital allocation, and
workforce skills development

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HOW TO DEFINE A PROBLEM AS STRATEGIC

4.Significant time lag before impact, with

widening uncertainty over the timescale involved,
which may generate agency problems such as
making no decision or leaving the outcome to
chance.
Example: Pharmaceutical companies investing in R&D for
a new drug will experience a significant time lag before
they know if the drug is viable, let alone profitable.

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HOW TO DEFINE A PROBLEM AS STRATEGIC

5.Disagreement about the motivation for, and the

direction and nature of the strategic problem since
strategic problems have no obvious right answers
because of the many uncertainties surrounding their
future impacts.
Example: A media company's decision to either double down on
traditional broadcasting or pivot aggressively to streaming
services can lead to disagreements at the executive level due to
differing visions of the future media landscape.

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HOW TO DEFINE A PROBLEM AS STRATEGIC

6.Challenging the status quo and coordination of

large number of people and creating a politicized
setting where change is contested and the coordination
of a large number of people is complex and difficult due
to the significant scale and importance of the strategic
decision to solve the problem.
Example: A consumer goods company changing its
distribution model from traditional retail to direct-to-
consumer online sales will challenge the established sales
and distribution status quo.
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WHY STRATEGIC ANALYTICS
▪Strategic analytics is a critical component of the
strategic management process. It involves using
data and analytical tools to identify patterns,
trends, and insights that can inform strategic
decision-making.
▪It answers the question of how quantitative and
qualitative information can be used to make
strategic decisions.
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WHY STRATEGIC ANALYTICS: RECAP
▪Analytics is the practice of capturing, managing,
and analyzing data to drive business strategy and
performance by turning raw Data into
Information.

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ANALYTICS
Analytics is the use of:
▪Data,
▪Information technology,
▪Statistical analysis,
▪Quantitative methods, and
▪Mathematical or computer-based models
Mainly to help organizations gain improved insight about
their business operations and make better, fact-based
decisions.
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ANALYTICS
Analytics consists of the systems, tools, and techniques
that:
i. Help understand the patterns in data
• Has a change really occurred (or not occurred)?
ii. Identify why a change has (or has not) occurred
iii.Suggest what the next logical steps should be
• Correct negative trends or encourage positive
trends

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EXAMPLES OF APPLICATION
▪ Pricing: Setting prices for consumer and industrial goods,
government contracts, and maintenance contracts
▪ Customer segmentation: Identifying and targeting key customer
groups in retail, insurance, and credit card industries
▪ Merchandising: Determining brands to buy, quantities, and
allocations
▪ Location: Finding the best location for bank branches and ATMs,
or where to service industrial equipment
▪ Social Media: Understand trends and customer perceptions;
assist marketing managers and product designers.

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Type of Focus Example
Analytics
Descriptive Focuses on summarizing and interpreting A marketing team analyzes website traffic data to see which
Analytics historical data to identify patterns and trends. product pages are most visited.

Diagnostic Delves into historical data to understand the A sales manager uses sales data to identify regions with declining
Analytics causes and factors behind past performances sales and investigate the reasons behind the drop.
or events.
Predictive Utilizes statistical models and forecasting An e-commerce company uses historical sales data and customer
Analytics techniques to make predictions about future behavior to predict demand for upcoming holidays.
outcomes based on historical data.
Prescriptive Goes beyond predicting future outcomes by A financial advisor uses customer data and market trends to
Analytics recommending actions to achieve desired recommend investment strategies.
outcomes or mitigate risks.
Cognitive Utilizing AI for advanced insights by mimicking A customer service department uses sentiment analysis to identify
Analytics human-like intelligence to extract deeper customer satisfaction based on social media conversations,
insights from vast amounts of data identifying positive and negative sentiment but also understand the
reasons behind them

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EXAMPLES OF ANALYTICS TOOLS

Type of Analytics Description Examples

Text Analytics This type of analytics is used to derive- Analyzing customer feedback from surveys to
meaningful information from textual dataimprove products or services.
sources. It involves analyzing texts from various- Monitoring social media channels for brand
platforms to understand sentiments, trends, andsentiment and customer engagement.
patterns.
Data Analytics Focuses on the application of data mining and- Retail chains using purchase history data to
statistical analysis to decode patterns,identify buying patterns and optimize inventory.
correlations, and insights from structured- Financial firms employing predictive models to
datasets. assess credit risk and detect fraudulent activities.
Visual Analytics Centers on the analysis and visualization of data- Social network analysis to identify influencers
to understand complex relationships, with aand understand community dynamics.
current emphasis on predicting social- Using graph-based techniques to detect clusters
connections and detecting community structures or communities within large networks, such as
through graphical representations. identifying subgroups within social media
platforms or customer segments.

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INFORMATION TECHNOLOGY: DIGITAL DATA
STREAMS AND TRADITIONAL DATA MANAGEMENT
▪Digital data streams flowing from a multitude of
sources most of them without being controlled by
the companies: unstructured, fast and growing
continuously driven by the world outside.
▪Traditional data warehouses store the data
generated mostly by transactional and internal
systems: structured, controlled, slow, driven by the
design of the business.
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Aspect Digital Data Streams (Big Traditional Data Warehouses
Data)
Structure Unstructured, semi-structured Structured

Speed of Real-time, fast Scheduled, slow

Generation
Source External, multiple uncontrolled Internal, controlled operational
sources systems
Purpose Real-time insights, predictive Historical analysis, periodic
analytics reporting

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WHY STRATEGIC ANALYTICS
• Strategy Analytics works on the basis of
providing a reasonable understanding of how
a variety of quantitative methods, in
conjunction with structured and unstructured
data, can be used to help strategic decision
making in any organization.
• It enables business to use existing
information to better address problems and
seize opportunities.
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WHY STRATEGIC ANALYTICS
A strategy that ensure analytics development and
capabilities are in alignment with enterprise
quality and performance goals
• Helps to identify optimal use of analytics which
can mean the difference between a “collection of
reports” versus a high-value information resource
and
• Avoids the “all dashboard, no improvement”
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WHAT IS STRATEGY ANALYTICS?
Strategy Analytics is the integration of ;
• Strategic management (in terms of processes) with
• Analytics (in terms of data management and modes of
engagement)
▪Strategic analytics refers to the use of data analysis,
statistical methods, and predictive modeling to inform
and guide long-term business strategy and decision-
making.
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THE TYPE OF THE RELATIONSHIPS THAT EXIST
BETWEEN STRATEGIC MANAGEMENT AND
ANALYTICS?
1. Strategic management is dissociated from the use of
analytics

2. Strategic management defines the use of analytics (modes

of engagement)

3. Strategic management maintains a dialogue with analytics

(mutual interaction)

4. Strategic management has a holistic perspective

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RELATIONSHIP CONSEQUENCE EXPLANATION

Strategic Management Analytics is used on Companies do not have a clear strategy related to
is dissociated from the an ad hoc basis data management and information systems so data
is not used for strategic decision making. Analysis is
use of analytics driven by erratic users’ requests of information and
quantitative models and business analytics is
assessed by the speed on answering the request

Strategic Management Analytics supports Analytics is mostly employed for monitoring

defines the use of monitoring strategy the achievement of strategic objectives but there is
no feedback from analytics to strategic
analytics. performance management. Analysis has a reactive purpose
providing reports, or quantitative models, for
functional areas or individual departments to
support the achievement of strategic objectives

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RELATIONSHIP CONSEQUENCE EXPLANATION
Strategic Analytics supports Strategic management employ
Management strategy innovation analytics to improve the learning
maintains a by offering insights process about the performance of the
dialogue with from data as well business. Analysis not only reports
analytics as testing the the achievement of the objectives but
robustness of also uncovers the reasons for the
strategic ideas current performance. Analytics
practice is based on strong
management science competencies
and technological resources to
support the dialogue. Information is
used to adapt and optimize strategy
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RELATIONSHIP CONSEQUENCE EXPLANATION

Strategic Analytics is used Information and analysis is considered as a

management has a as a strategic strategic resource. Analytics is responsible
for analyzing and identifying opportunities
holistic resource
and threats in the market and issues in the
perspective firm. Strategic management uses
systematically information to develop
strategies. The strength of Analytics resides
in people’s competencies related to strategic
development processes. People have both
skills and knowledge of strategy and
analytics in all organizational levels
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Relationship Type Description Example
Strategic management is Analytics is minimally or inconsistently used. Kodak failed to use analytics to anticipate the shift
dissociated from analytics Decisions rely on intuition or past experiences, from film to digital photography, relying instead on
with limited data-driven insights. traditional market research and intuition, which
ultimately led to significant market share loss.

Strategic Management Analytics primarily tracks the implementation Traditional retail chains using basic sales dashboards
defines the use of of existing strategies. Analytics serves mainly for periodic performance tracking without deeper
Analytics as a monitoring tool rather than shaping analysis, missing opportunities to adapt swiftly to
strategies proactively. changing consumer preferences (e.g., Sears).

Strategic Management Analytics supports strategic decisions by Netflix continuously adjusts its content strategies
maintains a dialogue with providing real-time insights and feedback. based on analytics-driven insights, responding
Analytics (Mutual Both management and analytics interact dynamically to viewer trends, and refining decisions
Interaction) continuously to refine strategic actions. regularly.
Strategic Management Analytics is central and fully integrated into all Amazon integrates analytics throughout every
with a Holistic Analytics strategic processes. Data analytics informs department, consistently using data insights at all
Perspective strategic decisions, innovation, resource organizational levels to drive strategic choices in
allocation, and helps organizations achieve supply chain optimization, customer targeting, and
sustainable competitive advantages. innovation, maintaining market leadership and
profitability.
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ASPECT OF ROLE OF ANALYTICS TYPE OF RELATIONSHIP
STRATEGIC
MANAGEMENT
Goal Setting Analytics helps in identifying and quantifying Directive: Analytics informs what goals are
business goals based on past performance and realistic and achievable.
future projections.
Situational Analysis Analytics provides comprehensive insights into Informative: Analytics offers a factual basis
the internal and external environment of a for understanding the current state.
business.
Strategy Data-driven insights guide the development of Foundational: Analytics acts as the evidence
Formulation strategies to achieve business objectives. for strategic choices.
Strategy Analytics monitors progress and measures the Operational: Analytics provides continuous
Implementation effectiveness of strategies being implemented. feedback on strategy execution.
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ASPECT OF ROLE OF ANALYTICS TYPE OF RELATIONSHIP
STRATEGIC
MANAGEMENT
Decision Making Analytics improves the quality of decisions with Supportive: Analytics supports decision-
predictive models and risk assessment. makers with quantitative backing.

Innovation Analytics can identify trends and patterns that suggest Inspiring: Analytics triggers creative
opportunities for new products or markets. strategic thinking.

Risk Management Predictive analytics helps to forecast potential risks and Protective: Analytics identifies and
develop mitigation strategies. quantifies risks for strategic planning.

Performance Analytics tools measure key performance indicators to Evaluative: Analytics assesses if
Management assess the success of strategic initiatives. strategic actions lead to desired
outcomes.
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Conclusion and Key Takeaways
• Strategy analytics is essential for informed decision-making.
• Combining strategic management with data analytics enhances
competitive advantage.
• Utilizing frameworks such as SWOT, PESTEL, and Value Chain
Analysis helps in better strategy formulation.
• Organizations must integrate analytics into their strategy to
remain competitive.
• Practical applications in tools like Tableau, Power BI, and Python
improve decision accuracy.
• Continuous monitoring and adaptation are crucial for long-term
success.
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End of Lecture
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BDA511 64
Kwame Nkrumah University of
Science & Technology, Kumasi, Ghana

BUSINESS ANALYTICS STRATEGY

BDA 511
Dr. Matilda Kokui Owusu-Bio
Supply Chain & Information Systems Department
School of Business
CoHSS
[email protected]
1
DYNAMIC MANAGERIAL
CAPABILITIES

UNIT 2

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UNIT OBJECTIVE
• To explain Dynamic Managerial
Capabilities
• To understand the 3 dimensions of
Dynamic Managerial Capabilities
• To explain the impact of Analytics on
Dynamic Managerial Capabilities
• Big Data Analytics Capability
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INTRODUCTION DYNAMIC MANAGERIAL CAPABILITIES
▪In today's fast-paced digital economy, businesses
continuously face disruptions driven by big data, analytics,
and global complexity.
▪To navigate this landscape successfully, firms require
Dynamic Managerial Capabilities (DMCs) that is, the ability
of managers to effectively sense, adapt, and respond to
rapid changes in the market environment.
▪Dynamic managerial capabilities, therefore, empower
managers to refresh and reshape their company's resources
effectively, sustaining competitive advantages even amidst
complex challenges and market turbulence.
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DYNAMIC MANAGERIAL CAPABILITIES
In today's business world, managers face complex,
unstructured problems that don't have obvious solutions.
These problems often involve:
• Large amounts of data coming in quickly
• Information in different formats (numbers, text, images)
• Constantly changing business conditions
Managers need to therefore learn how to apply a combination
of strategy concepts and analytical methods (quantitative and
qualitative) to address unstructured complex strategic
problems.
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Strategic Problem Quantitative Analysis Qualitative Analysis Combination Application
Market Entry Analyzing market data to Conducting interviews with industry Combining market data with expert
determine the size, growth rate, experts to gather insights on market insights to formulate a data-driven yet
and profitability potential. trends and customer preferences. contextually informed market entry
strategy.
Product Development Using customer usage data to Hosting focus groups to understand Integrating usage statistics with
identify features that are most and the user experience and how the qualitative feedback to prioritize feature
least used. product fits into customers' lives. development that aligns with both data
trends and user needs.

Risk Management Running simulations to forecast Facilitating workshops to discuss Merging quantitative risk forecasts with
potential risks under different potential risks with stakeholders stakeholder insights to develop a
scenarios. and gather diverse perspectives. comprehensive risk mitigation plan.
Organizational Change Surveying employees to quantify Conducting in-depth interviews to Utilizing survey data and interview
morale and engagement levels understand employee sentiments narratives to design change
before and after changes. and resistance points. management strategies that are
sensitive to employee concerns and
statistically grounded.

Customer Applying machine learning Ethnographic studies to understand Using algorithmic segmentation as a
Segmentation algorithms to transaction data to the cultural and social factors base and refining it with cultural insights
identify customer segments. influencing customer behaviors. to create a robust customer
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segmentation model. 7
DYNAMIC MANAGERIAL CAPABILITIES
Dynamic Managerial Capabilities refers to the ability of managers to
adapt, reconfigure, and renew their strategies and resources in
rapidly changing environments.
▪ "Dynamic" refers to how organizations must continuously update
their competencies through ongoing processes of change. This
renewal is essential to stay relevant in an ever-evolving business
landscape.
▪ "Capabilities" emphasizes that a leadership team's specific
abilities are crucial. These include the senior management's capacity
to make strategic decisions that effectively adapt, integrate, and
reconfigure organizational competencies as needed.
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DYNAMIC MANAGERIAL CAPABILITIES

A dynamic capability is the firm’s potential to

systematically solve problems, formed by its
propensity to sense opportunities and threats,
to make timely and market-oriented decisions,
and to change its resource base.

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COMPONENTS OF DMC
There are 3 components of DMC;
1.Learning orientation: This refers to the willingness of a
firm's managers to acquire new knowledge and skills, as well
as their ability to use that knowledge to create new
processes, products, and services.
2.Strategic flexibility: This refers to a firm's ability to quickly
adjust its strategy and resource allocation in response to
changes in the business environment. This includes being
able to recognize and act on emerging opportunities, as well
as being able to withdraw from unprofitable or
unsustainable activities.
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COMPONENTS OF DMC
3. Resource redeployment: This refers to a firm's ability to
reconfigure its existing resources and capabilities in order
to create new sources of competitive advantage. This
includes reallocating resources to new products or
markets, as well as developing new capabilities through
training and development.
By developing a learning orientation, strategic flexibility, and
resource redeployment capabilities, firms can maintain their
competitive advantage and achieve long-term success.

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Component Example
Learning Orientation A technology company, ABC Tech, encourages its managers to participate in regular training
sessions on emerging technologies. As a result, they develop a groundbreaking cloud
computing process that revolutionizes their service offerings, leading to the creation of a
new suite of products that cater to a previously unmet market need.
Strategic Flexibility XYZ Retail, a large retail chain, notices a shift in consumer behavior toward online shopping.
The company swiftly reallocates its investments from physical store expansions to the
development of an e-commerce platform and logistics for online delivery. This quick shift
allows XYZ Retail to capitalize on the changing market and maintain its market position
despite the decline in in-store shopping.
Resource Redeployment DEF Pharmaceuticals has a strong research and development team focused on creating new
drugs. When several promising drug lines fail to gain FDA approval, the company reallocates
its research resources to support the development of medical devices, leveraging its
scientific expertise in a new but related field. This move enables DEF to diversify its product
offerings and open up new revenue streams.
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DIMENSIONS OF DMC

DMC ensures an integrated method using resource

management and scenarios to evaluate and
configure resources to the requirements of the
external environment using familiar practices from
experiences.

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DIMENSIONS OF DMC
There are three dimensions of DMC which involve
the identifications of the:
• Task (activities),
• Cognitive (interpretation) and
• Behavior (decisions).

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1.TASK DIMENSION
It involves Asset orchestration which refers to;
▪Resource management which is the comprehensive
process of arranging the firm’s resource portfolio to
build capabilities and leveraging the capabilities with
the objective of creating and maintaining value for
customers.
▪The search for resources and capabilities, selection,
investment, deployment and, when necessary, their
reconfiguration.
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1. TASK DIMENSION
It comprises Structuring, Bundling and Leverage
i. Structuring involves the management of the
resource portfolio by:
▪Acquiring resources from markets
▪Accumulating resources by developing internally
▪Divesting resources through eliminating/selling

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1.TASK DIMENSIONS
ii. Bundling is the process of combining resources to
develop capabilities by;
• Stabilizing capabilities by minor incremental
improvements
• Enriching capabilities to extend their use or
withstand changes
• Pioneering new capabilities to face competitive
issues

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1. TASK DIMENSIONS
iii. Leveraging is the creation of value with capabilities/
competences. That is:
• Mobilizing capabilities in configurations which are
suitable for exploiting market opportunities
• Coordinating capabilities to achieve efficient
configurations and deploying the capability
configuration in a specific strategy.

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2. COGNITIVE DIMENSIONS
▪Cognition of managers and the interpretive processes
in which they engage are deemed key aspects of their
capabilities.
▪Managers may perceive problems objectively. These
problems have to be discovered or generated through
their actions.
▪Decisions about resource allocation are shaped by how
organizations channel managers’ attention and
reactions.
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2. COGNITIVE DIMENSIONS
1. Interpretive processes
• Interpretations of the environment defines how
organizations respond to it.
2. Purposeful configuration
• Perceptions of shortcomings or strategic opportunities to
conceptualize useful configurations of resources.
3. Learning and reasoning
• Iterative process of trials and reflection by management
• Problem sensing: analogical reasoning
• Mental models
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3. BEHAVIOUR DIMENSIONS
• Behaviourally, managers generally search for solutions
that are “good enough” to achieve their goals that are
determined by the best judgment about the desired
amount of a resource given the strategy’s
requirements.
• Managers must draw conclusions and make
commitments based on insufficient, unclear, or
conflicting information about the results obtained from
their investments and causal ambiguity.
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3. BEHAVIOUR DIMENSIONS
• Causal ambiguity is a concept that describes the
degree to which decision makers/managers
understand the relationships between
resource‐building actions and firm performance.
• Managers selectively pay attention to the information
that falls within their specialty or interest giving them
confidence in their decisions and acting quickly.

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3. BEHAVIOUR DIMENSIONS
1. Satisficing behavior
• Reach conclusions and make commitments based
on insufficient, unclear, or conflicting information.
• Goal-seeking information feedback
2. Bounded rationality:
• Rationality is bounded because there are limits to
our thinking capacity, available information, and
time.
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3. BEHAVIOUR DIMENSIONS

3. Problemistic search
• Only look for information if there is a problem
• Use heuristics (practical methods)
• Affected by context

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BREAKOUT ROOM EXERCISE

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MANAGERS AS MODELERS
• Typically, managers focus on immediate strategic events such as
responding to threats, seizing growth opportunities, or pursuing
diversification. However, they rarely look closely at underlying
patterns that drive these events.
• Adopting a modeling perspective helps managers identify and
understand these underlying patterns clearly.
• By using models, managers can structure their thinking, reduce
confusion, clarify complex situations, and rigorously test their
assumptions before making critical strategic decisions.

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MANAGERS AS MODELERS
• Models are structured approaches or tools managers use to
support better decision-making, especially when decisions must
be made under uncertainty or limited information.
• When managers use models, they simplify complex real-world
problems into understandable parts. This helps them find
meaningful patterns and logical structures within strategic issues.
• A model exists in the analytical dimension and help managers
clearly visualize problems, understand what data they need, and
identify practical solutions.
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PRINCIPLES OF MODELLING

1. Model simple - think complicated

2. Be parsimonious, start small and add
realism as necessary
3. Divide and conquer, avoid mega models
4. Use metaphors, analogies and similarities
5. Do not fall in love with data
6. Model building may feel like muddling
through
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PRINCIPLES OF MODELLING

1. MODEL SIMPLE, THINK COMPLICATED

▪A simple model is easier to understand because
models are built to help people become more
effective in what they do.
▪A simple model is easier to manipulate so it is simpler
to produce results that seem relevant.
▪Note: Models are “tools for thinking” not “tools to
replace thinking” therefore they extend the power of
thinking and support complicated analysis.
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PRINCIPLES OF MODELLING

2. BE PARSIMONIOUS, START SMALL AND ADD REALISM

AS NECESSARY
▪Models should be developed progressively, starting with
simple assumptions and only adding complications as
when needed.
▪The intention is to learn from the simple model and then
refine it gradually by adding more realism until it is valid
for the purpose of the model.

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PRINCIPLES OF MODELLING
3. DIVIDE AND CONQUER, AVOID MEGA MODELS
▪This relates to the need to build a model from the
components of the problem, where each of them
needs to be developed with restraints, rather than
attempting to develop an all‐inclusive model from the
beginning.

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PRINCIPLES OF MODELLING
4. USE METAPHORS, ANALOGIES AND SIMILARITIES
▪This principle encourages managers and modelers to
simplify complex problems by relating them to familiar
situations, previous experiences, or established models.
▪Rather than creating entirely new models from scratch,
managers look for similarities to existing models or
systems that have already proven successful.
▪However, the risk is choosing the wrong analogy.

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PRINCIPLES OF MODELLING
5. DO NOT FALL IN LOVE WITH DATA
▪ While the availability of data is increasing rapidly, and its
analysis is important, the modeler should not consider that
examining the data will reveal all the insights to construct a
model.
▪ Note, exploration of data can never replace careful thought
and analysis emphasising that Modelling drives data
collection not the other way round.
▪ The best approach would be to develop a simple model,
collect the data to parametrize, and then test its behaviour.
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PRINCIPLES OF MODELLING
6. MODEL BUILDING MAY FEEL LIKE “MUDDLING THROUGH”
▪ Modeling is rarely a linear process, it involves experimentation,
backtracking, and refinement as understanding evolves.
▪ The model building process is not solely rational, but it implies
muddling through by using insights and gaining an understanding
of the problem
▪ Managers need to be flexible and open-minded, using their
insights and practical experience to gradually understand and
clarify the issue. They then build, test, refine, and adjust their
models repeatedly until arriving at a useful and accurate solution.

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MODELLING SYSTEMS
• Organizations are systems comprised of multiple
interdependent elements.
• Modelling systems refers to the process of creating and using
mathematical or computational models to simulate and
analyze complex systems such as organizations.
• The purpose of modelling systems is to gain insights into how
these systems behave and how they can be improved or
optimized.
• Therefore, it is important to recognize the meaning of system
and how it affects the models.
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MODELLING SYSTEMS
Five characteristics of systems modelling:
1. Systems are measured in terms of efficiency and
effectiveness
Efficiency looks at how well resources are used in a given
activity.
Effectiveness means the level of achievement of goals or
objectives.

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MODELLING SYSTEMS
2.Recognize the differences between Reductionist and Cause-and-
effect thinking:
▪ Reductionism is the certainty that systems and every experience of
them can be reduced, partitioned, or disassembled into simple
indivisible parts.
▪ The explanation of the behaviour of the individual parts can be
aggregated to understand and explain the behaviour of the system as
a whole.
▪ Cause‐and‐effect thinking however involves explaining everything by
decomposing it into parts while looking for cause‐and‐effect
relationships between the parts. Causal relationships may be of
diverse forms.
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MODELLING SYSTEMS
3. What to include or exclude in a definition of a
system largely depends on what the person
viewing the system intends to do with this
definition:
▪ The system become a mental construct, personal to the observer
and therefore can be seen as human conceptualizations.
▪ The view of a system is affected by different factors: formation,
cultural and social background, education, practical experience,
and personal values or beliefs.

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MODELLING SYSTEMS
4. Selection of the boundary is the most critical
aspect of systems modelling:
▪ Boundary choice determines not only the nature of the
system but also who will benefit from the desirable outputs
and who will suffer undesirable consequences.

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MODELLING SYSTEMS
5. System is part of a larger system, its
environment, and this larger system is part of an
even larger system, indicating the hierarchy of
systems.
▪ The nesting of systems within systems is referred to as the
hierarchy of systems. In most cases, the larger containing system
exerts some control over the contained system.
▪ One of the advantages of viewing two systems in a hierarchy is
understanding their relationships and how the performance of the
narrower system is hampered or constrained by aspects of the
wider system.
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TYPES OF SYSTEMS
There are 6 types of systems:
1. Discrete,
2. Continuous,
3. Deterministic,
4. Stochastic,
5. Closed and
6. Open.
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TYPES OF SYSTEMS
Type of System Explanation Relation to Data Analytics Relation to Systems Modeling Example
Discrete Systems where changes Data analytics can be used to Discrete-event simulation models Customer transactions in a
occur at specific discrete analyze patterns and trends at these the operation of a system as a retail shop; each purchase is
points in time. discrete points, like time-series discrete sequence of events. a discrete event.
analysis.
Continuous Systems that change in a Continuous data can be analyzed In continuous system modeling, The speed of a car as it
continuous manner over through regression analysis or time differential equations are used to travels; speed changes
time. series forecasting. represent the changing state of continuously with time.
the system over time.
Deterministic Systems where outcomes Data analytics focuses on finding Deterministic models assume a Assembly line production;
are precisely determined and understanding the exact perfect knowledge of given inputs and process
through known relationships between variables. relationships and inputs in the times are known and fixed.
relationships without system.
randomness.
Stochastic Systems that incorporate Stochastic modeling in data Stochastic models use random Stock market prices; they
randomness and analytics involves probability variables and probability can fluctuate unpredictably
unpredictability. distributions to predict different distributions to account for within certain probabilities.
outcomes. uncertainty.
Closed Systems where no matter Data analytics in closed systems Closed system models are self- A sealed terrarium, where
or information leaves or may concentrate on optimizing contained with no interaction all water and air are recycled
enters the system. internal processes due to the lack of with the environment. internally.
external data.
Open Systems that have external Data analytics often requires Open system models include A restaurant that interacts
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with its environment by
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in or out. environment. BDA511 serving customers.42
BIG DATA ANALYTICS CAPABILITY
▪Big data and big data analytics (BDA) hold the power to
revolutionize traditional ways of doing business since
decision-making in organizations has become increasingly
reliant on Big Data.
▪Analytical applications have increased in importance for
evidence-based decision making.
▪Big data involves a set of challenges related to data
(characteristics in terms of volume, variety, velocity, veracity,
volatility, and quality), process (how techniques capture,
integrate and transform data to feed the right model), and
management (governance and ethical).`

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BIG DATA ANALYTICS CAPABILITY
Conceptualizing big data analytics as a capability implies
simultaneously:
▪ Steering specific activities such as data acquisition.
▪ Managing statistical tools.
▪ Employing systematic reasoning.
▪ Working effectively with models that are descriptive/explanatory,
predictive, or prescriptive.
▪ Ability to deal effectively with evidence in the form of multiple
data such as, databases, click‐streams, documents, sensors, maps.
▪ Understanding business models.
▪ Coordinating the use of different capabilities.
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BIG DATA ANALYTICS CAPABILITY
▪ One of the most important impacts of big data analytics on
dynamic managerial capabilities is Sensemaking.
Sensemaking requires being able to appreciate the complex
features of big data by reducing its ambiguity through a
corresponding set of disciplines and subject areas.
▪ It involves analyzing big data by combining disciplines such as
management, economics, statistics, applied mathematics and
computer science.
▪ Managers therefore need to be aware of how to use
descriptive analytics seamlessly in order to generate and
understand reports.
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End of Lecture

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BDA511 47
Kwame Nkrumah University of
Science & Technology, Kumasi, Ghana

BUSINESS ANALYTICS STRATEGY

BDA 551
Dr. Matilda Kokui OwusuBio
Supply Chain & Information Systems Department
School of Business
CoHSS
[email protected]

1
EXTERNAL ENVIRONMENT:
POLITICAL, ECONOMIC, SOCIETAL,
TECHNOLOGICAL AND ENVIRONMENTAL
FACTORS

UNIT 3
MKOB/BDA511 2
UNIT OBJECTIVE
Upon completing the unit students will be able to:
• Identify and define key external factors that influence business
operations.
• Apply analytical tools and methodologies to predict and assess
changes in the external environment.
• Conduct a comprehensive external environment analysis,
including scanning, monitoring, forecasting, and evaluating
potential impacts.
• Use data-driven insights to inform decision-making in a
dynamic external environment.
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WHY ENVIRONMENTAL FACTORS ARE IMPORTANT?
▪ Strategic choices are a function of conditions of the
internal and external factors.
▪ The external environment refers to all the factors
outside of a business that can impact its operations
and success.
▪ The external environment/external factors, can
affect the organization’s choices and its
performance.
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WHY ENVIRONMENTAL FACTORS ARE IMPORTANT?
▪ Businesses must carefully analyse their external
environment in order to identify potential threats
and opportunities.
▪ By understanding these external factors, a business
can make informed decisions about its operations,
marketing, and growth strategies.
▪ An organization's ability to adapt to the external
environment can be a key factor in its long-term
success.
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WHY ENVIRONMENTAL FACTORS ARE IMPORTANT?

The external environment can be divided into

three parts based on the closeness to the
organization:
• Rivalry with existing organizations
• Industry dynamics defined by the suppliers,
potential entrants, substitutes and customers and
• The general/remote environment defined by
the political, economic, social, technological and
environmental factors.
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EXTERNAL FACTORS AFFECTING THE
ORGANIZATION

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EXTERNAL FACTORS: REMOTE ENVIRONMENT
▪ Political:
▪ These factors examine the political situation since
government regulations and legal issues play a role in its
economy and can ultimately affect the organization.
▪ It is essential for organizations to assess and align
themselves with these policies in order to devise
strategies which will enable them to operate
successfully in the market avoiding government
pressures as an interested stakeholder.

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EXAMPLE: POLITICAL
THE AFRICAN CONTINENTAL FREE TRADE AREA (AfCFTA)
CREATING ONE AFRICAN MARKET
▪ The AfCFTA is one of the flagship projects of Agenda 2063. It is a high
ambition trade agreement based on eliminating barriers to trade in
Africa.
▪ The AfCFTA is the world’s largest free trade area bringing together the
55 countries of the African Union (AU) and eight (8) Regional
Economic Communities (RECs).
▪ The objective of the AfCFTA is to significantly boost intra Africa trade,
particularly trade in value-added production and trade across all
sectors of Africa’s economy.
▪ The overall mandate of the AfCFTA is to create a single continental
market with a population of about 1.3 billion people and a combined
GDP of approximately US$ 3.4 trillion. https://auafcfta.org/
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EXTERNAL FACTORS
▪ Economic:
▪ Elements such as exchange rates, interest rates and
inflation rates affect organization’s raw material and
capital cost, indirectly determining the performance of
the business.
▪ These factors also have an impact on the purchasing
power of the consumers which affects the demand for
products/services and revenues.
▪ Economic factors can be divided into global and
macroeconomic factors.
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EXTERNAL FACTORS
Economic factors can be divided into Global and Macroeconomic
factors.
▪ The global‐economic factors are the external factors which are not
determined by national governments. Examples of such factors can
include globalization and the state of other economies. These are not
controlled forces but have an influence on the whole economy
including consumers, suppliers and competitors. Examples?
▪ Macro‐economic factors are structured and determined by a
country’s government in order to control its economy. These include
taxes and monetary policies, which directly affect businesses,
together with government budget. Examples?

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EXTERNAL FACTORS
▪ Social:
▪ These factors comprise attitudes and
characteristics of the population such as
lifestyle trends, age distribution and
demographics, health consciousness, racial and
ethnic diversity.
▪ These factors help in gaining an understanding
of the consumers’ buying patterns.
▪ Cultural dimensions
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EXTERNAL FACTORS
▪ Technological:
▪ Technological factors refer to the exogenous factors that
can affect the technical dimensions of an organization.
▪ The impact of changes in technological factors can affect
the level of productivity, cost and quality of a product or
service.
▪ Technological factors can limit or enhance innovation,
determine barriers to entry, and eventually impact the
decision making process.

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EXTERNAL FACTORS
▪ Environmental:
▪ Environmental factors include ecological factors
such as climate, weather changes and
geographical events.
▪ They can have important impact on all business
processes and demand.
▪ Organizations are also required to do business
sustainably due to government and society
pressures
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CLOSE ANALYSIS /PESTE ANALYSIS
• The external factors are usually grouped during
the strategic management process using a
framework called PESTE (Political,
Environmental, Social, Technology, Economic)
• The framework helps identify, organize and
qualitatively analyze the external
macro‐environmental factors that are likely to
affect an organization’s present or future
performance.
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PESTE ANALYSIS IN 5 STEPS
Steps Key activities Detail
1. Select the external factors Selection of the sense making The team should involve internal
that are critical to the firm team. (managers) and external (industry experts)
actors.

Identification of factors by the Prepare a workshop with the team and

team. other relevant actors, e.g. board of
directors. Using techniques, such as
brainstorming, identify the most important
perceived external factors.

2. Select sources of significant The team searches for statistical After the trend analysis, try to aggregate
information for each of the information, or/and government variables if they have similar trends and are
external factors or/and research reports that highly related. Evaluate causality: if one
provide information about trends variable depends on the value of another,
on the external factors. you will need to separate them.
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MKOB/BDA511 16
PESTE ANALYSIS IN 5 STEPS
Steps Key activities Detail
3. Evaluate the impact of The team needs to identify the After the trend analysis, try to
the external factors on technique that best adapt to aggregate variables if they have similar
the performance of the the selected factors, available trends and are highly related. Evaluate
organization data, cost, time and skills causality: if one variable depends on
available. the value of another, you will need to
separate them.

4. Categorize the external The team categorizes the There are many techniques to evaluate
factors into impact of the factors in the the impact of external factors from
opportunities or threats future development of industry, quantitative and qualitative methods.
markets and the organization. You may wish to consider significant
impact but low probability events
disregarding major disasters.
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MKOB/BDA511 17
PESTE ANALYSIS IN 5 STEPS
Steps Key activities Detail
5. Include the insights into The team prepares the results If a variable has a positive impact, e.g.
the strategic of the analysis for consideration social changes can expand the size of
management process in current and future strategies. the market, then you will consider it as
an opportunity for the firm. If a variable
implies a negative impact, e.g. interest
rates may decrease the availability of
funding, then you should consider it a
threat (to the organization).

The result of the process may help the

organization to reformulate its mission,
identify requirements in terms of
internal factors, and to design
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strategies for achieving its goals and
MKOB/BDA511 18
objectives aligned with the external
STRATEGIC ANALYTICS & PESTE
ANALYSIS
• In the context of PESTE analysis, strategic analytics
can help businesses understand the impact of
external factors on their performance, identify
trends, and make more informed decisions.
• By integrating strategic analytics with PESTE
analysis, businesses can gain deeper insights into
the external factors that influence their
performance, identify trends, and make data driven
decisions.
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MKOB/BDA511 19
STRATEGIC ANALYTICS & PESTE
ANALYSIS
• This approach can help organizations better adapt
to their environment, seize opportunities, and
mitigate risks, ultimately leading to more effective
strategies and improved performance.
• Here are some ways strategic analytics can be
applied to each aspect of PESTE analysis:

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MKOB/BDA511 20
DATA SOURCES FOR PESTE ANALYSIS
1. Political factors: 1. Political: Example
∙ Analyze historical data to identify ∙ Number of new regulations
patterns in political stability, policy introduced by the
changes, or regulatory shifts. government in the past year
∙ Monitor political news and events ∙ Percentage of the population
to predict potential changes in that voted in the last election
government policies or regulations.
∙ Amount of money spent on
∙ Model the potential impact of lobbying efforts by the
political changes on business company
performance to inform
decisionmaking and risk www.knust.edu.gh

management.
www.knust.edu.gh

MKOB/BDA511 21
DATA SOURCES FOR PESTE ANALYSIS
2.Economic factors: 2.Economic: Example
Use economic indicators to forecast
∙
∙ Gross Domestic Product
market trends and identify potential
growth opportunities. (GDP) growth rate for
∙ Analyze the impact of economic factors the past five years
such as interest rates, inflation, or ∙ Unemployment rate in
exchange rates on business the country
performance.
∙ Model different economic scenarios to ∙ Inflation rate for the past
understand their potential effects on the year
organization and guide strategic
planning. www.knust.edu.gh
www.knust.edu.gh

MKOB/BDA511 22
DATA SOURCES FOR PESTE ANALYSIS
3.Social factors: 3.Social: Example
∙ Analyze demographic data to ∙ Average age of the population
understand market segments and in the country
consumer preferences. ∙ Percentage of the population
∙ Monitor cultural trends and social that identifies as urban versus
media to identify emerging rural
consumer behaviors or preferences. ∙ Number of people who speak
∙ Use predictive analytics to forecast a language other than the
changes in consumer preferences official language of the
and inform product development country
or marketing strategies. www.knust.edu.gh
www.knust.edu.gh

MKOB/BDA511 23
DATA SOURCES FOR PESTE ANALYSIS
4.Technological factors: 4.Technological: Example
∙ Monitor technological ∙ Number of patents filed by
advancements and trends to identify the company in the past year
opportunities for innovation or
Percentage of the population
improvement.
∙

that owns a smartphone

∙ Assess the potential impact of new
Number of Internet of Things
technologies on the organization's
∙

(IoT) devices sold in the

operations or competitive position.
country
∙ Use predictive analytics to forecast
the rate of technological change and
its potential effects on the business. www.knust.edu.gh
www.knust.edu.gh

MKOB/BDA511 24
DATA SOURCES FOR PESTE ANALYSIS
5. Environmental factors:
5.Environmental: Example
∙ Analyze historical data on natural disasters,
climate change, or resource availability to ∙ Carbon footprint of the
identify patterns and potential risks. company in the past year
∙ Monitor news and research on ∙ Number of endangered
environmental issues to stay informed species in the region
about emerging concerns or regulatory
Amount of plastic waste
changes.
∙

produced by the company in

∙ Model the potential impact of
environmental factors on business
the past year
operations, supply chains, and consumer
preferences to inform decisionmaking and
risk management. www.knust.edu.gh
www.knust.edu.gh

MKOB/BDA511 25
METHODS TO EVALUATE THE IMPACT OF
EXTERNAL FACTORS QUANTITATIVE METHODS
Methods Brief Cost and effort Recognition Level of skills required Type of
Description uncertainty

Econometric They are High since it High due to This tool is basically Predictable
models
simultaneou requires large the employed by economists to future
s sets of economic importance of forecast future developments
multiple databases and economic in the economy based on past
regression specific software. theory in the relationships among
equations. management economic variables such as
of public consumer spending,
policies. household income, tax rates,
interest rates, and
employment. Consequently it
requires knowledge of
economic theory. www.knust.edu.gh
www.knust.edu.gh

MKOB/BDA511 26
METHODS TO EVALUATE THE IMPACT OF
EXTERNAL FACTORS QUANTITATIVE METHODS
Methods Brief Description Cost and effort Recognition Level of skills required Type of
uncertainty

Simple and They explain High/Medium High due to A basic regression analysis Predictable
multiple the variations as it depends on the can be performed by any and
regression in dependent the set of data availability of university graduate with alternative
models
variables due and the software and training in quantitative futures
to the impact software to be the methods, e.g. statistics.
of one or more employed. Basic widespread More sophisticated
independent regressions can existing regression analyses require
variables. be performed knowledge specific training.
using widely about them.
available
spreadsheet
software. www.knust.edu.gh
www.knust.edu.gh

MKOB/BDA511 27
METHODS TO EVALUATE THE IMPACT OF
EXTERNAL FACTORS QUANTITATIVE METHODS
Methods Brief Description Cost and effort Recognition Level of skills required Type of
uncertainty

Trend These models High/Medium as it High due to relatively The level of skills depend on Predictable
analysis assume the depends on the “safe”, and the type of technique to be future
future will set of data and extensively accepted, performed since there are
result from software to be assumption that the numerous techniques, e.g.
the existence employed. This future depends on simple average, exponential
of a long term analysis can also the past. smoothing, logarithmic, with
trend. be performed Additionally, this diverse levels of complexity.
using a widely analysis can also be Additionally, complexity is
available performed using a generated by the
spreadsheet widely available identification of changes that
software. spreadsheet may affect the trends.
software.
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www.knust.edu.gh

MKOB/BDA511 28
METHODS TO EVALUATE THE IMPACT OF
EXTERNAL FACTORS QUALITATIVE METHODS
Methods Brief Description Cost and effort Recognition Level of skills required Type of
uncertainty
Operational These Low since it is High due to The skills required will be Predictable,
and executive estimates basically extensively simple if the number of alternative and a
estimates involve generated by accepted estimates are low, e.g. a range of futures
aggregating the collecting the assumption that simple average. However,
opinions of opinion of people the experience of the complexity may increase
diverse people working in the the people will be if the process involves a
related to the company. able to identify large number of estimates.
external situations where
factors, e.g. historical data is
social factors not available.
may be
identified by
the sales and
marketing www.knust.edu.gh
www.knust.edu.gh

areas. MKOB/BDA511 29
METHODS TO EVALUATE THE IMPACT OF
EXTERNAL FACTORS QUALITATIVE METHODS
Methods Brief Description Cost and effort Recognition Level of skills required Type of uncertainty
Customer They are primary High since the High as every The skills required are medium Predictable,
surveys / data collection design, testing of business needs to since it requires knowledge alternative and a
Market methods involving the accuracy of the be informed about about questionnaire design, range of futures
research
the design of process, and data changes in social statistical sampling and
questionnaires, collection is a long and technological analysis even if the research is
definition of the and costly process factors affecting its performed externally.
sample and further if it is done market.
statistical analysis internally. The cost
with the objective may decline if it is
to learn the performed by an
intentions of either external agency.
current or future
customers

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www.knust.edu.gh

MKOB/BDA511 30
METHODS TO EVALUATE THE IMPACT OF
EXTERNAL FACTORS QUALITATIVE METHODS
Methods Brief Description Cost and effort Recognition Level of skills required Type of
uncertainty
Scenario It is a Low/medium as Medium as it is There are simple methods A range of
systematic it depends on based in to develop scenarios. futures
method for the number of qualitative However, the difficulty is in
thinking about people involved perceptions the acceptance of issues
the future in a in the process without that may go beyond the
consistent and from only either quantitative data tenure of most managers as
plausible the top and, in many well as developing a
manner. management cases, surprising process that is objective
team or large results for and replicable.
groups of managers
stakeholders. responsible for
short to medium
term decisions.
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MKOB/BDA511 31
ACHIEVING CONSISTENCY IN PESTE ANALYSIS
USING POWER BI
▪ Power BI is known for its ease of use, Dragan drop
functionality, and extensive customization
options. It supports a wide range of data sources,
including relational databases, cloud based
storage services, and even real-time data streams.
▪ By using Power BI, organizations can make data
driven decisions, identify trends and patterns, and
gain valuable insights to improve their overall
performance.
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www.knust.edu.gh

MKOB/BDA511 32
PESTE ANALYSIS USING SCENARIOS
The PESTE analysis model supports strategic management
by identifying the external factors that present opportunities
or threats, based on the remote or macroenvironment of
the business. Identify any business within the indicated
sector:
1. An Airline
2. A University College
3. A Water packaging Industry
4. A Hotel facility
5. A Financial institution

1. A Telco
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2. A Notable eatery
MKOB/BDA511 33
METHODS TO EVALUATE THE IMPACT OF
EXTERNAL FACTORS QUALITATIVE METHODS
Methods Brief Description Cost and effort Recognition Level of skills required Type of
uncertainty
Delphi This method Low/Medium Medium given The only related skill is A range of
Method consists in the since it depends the complexity of learning the method and futures and true
development on the number of the method in applying systematically as ambiguity
of a consensus people involved terms of access well as identifying and
across a set of and how to experts, accessing the experts. It is
experts about accessible they questionnaire mostly employed in social,
the future. are. design and political and technological
process. factors.

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www.knust.edu.gh

MKOB/BDA511 34
www.knust.edu.gh
www.knust.edu.gh

MKOB/BDA511 35
End of Lecture

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MKOB/BDA511 36
BUSINESS ANALYTICS
STRATEGY
BDA 551
Dr. Matilda Kokui Owusu-Bio
Supply Chain & Information Systems Department
School of Business
CoHSS
[email protected]
BDA511 1
Kwame Nkrumah University of
Science & Technology, Kumasi, Ghana

INDUSTRY
DYNAMICS
UNIT 4

2
UNIT OBJECTIVE

• Define the structure and key elements of industry

dynamics.
• Analyze the impact of Porter’s Five Forces on
industry behavior and competitiveness.
• Identify and apply analytical tools to manage
business actors and market forces.
• Understand the concept of industry evolution and
its implications for business strategy
BDA511 3
WHAT IS INDUSTRY DYNAMICS?
• Industry dynamics refer to the patterns of change,
growth, competition, and evolution within a specific
industry or market.
• These dynamics are shaped by a variety of factors,
such as technological advancements, consumer
preferences, regulatory changes, and competitive
forces.
• Understanding industry dynamics is essential for
businesses and investors, as it helps them make
informed decisions, adapt to change, and stay
competitive.
BDA511 4
Examples
• Telecommunications: The telecommunications industry
has evolved from landline telephones to mobile phones,
smartphones, and now, 5G technology. The industry has
experienced rapid growth and convergence, with traditional
telecom companies expanding into broadband internet, video
streaming, and other digital services.

• Media and Entertainment: This industry has evolved

dramatically with the advent of digital technologies, leading to
the decline of print media, the rise of online news, and the
emergence of streaming services like Netflix and Spotify,
which have disrupted traditional television and radio business
models.
BDA511 5
Examples

• Financial Services: The rise of fintech and digital

technologies has transformed the financial services
industry, with the emergence of mobile banking, digital
wallets, online lending platforms.

• Healthcare: Technological advancements in medical

research, diagnostics, and treatment have led to
significant changes in the healthcare industry. The rise of
telemedicine, personalized medicine, and wearable health
devices has transformed the way healthcare is delivered
and managed.
BDA511 6
WHAT IS INDUSTRY DYNAMICS?

• Forces determining the structure of the industries

are responsible for the profitability and
attractiveness of an industry. The dynamic analysis
brings into consideration strategic actions.

• Dynamic managerial capabilities are necessary to

anticipate and influence other actors in the industry
(competitors, buyers, suppliers, new entrants, and
substitutes) in order to generate opportunities and
reduce threats.
BDA511 7
Industrial dynamics encompasses the study of the different
variables characterizing industries such as:
Variable Explanation Example
Entry/exit Refers to companies entering or leaving an Uber’s entry into the Ghanaian
industry, influencing competition levels and transportation market, affecting local taxi
market stability. businesses.
Penetration Rate The extent to which a product or service is High penetration of mobile money
adopted or used within a market. services like MTN MoMo in Ghana.
Innovation Rate Frequency and impact of new innovations Rapid innovation in smartphone
introduced in an industry, impacting technologies by Samsung and Apple to
competition and market position. attract consumer attention.
R&D Expenses Investments made by companies into Pharmaceutical companies investing in
research and development to foster vaccine research, significantly increased
innovation and remain competitive. during COVID-19.
Number of Patents Indicates industry innovation, competitive Samsung and Apple filing numerous
advantage, and technological leadership patents annually, securing technological
through proprietary technologies. advancements in smartphone markets.
BDA511 8
Variable Explanation Example
Market Structure Refers to the market's competitive Ghana’s telecom market initially
landscape, such as monopoly, oligopoly, or dominated by MTN and Telecel creating
perfect competition. barriers for new telecom entrants.
Technological Innovations that alter the way products or Adoption of mobile payment
Changes services are produced, consumed, or technologies (MoMo) altering Ghana’s
delivered, affecting industry growth. financial services landscape.
Consumer Shifts in consumer preferences and Increased consumer preference for
Behaviour purchasing patterns that affect demand online shopping in Ghana, reshaping
and industry strategy. retail industry dynamics.
Globalization The integration and interaction among Presence of international retail chains
global markets, influencing competitive (Shoprite) impacting local grocery stores
pressures and market reach. in Ghana.
Regulatory Rules and policies governing an industry Regulatory shifts in Ghana’s mining
Environment that shape its growth, competition, and industry, such as stricter environmental
operational practices. laws affecting mining practices and
investment decisions.
BDA511 9
COMPONENTS FOR DEFINING AN
INDUSTRY

•Boundaries

•Structure

•Competitors

BDA511 10
COMPONENTS FOR DEFINING AN INDUSTRY

1.Boundaries
▪It refers to the lines that separate one
industry from another, defining the scope
and limits of each industry and defines the
set of firms offering products/services that
customers perceive to be substitutable for
one another.

BDA511 11
COMPONENTS FOR DEFINING AN INDUSTRY
Some issues affecting the definition of industry
boundaries are:
▪ Product or service similarity: Companies
that produce similar products or services, catering
to similar customer needs, are usually grouped
within the same industry.
▪Target markets and customers: Companies
that cater to the same target market or customer
segment are often classified within the same
industry.
BDA511 12
COMPONENTS FOR DEFINING AN INDUSTRY
It is essential to note that industry boundaries can be
blurry and may change over time due to factors such as
• Technological advancements,
• Market shifts, and
• Evolving consumer preferences.
For example, the rise of e-commerce has blurred the
boundaries between traditional retail and online retail
industries.
Businesses and investors must therefore continually
reassess industry boundaries to ensure accurate
classification and understanding of market dynamics.
BDA511 13
COMPONENTS FOR DEFINING AN INDUSTRY
2.Structure
A set of attributes that provide a distinctive character and
generate the requirements for success:
• Market Concentration – The dominance of a few firms within
the industry.
• Economies of Scale – The cost advantages that businesses
gain as production increases.
• Product Differentiation – The extent to which consumers
perceive differences between competing products.
• Barriers to Entry – The challenges that new firms face when
entering the industry (e.g., capital requirements, regulations).
BDA511 14
COMPONENTS FOR DEFINING AN INDUSTRY
3.Competitors
▪Competitors are businesses that operate in the same
industry and target the same customer base. They
compete for market share, customer loyalty, and
profitability, and their strategies can significantly
impact each other.
▪Competitors in an industry can be categorized into 3
different types:
1.Direct competitors
2.Indirect competitors
3.Substitute competitors
BDA511 15
Type of Competitor Explanation Example
Direct Competitors Businesses offering similar Samsung and Apple compete
products/services to the same directly in the smartphone
target customers within the market with similar products
same industry. (Galaxy vs. iPhone).

Indirect Competitors Businesses offering different A cinema (movie theater)

products/services that satisfy competes indirectly with
the same need but in a Netflix, as both provide
different way. entertainment but in different
formats.
Substitute Competitors Businesses offering alternative Ride-hailing services (Uber,
solutions that can replace the Bolt) are substitutes for car
need for a product/service ownership or public
altogether. transportation.
BDA511 16
COMPONENTS FOR DEFINING AN INDUSTRY
• Competitors
▪Issues affecting the identification of competitors
are:
• Current and known competitors,
• Only considering large and not small
competitors,
• Not evaluating International competitors,
• Misreading signals, and
• Focusing on few and tangible signals

BDA511 17
Porters Five forces determine the structure, and the
attractiveness, of an industry:
1. BARGAINING POWER OF SUPPLIERS,
2. BARGAINING POWER OF BUYERS,
3. THREAT OF NEW ENTRANTS,
4. DEGREE OF RIVALRY, AND
5. THREAT OF SUBSTITUTES EMBODY THE
RULES OF COMPETITION.

BDA511 18
PORTER’S FIVE FORCES AND INDUSTRY DYNAMICS

• By examining these forces, businesses and investors

can gain a deeper understanding of the industry
dynamics and the factors driving competition,
growth, and profitability.

• The collective strength of these five competitive

forces determines the ability of companies in an
industry to earn, on average, rates of return on
investment exceeding the cost of capital.

BDA511 19
PORTER’S FIVE FORCES AND INDUSTRY DYNAMICS

• By understanding the strength of each of these

forces, an organization can develop strategic
initiatives which would maximize gain or minimize
losses.

• The five forces determine industry profits because

they influence the prices, costs and required
investment in an industry.

BDA511 20
PORTER’S FIVE FORCES

BDA511 21
BARGAINING POWER OF SUPPLIERS
Dimension Weak Suppliers (Low Power) Strong Suppliers (High Example
Power)
Supplier Many suppliers available, Few suppliers dominate, Intel dominates the supply of
Concentration giving buyers more options. making businesses reliant high-end processors for PCs,
on them. giving it strong power over brands
like Dell and HP.
Differentiation of Standardized inputs that can Highly specialized inputs Apple relies on Samsung for OLED
Inputs be sourced from multiple unique to a few suppliers. displays, making Samsung a
suppliers. strong supplier in this area.

Impact of Inputs on Inputs have little effect on Inputs significantly impact Luxury car brands rely on
Cost/Differentiation product price or uniqueness. product quality, price, and premium leather suppliers to
customer preference. differentiate their interiors,
increasing supplier power.
Switching Costs Easy and inexpensive to High costs or risks involved Automakers using a single
switch suppliers. in changing suppliers. supplier for semiconductors face
high switching costs during
shortages.
Presence of Many alternative materials or No or few substitutes, Lithium suppliers for EV batteries
Substitute Inputs components available. making suppliers have strong power due to limited
BDA511 22
indispensable. substitute materials.
Bargaining Power of Buyers
Weak Buyers Dimension Strong Buyers
Low Bargaining leverage High
Low Buyer volume High
Sparse Buyer information Abundant
Low Buyer concentration vs. industry High
Low Substitutes available High
Unlikely Threat of backward integration Credible
High Switching costs Low
Low Price sensitivity High
Strong Brand identity Weak
High Product differentiation Low
Low Price/total purchases High
High Impact on quality/performance Low
High Buyer profits Low
BDA511 23
Porter’s Five Forces: Substitutes

Limited Dimension Substantial

threats Threats

High Switching costs Low

Low Buyer inclination to substitute High

Low Price performance trade-off of High

substitute

BDA511 24
Porter’s Five Forces: Substitutes
Dimension Limited Threats (Low Substantial Threats (High Example
Impact of Substitutes) Impact of Substitutes)
Switching Costs High – Customers face Low – Customers can easily Apple ecosystem users find it
difficulties in switching to
switch to substitutes. difficult to switch to Android
alternatives. due to integration with other
Apple devices, creating high
switching costs.
Buyer Inclination to Low – Customers prefer the High – Customers are open Streaming services like Netflix
Substitute original product and do not to trying substitutes, replacing cable TV, as
actively seek alternatives. especially if they offer cost or customers are inclined to
convenience benefits. switch for flexibility and lower
costs.
Price-Performance Low – Substitutes are more High – Substitutes provide Electric vehicles (EVs)
Trade-Off of expensive or offer lower similar or better performance becoming a viable substitute
Substitute quality compared to the at a lower price. for gasoline cars due to cost
original product. savings and environmental
benefits.
BDA511 25
PORTER’S FIVE FORCES: THREAT OF NEW ENTRANTS
Weak Threat Dimension Strong Threat
Sustainable Proprietary product differences Low or easily
copied
Difficult Access to distribution Easy
Protection Government policy Deregulation
Substantial Economies of scale Limited
High Capital requirements Low
High Switching costs Low
High Absolute cost advantages Low
High Expected retaliation Low

BDA511 26
INTENSITY OF RIVALRY
Low Rivalry Dimension Intense Rivalry
Low Exit barriers High (difficult to
exit)
Low Industry concentration High
Low Fixed costs High
High Industry growth Low
High Differentiation Low
Infrequent Intermittent overcapacity Frequent
Low Diversity of rivals High

BDA511 27
PORTER’S FIVE FORCES

BDA511 28
PORTER’S FIVE FORCES: SCENARIOS
Examples of how companies might use Porter’s Five Forces:
•Argento, an existing apparel company, is entering the athletic shoes
and clothing market:
• Competitive rivalry: Several large, established companies already occupy the
athletic apparel industry.
• Threat of new entrants: The athletic apparel industry is highly competitive,
and new entrants must have a unique selling proposition to succeed.
• Bargaining power of suppliers: Athletic apparel companies rely on a variety
of suppliers, including textile mills, dye houses, and accessory
manufacturers.
• Bargaining power of buyers: Athletic apparel companies must compete on
price, quality, and style to win customers.
• Threat of substitutes: Athletic apparel companies must compete with other
types of clothing, such as casual wear, as well as with other forms of exercise,
such as yoga and Pilates

BDA511 29
PORTER’S FIVE FORCES: SCENARIOS
•A new entrant in the coffee shop market:
• Competitive rivalry: The coffee shop industry is highly
competitive, with many established players.
• Threat of new entrants: The coffee shop industry is relatively
easy to enter, with low barriers to entry.
• Bargaining power of suppliers: Coffee shops rely on a variety
of suppliers, including coffee growers, roasters, and
equipment manufacturers.
• Bargaining power of buyers: Coffee shops must compete on
price, quality, and service to win customers.
• Threat of substitutes: Coffee shops must compete with other
types of beverage providers, such as tea shops and juice bars1.

BDA511 30
PORTERS FIVE FORCES ANALYSIS OF THE AIRLINE INDUSTRY
FIVE FORCES CONDITION

Buyer power High buyer independence without threat of backward

integration (mainly consumers)
High price sensitivity due to high price/total purchase
(traveling)
Highly discretionary product (traveling is a discretionary
activity)
Low switching costs but fairly differentiated product (similar
product – travel – but differences among providers)
Substitutes Low switching cost
Low price performance trade‐offs (compared with car or
train over long distances)

BDA511 31
PORTERS FIVE FORCES ANALYSIS OF THE AIRLINE INDUSTRY
FIVE FORCES CONDITION
Supplier power Depending on the input for airline operations,
airlines can have high independence (e.g. fuel), large
fairly differentiated suppliers with high switching
costs (e.g. aircraft engines), high importance on
quality/cost (e.g. food), no substitutes and
concentrate (Airbus and Boeing)
Other suppliers, e.g. airports, also have high
switching costs and high importance on quality/cost
and no substitutes (central airports)
Low dispensability and threat of forward integration

BDA511 32
FIVE FORCES PORTERS FIVE FORCESCONDITION
ANALYSIS OF THE AIRLINE INDUSTRY

New entrants Strong market growth

Economies of scale that are important but achievable and high
fixed costs
Suppliers accessible
Low proprietary product differences and low switching cost
Strong brands but accessible distribution
Incumbents that can retaliate strongly
Highly regulated operations but open entry
Rivalry Highly diverse industry with differentiated products (similar
product – travel – but differences among providers) and
competitors of diverse size
Low switching costs
High fixed costs with intermittent overcapacity
Potential zero-sum game in certain markets
Exit barriers relatively high
BDA511 33
BDA511 34
Managing the bargaining power of buyers through
Revenue management in Airlines
Revenue Procedure Strategic Implication
Management
Seat Area
Seat allocation • Compile historical data about buyers’ This exercise detect changes in
behavior (seat demand, class distribution buyers’ behavior which need to
and market fares). be investigated given their level
• Compare with planned capacity utilization of importance as it may have
(flights scheduled, seats available and strategic impact: new entrants,
expected) rivals’ competitive actions,
• Classify the differences in terms of changes in price sensitivity, or
importance (market, regions, and specific simply erroneous assumptions
flights schedules) in key metrics: load about pricing or capacity
factor, composition of the revenue profile allocation.
(type of passengers).
BDA511 35
Managing the bargaining power of buyers through
Revenue management in Airlines
Revenue Procedure Strategic Implication
Management
Seat Area
System • New offerings need to be included in the This activity can inform the
calibration system and calibrated into the system by expected conditions of the new
using historical data from another route market and serve as a platform
with similar competitive environment to learn about the market once
(buyers and rivals behavior) to be able to the offering is launched.
optimize revenues.
• Verify that the historical data fits with the
future patterns of activity in the new
offering (departure times, completely new
route, special events, seasonality
patterns). BDA511 36
MANAGING THE BARGAINING POWER OF BUYERS THROUG
REVENUE MANAGEMENT IN AIRLINES

Revenue Procedure Strategic Implication

Management
Seat Area
Commercial • The system will provide the optimal While the system can only provide
exception configuration of the seat inventory to maximize the best solution to a defined
policies the revenues after using the expected competitive market, managers
information. may want to explore policies to
• Management may decide to override some of achieve goals that exceed
the results in order to adjust to specific policies optimizing the current set of
to achieve strategic goals. resources.
Performance • Recurrent reviews to compare advance with This activity allows the firm to
monitoring historical data or post-flight are performed. react to erroneous expectations or
changes in the market.

BDA511 37
PORTER'S FIVE FORCES ANALYSIS OF UBER
Threat of New Entrants Moderate: Entry is possible with app
development, but scaling is challenging due to
brand loyalty and established market presence.
Bargaining Power of Moderate: Many drivers, but high platform
Suppliers competition gives them alternatives.
Bargaining Power of High: No switching costs, many alternatives,
Buyers high price sensitivity.
Threat of Substitute High: Many alternative forms of transportation
Products are available.
Rivalry Among Existing Intense: Strong competitors in the market
Competitors engage in price and service competition.
BDA511 38
Force Analysis of Samsung Smartphones
Threat of New Low to Moderate: High capital investment and established brand loyalty to
Entrants companies like Samsung act as barriers. However, the rise of companies like
Xiaomi shows that with aggressive pricing and rapid innovation, new entrants
can still capture market share.
Bargaining Power of Moderate: Samsung is unique in that it manufactures many of its own
Suppliers components, giving it control over the supply chain. However, for specialized
components like advanced processors or camera sensors not made by
Samsung, suppliers may have more power.
Bargaining Power of High: Buyers have a multitude of choices and can easily compare products
Buyers online, increasing their bargaining power. Brand switching is common, and
consumer loyalty is heavily influenced by innovation and price.
Threat of Substitute Moderate: While smartphones are a part of daily life, substitutes like feature
Products phones still exist in certain markets. Additionally, other smart devices
(tablets, PCs, wearables) can overlap in functionality and serve as
substitutes to some extent.
Rivalry Among High: Samsung faces stiff competition from Apple, Huawei, and a range of
Existing Competitors other Android manufacturers. The market is dynamic, with constant product
launches and aggressive marketing strategies. Price wars, especially in mid-
BDA511 39
range and budget categories, are common.
EVALUATING COMPETITORS’ PERFORMANCE IN
THE MARKET USING TEXT MINING
1. Identification of social media targets: Eg Facebook, Instagram,
LinkedIn and X, etc.
2. Extraction of posts in social media targets into a file for analysis, e.g.
Excel.
3. Data cleaning, e.g. elimination of posts not useful, and formatting, e.g.
integrating into one format for use by the mining techniques.
4. Use of text mining software to explore and extract key concepts,
generate categories and gain insights. Then query search on the data
to identify patterns, linkages and information based on hypothesis.
5. The social media data can be presented as tweets, comments to
posts, shares and likes.

BDA511 40
EVALUATING COMPETITORS’ PERFORMANCE
IN THE MARKET USING TEXT MINING
6. Some of the data can be quantitative such as number of
followers, postings, comments, likes, frequency of posting
and response time.
7. In terms of means of engagement,
questions/post/statements generated the highest response
from social media are noted.
8. Text mining is employed initially to identify emerging
themes so combining all data from the competitors offered a
broad overview of the main discussions among buyers

BDA511 41
EXAMPLE OF DATA MINING

• Grocery stores are well-known users of data mining techniques.

Many supermarkets offer free loyalty cards to customers that give
them access to reduced prices not available to non-members.
• The cards make it easy for stores to track who is buying what,
when they are buying it, and at what price.
• After analyzing the data, stores can then use this data
to offer customers coupons targeted to their buying habits and
decide when to put items on sale or when to sell them at full price.
• Data mining can be a cause for concern when a company uses
only selected information, which is not representative of the
overall sample group, to prove a certain hypothesis.

BDA511 42
INDUSTRY EVOLUTION

BDA511 43
INDUSTRY EVOLUTION

• Industry evolution refers to the gradual changes and

transformations that occur within an industry over time due
to factors such as technological advancements, shifting
consumer preferences, competition, and regulatory changes.
• Industry evolution refers to the long-term patterns of
change and development that industries undergo over time,
• It describes how industries emerge, grow, mature, and
sometimes decline or transform into new industries.

BDA511 44
INDUSTRY EVOLUTION

• The industry life cycle refers to the evolution of an

industry or business through four stages based on the
business characteristics.
• The industry life cycle refers to the progression of an
industry over time through several stages
characterized by different business dynamics, market
conditions, and levels of competition:
• They are the Introduction, Growth, Maturity, and
Decline stages.

BDA511 45
INDUSTRY LIFE CYCLE AND THE NUMBER
OF COMPANIES IN THE INDUSTRY
INDUSTRY LIFE CYCLE PHASES: INTRODUCTION
• The introduction phase involves the development and early
marketing of a new product or service. Innovators often
create new businesses to enable the production and
proliferation of the new offering.
• Information on the products and industry participants are
often limited, so demand tends to be unclear.
• The industry tends to be highly fragmented in this stage.
Participants tend to be unprofitable because expenses are
incurred to develop and market the offering while revenues
are still low.
INDUSTRY LIFE CYCLE PHASES: GROWTH
• Consumers in the new industry have come to understand the
value of the new offering, and demand grows rapidly.
• A handful of important players usually become apparent, and
they compete to establish a share of the new market.
• Immediate profits usually are not a top priority as companies
spend on research and development or marketing. Business
processes are improved, and geographical expansion is
common.
• Once the new product has demonstrated viability, larger
companies in adjacent industries tend to enter the market
through acquisitions or internal development.
INDUSTRY LIFE CYCLE PHASES: MATURITY
• The maturity phase begins with a shakeout period, during
which growth slows, focus shifts on expense reduction, and
consolidation occurs.
• Some firms achieve economies of scale, hampering the
sustainability of smaller competitors.
• Barriers to entry become higher, and the competitive landscape
becomes clearer.
• Market share, cash flow, and profitability become the primary
goals of the remaining companies
• Price competition becomes much more relevant as product
differentiation declines with consolidation.
INDUSTRY LIFE CYCLE PHASES: DECLINE
• This phase marks the end of an industry's ability to
support growth.
• Obsolescence impact demand, leading to declining
revenues.
• Decline often signals the end of viability for the
incumbent business model, pushing industry
participants into adjacent markets.
• The decline phase can be delayed with large-scale
product improvements or repurposing, but these tend
to prolong the same process.
FACTORS DRIVING THE EVOLUTION OF INDUSTRIES
THROUGH THE LIFE CYCLE MODEL
Stages
Dimension
Introduction Growth Maturity Decline
Buyer High income buyers so Buyer acceptance and Mass market is Buyers form
behavior low price sensitivity. additional buyers buying reaching saturation. niches where
Buyer inertia so they the product. Buyers accept
Repeat buying specialist
need to be convinced uneven quality. behavior. buyers are
about trying the product. Brands become more knowledgeable
important. .
Product Poor quality and basic Products have technical Superior quality with Little product
development design. and performance less differentiation differentiation.
Product design and differentiation but there is (commoditization). Differentiation
development is increasing standardization. Minor and limited in specific
important given the rapid Continuous improvement product changes. dimensions
changes in design. in products with good creates niches.
Multiple variations, no quality.
standards.
FACTORS DRIVING THE EVOLUTION OF INDUSTRIES
THROUGH THE LIFE CYCLE MODEL
Stages
Dimension
Introduction Growth Maturity Decline
Manufacturing Short production Move towards mass Stable production process. Considerable
runs. production with more Lower labor skills. overcapacity.
High production process improvements. Large production runs to Specialty
costs. Competition for achieve lower costs. channels.
Skill intensive in distribution channels. Distribution channels more Mass
labor. Capacity is insufficient. selective. production.
Excessive Mass channels
capacity. Increasing overcapacity.

Technology Rapid product Product and process Incremental innovation. Technology is

innovation. innovation. widely
available.
FACTORS DRIVING THE EVOLUTION OF
INDUSTRIES THROUGH THE LIFE CYCLE MODEL
Stages
Dimension
Introduction Growth Maturity Decline
Competition Few companies. Entry of many Shakeout. Exits.
competitors. Consolidation. Fewer competitors.
Mergers and exits. Price competition.
Private brands.
Profits High prices and High prices but Declining prices. Low prices and
margins but low slightly lower than Lower profits and margins.
profits. introduction margins. Prices may decline
leading to higher Stable market share but at the end of the
profits. and prices. cycle they may
increase given the
exclusiveness of the
product.
Stage Characteristics Examples
Introduction - Innovations are commercialized - Electric vehicles in the early 2000s.
- Slow sales growth - Smart home devices like Amazon Echo when first
- High cost per customer. introduced.
- Limited competition.
- Negative profits initially.
- Marketing focused on awareness.
Growth - Rapid market acceptance - Online streaming services like Netflix in the late 2000s.
- Increasing sales and profits. - Smartphone market post-2007 with the introduction of
- Economies of scale start to lower costs. the iPhone.
- Increasing competition and product variations. - Social media platforms in the early 2010s.
- Marketing focused on differentiation.
Maturity - Slowdown in sales growth. - Soft drink industry like Coca-Cola and Pepsi.
- Market saturation. - Personal computers and laptops.
- Intense competition. - Mobile phones before smartphones surged.
- Profits stabilize or decline due to price competition.
- Focus on cost control and market share.
- Product features become more standardized.

Decline - Further slowdown or reduction in sales. - DVD and physical media sales with the rise of digital.
- Profit continues to decline. - Traditional film cameras post-digital photography's rise.
- Market consolidation. - Pager devices after the widespread adoption of mobile
- Reduction in number of competitors. phones.
- Shift in focus to niche markets or reinvention.
- Products may become obsolete.
BDA511 54
MEASURES TRACKING THE INDUSTRY
Industry level concepts Product competition and Marketing concepts
• Number of product changes • Level of customization
• Technology changes • Product quality comparative
• Development time for new products • Price and market share
• Relative payment/compensation • Sales force costs/revenue comparative
• Marketing budget/revenue comparative

Research and Development concepts Production and efficiency concepts

• Percentage of sales from new products • Inventory/Sales
• Percentage of R&D investment in new products from • Capacity investment/Sales
sales • Capacity utilization
• Percentage of R&D investment in process • Employee productivity
improvement from sales • Value generated/sales
Vertical integration concepts Performance concepts
• Relative integration upstream (suppliers acquisition/ • Return over Investment
development) • Relative market share
• Relative integration downstream (retail acquisition/
development)
KEY UNCERTAINTIES IN THE INDUSTRY EVOLUTION
Uncertainty Description
Competitors’ The lack of information about competitors’ actions generates a potential dilemma with
actions the investment rate: be aggressive and capture most of the initial adopters of a product
generating competitive reactions; or be cautious avoiding any retaliation from other
firms but capturing a minor market.

Market size The forecast of the market size becomes the base for decisions on initial and future
investments. Optimistic forecasts can generate excessive capacity in the industry.
Pessimistic forecasts imply smaller investments in capacity depressing the future
market development since potential consumers cannot find the product in the retail
channel.
Evolution of Initial customers’ needs and their evolution over time influence managerial decisions
customers’ about the technology trajectory that firms will pursue.
needs over While the number of customers is a function of the current product characteristics,
time changing the product may attract additional customers as they find that the new
product satisfies their requirements.
BDA511 57
End of Lecture

BDA511 58
BUSINESS ANALYTICS STRATEGY
BDA 551

Dr. Matilda Kokui Owusu-Bio

Supply Chain & Information Systems Department
School of Business
CoHSS
[email protected]

MKOB/BDA511 1
Kwame Nkrumah University of
Science & Technology, Kumasi, Ghana

DYNAMIC RESOURCE
MANAGEMENT

UNIT 5

MKOB/BDA511 2
UNIT OBJECTIVE
• Define the Resource-Based View (RBV) of
organizations.
• Understand various resource management models.
• Examine the origins and evolution of dynamic
performance in companies.
• Explore VRIO as a strategic tool for dynamic resource
management.
• Apply analytics to optimize resource allocation and
performance.

MKOB/BDA511 3
THE RESOURCE-BASED VIEW (RBV)
• The Resource-Based View (RBV) is a strategic
management framework that emphasizes an organization’s
internal resources as the primary source of competitive
advantage and long-term success.
• Key Principles of RBV are:
– Heterogeneity of Resources where firms have unique
resources that differentiate them from competitors.
– Resource Immobility where certain resources are
difficult to transfer or replicate, making them a source of
sustainable competitive advantage.
MKOB/BDA511 4
STRATEGY IMPLEMENTATION USING RESOURCES AND
CAPABILITIES
• Organizations implement strategies through the effective use of
resources and capabilities to deliver value and achieve competitive
advantage.
• Resources are assets owned or controlled by a company, such as
financial capital, technology, or intellectual property.
• Capabilities refer to the company’s ability to efficiently use its
resources to perform activities and sustain a competitive edge.
• They serve as building blocks for creating long-term, sustainable
strategies.
• A well-aligned combination of resources and capabilities helps
organizations adapt to market changes and competitive pressures.

MKOB/BDA511 5
STRATEGY IMPLEMENTATION USING RESOURCES AND
CAPABILITIES
Key Steps in Strategy Implementation
1.Identifying Strategic Resources and Capabilities
1.Organizations assess which resources provide competitive
advantage.
2.Example: A company with a highly skilled AI development team
can leverage that expertise for product innovation.
2.Aligning Resources with Strategic Intent
1.Strategy implementation involves nurturing and deploying
resources to deliver on the company’s vision.
2.Example: A logistics company invests in AI-driven fleet
optimization to improve delivery efficiency.
MKOB/BDA511 6
STRATEGY IMPLEMENTATION USING RESOURCES AND
CAPABILITIES

3. Developing and Strengthening Capabilities

1.Continuous improvement in processes, workforce skills, and
operational efficiencies.
2.Example: Training employees to use big data analytics for
dynamic decision-making.
4. Ensuring Sustainability
1.Companies must develop unique and hard-to-imitate capabilities.
2.Example: Apple's integration of hardware, software, and brand
loyalty into a seamless customer experience.

MKOB/BDA511 7
RESOURCES AND CAPABILITIES
• Resources and capabilities offer better anchors for
the design of long‐term sustainable strategies.
• Resources by themselves are not able to deliver
activities but they are the basis of the capabilities;
• For example, a skilled worker is a resource but the
impact of a skilled worker on the organization is
only through his/her ability to perform a certain
activity/task not by simply having the worker
under a contract.

MKOB/BDA511 8
GUIDELINES TO IDENTIFY RESOURCES AND CAPABILITIES

Resources are strategic when they are:

• Valuable (they generate value to the company
through either capabilities or activities),
• Rare (only the company or a few companies have
the resource),
• Inimitable (they cannot be imitated by another
company), and
• Organization (they help other resources as
well).
MKOB/BDA511 9
GUIDELINES TO IDENTIFY RESOURCES AND CAPABILITIES
1. Valuable (V)
•The resource adds value by enhancing efficiency, reducing costs, or increasing
customer satisfaction.
•Example: A proprietary AI algorithm that improves product recommendations.
2. Rare (R)
•The resource is scarce and not widely available to competitors.
•Example: A patented drug formula in the pharmaceutical industry.
3. Inimitable (I)
•The resource is difficult or costly to replicate due to complexity, unique historical
conditions, or social factors.
•Example: A brand reputation built over decades (e.g., Apple’s brand loyalty).
4. Organization (O)
•The company must be structured and capable of leveraging the resource effectively.
•Example: Having the right management processes to fully exploit a technological
innovation.
MKOB/BDA511 10
GUIDELINES TO IDENTIFY RESOURCES AND CAPABILITIES
This perspective is called the VRIO framework as
postulated by Barney and Hesterley (2015)
• It is a strategic analysis framework used to
evaluate an organization's resources and
capabilities in terms of their potential to create a
sustainable competitive advantage.
• VRIO helps organizations identify their unique
resources and capabilities that can lead to a
competitive advantage in the marketplace.
MKOB/BDA511 11
GUIDELINES TO IDENTIFY RESOURCES AND
CAPABILITIES
• A resource, e.g. cash, can be valuable because it
supports other resources (Organization) but it
is not rare or inimitable. This type may be
called generic resources.
• Eg, Financial resources: Money or capital that
can be used to fund various business activities,
Tangible assets like buildings, machinery, or
raw mat
MKOB/BDA511 12
GUIDELINES TO IDENTIFY RESOURCES AND
CAPABILITIES
• Another resource can be valuable, rare and
inimitable, e.g. a famous actor, but it does not
support other resources. This type of resource is
called a discrete resource.
• Eg, Physical resources: machinery, vehicles,
equipment, or inventory that can be used,
Human resources: Individual employees or team
members, each with their unique skills, knowledge,
and experience,
MKOB/BDA511 13
GUIDELINES TO IDENTIFY RESOURCES AND
CAPABILITIES

•Resources can be tangible such as a plant,

stores, inventory or cash.
•Resources can be intangible such as
reputation, technology, intellectual
property and brand.

MKOB/BDA511 14
Intangible Resources (Non-Physical but Strategically
Valuable)
Type Examples
Intellectual Property Patents, trademarks, copyrights,
proprietary software, trade secrets
Technology & Advanced algorithms (e.g., Google’s search
Innovation engine), AI capabilities, R&D capabilities
Brand & Reputation Customer loyalty, trust in company (e.g.,
Apple, Coca-Cola’s strong brand
recognition)
Human Capital Skilled workforce, expertise of employees,
leadership strength, organizational culture
Strategic Alliances Exclusive partnerships, long-term supplier
relationships, joint ventures
MKOB/BDA511 15
UNDERSTANDING HUMAN RESOURCES AS A
STRATEGIC ASSET

Unlike tangible resources (e.g., machinery, inventory),

human resources are unique because:
•They are intangible, relying on employees’ skills,
knowledge, and expertise rather than physical
assets.
•Organizations do not own employees but rather
access their capabilities through employment
relationships.

MKOB/BDA511 16
GUIDELINES TO IDENTIFY RESOURCES AND CAPABILITIES

• Organizational capabilities are the abilities to

perform a certain activity/process reliably
over time using resources.
• Organizational capabilities are based on
routines. Therefore, they can be identified
together with their activities.

MKOB/BDA511 17
GUIDELINES TO IDENTIFY RESOURCES AND
CAPABILITIES

• Dynamic capabilities are situated at the

strategic level.
• Dynamic capabilities are the abilities by which
managers ‘integrate, build, and reconfigure
internal and external resources and
organizational capabilities to address rapidly
changing environments.
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RESOURCE MANAGEMENT
• Resource management is described as an
operational approach to implement strategy
using resources.
• Resource management is the practice of
planning, scheduling, and allocating people,
money, and technology to a project or program.
• It is the planning, allocation, and utilization of
resources to achieve specific objectives in the
most efficient and effective way possible.
MKOB/BDA511 19
CONCEPT EXPLANATION
Strategic Resource Resources are productive factors that
Management organizations acquire to create value and
competitive advantage.
Strategic Factor Some resources can be traded like commodities,
Market Logic meaning companies can buy or sell them for
profit.
Ways to Acquire 1. Informed Acquisition – The company has
Resources detailed knowledge of the resource’s value before
purchasing it.
2️. Uninformed Acquisition – The company
acquires a resource without fully knowing its
impact on value creation.
MKOB/BDA511 20
RESOURCE MANAGEMENT
Effective resource management involves
several key elements:
• Identifying resources
• Prioritizing resources
• Allocating resources
• Monitoring and controlling resources
• Evaluating resource effectiveness
• Resource optimization
MKOB/BDA511 21
RESOURCE MANAGEMENT: MANAGERIAL DECISION-
MAKING
The key component of resource management is managerial
decision‐making. Decision-making is a cognitive process that
results in the selection of a course of action among several
alternative scenarios.

MKOB/BDA511 22
Managerial decision‐making process responsible for resource management.
1. RESOURCE CONCEPTUALIZATION
• Strategic resource conceptualization is a creative and
sometimes visionary process of defining which
resources the business really needs.
• This is essentially a cognitive process. Managers can
define different combinations of resources in order to
deliver similar value to customers and different
combinations can co-exist in an industry.
• Varied managerial conceptualizations of the set of
strategic resources, which can facilitate the existence
of different and, sometimes, successful strategies.
MKOB/BDA511 23
RESOURCE CONCEPTUALIZATION - DIFFERENTIATION
Differentiation Key Resources and Capabilities Description of the driver
Drivers
Strategic choices • R&D (resource) • Strategic choices can generate
• Patents (resource) uniqueness for consumers. For
• Service personnel (resource) example: product configurations and
• New product development variety, service, commitments to
(capabilities) customers, information, level of
• Customer service (capabilities) quality, technology, and human
resources policies.
Linkages • Logistics systems (resource) • Complex products/services involved
• Customer relationship management more than one activity performed in a
systems (resource) coordinate way, especially if it involves
• Supply Chain Coordination external linkages such as channels
(capabilities)
Location • Store locations (resource) • Being the only option in a specific
• Real Estate management (capabilities) location offers uniqueness to consumers
MKOB/BDA511 in the area. 24
Differentiation Key Resources and Capabilities Description of the driver
Drivers
RESOURCE CONCEPTUALIZATION - DIFFERENTIATION
Learning • Customer relationship • Learning from consumers’ experience
(Customers) management systems (resource) to perform key activities better is an
• Knowledge management systems important source to being
(resource) continuously different than
• Customer experience delivery competitors imitating
(capabilities) products/services.
Integration • Logistics (resource) • Delivering certain external activities
• High quality materials production internally can help the company to
(resource) offer activities in a way as they are
• Distribution systems (resource) envisaged by the company rather
• Quality assurance (capabilities) than depending on an external
• Delivery as requested by supplier.
customers (capabilities)
MKOB/BDA511 25
RESOURCE CONCEPTUALIZATION - DIFFERENTIATION
Differentiation Key Resources and Capabilities Description of the driver
Drivers
Scale • Brand (resource) • Certain activities, e.g. global sales,
• Customer relationship require a minimum volume to support
management system (resource) other activities, e.g. design, delivering
• Reputation (resource) uniqueness.
• Development of perceived value
(capabilities)
• Global services (capabilities)
Perception of • Market research department • Understanding how the
value (resource) product/service is perceived by, and
• Customer relationship affect, the consumer is a key driver in
management system (resource) achieving differentiation. Mostly,
• Customer experience delivery helping the buyer to perceive the
(capabilities) value correctly is another driver of
• MKOB/BDA511 differentiation. 26
Cost Drivers Key Resources and Capabilities Description
RESOURCE CONCEPTUALIZATION – COST ADVANTAGE
Economies • Manufacturing (resources) • Economies of scale operate when
of scale • Shared services (resources) activities perform more efficiently at larger
• Distribution system (resources) volume, the cost of certain activities can
• Production at decreasing costs be repaid over greater sales volume or they
(capabilities) have less proportional cost increases
• Expansion of product/services at compared with the output growth.
similar costs (capabilities) • Diseconomies of scale occur when the
increase in an activity leads to complexity
in its management and coordination costs.
• Technology, specialization and minimum
size are important factors affecting
economies of scale

MKOB/BDA511 27
RESOURCE CONCEPTUALIZATION – COST ADVANTAGE
Cost Drivers Key Resources and Capabilities Description
Learning • Knowledge management system • Costs of activities may decline over time as
(resource) the activity is performed more efficiently
• Skilled personnel (resource) due to learning processes. Learning affects
• Production Process improvement the manner in which processes are
(capabilities) performed through improvements. Learning
can occur due to the volume of activity,
slack, level of investment, or simply time.
Capacity • Yield management systems • If an activity has its associated costs
utilization (resource) mainly fixed, the utilization of the activity
• Sales force (resource) will have an important impact on the costs
• Sales fulfillment process associated to it. The configuration of the
(capabilities) activity (internal factor), as well as demand
• Sales forecasting (capabilities) fluctuations (external factors), can affect its
utilization.
MKOB/BDA511 28
RESOURCE CONCEPTUALIZATION – COST ADVANTAGE
Cost Drivers Key Resources and Description
Capabilities
Interrelationships • Group-based operational • In multi-business companies, when an
between business and strategy controlling activity is shared between business
department (resource) units it provides the possibility of
• Business unit synergy increasing its output (utilization),
creation process achieving economies of scale and
(capabilities) learning.
Timing • Planning department • Timing implies the possibility of
(resource) enjoying low costs when acquiring the
• Forecasting and market assets for the activity, e.g. business
research (capabilities) cycles, or obtaining more demand for
an activity, e.g. first mover in a market.
MKOB/BDA511 29
2. RESOURCE DEVELOPMENT
• This step consists of controlling the acquisition and
composition of resources over time.
• The process can be represented as purposeful
adjustment of resources through goal-seeking
information feedback Decision.
• Decisions lead to corrective actions intended to close
observed gaps between desired and actual resource
levels.
• Resource development is an information processing
activity which is imperfect, judgmental and
behavioural.( Decision complexity)
MKOB/BDA511 30
Concept Explanation Example
Resource Development The process of controlling, acquiring, and A manufacturing company
adjusting resources to match the increasing raw material
company’s needs. inventory in response to higher
demand.
Goal-Seeking Information Resource allocation decisions are based A retail company using sales
Feedback on feedback loops, meaning adjustments data analytics to optimize
are made based on data and performance inventory restocking.
evaluations.
Corrective Actions If a gap is found between desired and If customer complaints
actual resource levels, management takes increase, a call center may hire
corrective actions to adjust resource more staff to improve response
allocation. time.
Decision Complexity Resource development requires judgment, Tech firms like Google must
as it is an imperfect and behavioral decide how much R&D budget
process involving multiple variables. to allocate to AI advancements.
MKOB/BDA511 31
3. BUSINESS PERFORMANCE
• A business can be viewed as a set of interdependencies
among resources, forming a unified system that
comprises a network of interconnected internal and
external resources.
• On strategic issues, managers must draw conclusions
and make commitments based on insufficient, unclear,
or conflicting information about the results obtained
from their investments. There are two types of
uncertainties that affect the understanding of the
business performance:
• Internal causal ambiguity
• External causal ambiguity
MKOB/BDA511 32
Type of Uncertainty Description Example
MANAGERIAL
Internal Causal DECISION
Unclear MODELS
internal factors A software company experiences a rapid
Ambiguity within an organization that increase in product adoption after a
lead to certain outcomes; series of changes within the company,
it's not clear which including a software update, new hires,
resources or processes are and a shift in sales strategies.
responsible for success or Management is unsure which change—
failure. or combination of changes—led to the
success.
External Causal Uncertainty about how A fashion retailer sees a fluctuation in
Ambiguity external factors and sales but cannot easily attribute it to the
conditions influence the recent economic downturn, the
organization’s emergence of a fashion trend, or a
performance; it's difficult competitor's aggressive pricing strategy,
to attribute outcomes to all of which are occurring
specific external causes. simultaneously.
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MANAGERIAL DECISION MODELS
Various decision-making models and techniques can
be used to support the managerial decision-making
process. Some common models include:
▪The rational decision-making model,
▪The bounded rationality model, and
▪The intuitive decision-making model.
Managers should choose the most appropriate
model based on the specific context of the decision
at hand.

MKOB/BDA511 34
Decision-Making Model Description Example
Rational Decision-Making Assumes managers will make logical A company deciding on a new location for its
Model and optimal decisions by following a office may conduct a comprehensive
structured and sequential process: analysis of potential cities, evaluate them
defining the problem, identifying the against a list of criteria like cost,
criteria, weighing the criteria, accessibility, talent pool, and then select
generating alternatives, rating each the location that scores highest.
alternative, and making the decision.

Bounded Rationality Model Suggests that managers make rational A manager might need to hire a new
decisions within the limitations of their employee quickly and cannot sift through
cognitive capacity, time, and hundreds of applications. Instead, they
resources. They settle for a satisfactory review a shortlist of candidates that meet
rather than an optimal solution. the essential requirements and choose one
without extensive comparison.

Intuitive Decision-Making Relies on instinct and gut feeling rather An experienced entrepreneur decides to
Model than detailed analysis. This model is invest in a startup not based on extensive
often used when time is limited, data is market research but because they have a
incomplete, or the situation is strong feeling about the potential and the
ambiguous. passion of its founders.
MKOB/BDA511 35
RESOURCE CONCEPTUALIZATION USING VRIO
FRAMEWORK
The VRIO:
• Valuable,
• Rare,
• Inimitability,
• Organization
framework is used to identify what resources
are important for sustainable competitive
advantage by considering the following
questions: MKOB/BDA511 36
RESOURCE CONCEPTUALIZATION USING VRIO
FRAMEWORK

1.How valuable is the resource? Resources have to

provide sustainable advantage for the company.
For example, resources (particularly mobile
resources) such as equipment, staff, and suppliers
may not be valuable to sustain an advantage.
2.How replicable is the resource? Resources that
can be easily copied by rivals offer little scope for
competitive advantage.
MKOB/BDA511 37
RESOURCE CONCEPTUALIZATION USING VRIO
FRAMEWORK
3. Can the resource be substituted? If the business
can fulfil its demands using two indistinct
resources, then the resources cannot sustain
competitive advantage.
4. Are the resources complementary? Resources
work together with other resources but there are
different levels of interdependency. For example,
brand is of little value without the distribution
channels to generate sales.
MKOB/BDA511 38
THE VRIO FRAMEWORK

MKOB/BDA511 39
VRIO Aspect Description Example
Resources are valuable when they enable A strong brand reputation, like
Valuable the company to implement strategies that of Apple, allows for premium
that improve efficiency or effectiveness. pricing.
Patents owned by a
Resources must be rare among current pharmaceutical company, like
Rare
and potential competitors. Pfizer’s patent for Viagra at its
inception.
Resources should be difficult to imitate
or cannot be replicated by other firms. Coca-Cola's secret formula or
Inimitable This can be due to unique historical Amazon's logistics and
conditions, causal ambiguity, or social distribution network.
complexity.
The firm must be organized to capture the Google's organizational structure
value of the resource. This involves allowing it to leverage its data
Organized
having the right processes, systems, and centers and AI capabilities to
structures in place. MKOB/BDA511
improve search algorithms. 40
Circle Explanation Example
Innermost (Orange) Unused Competitive Advantage: A tech company may have a
Resources that are valuable, rare, and portfolio of unused patents that
costly to imitate but the firm is not could be valuable if
currently using them to their full potential. commercialized.
Second Circle Temporary Competitive Advantage: A startup with an innovative app
(Yellow) Resources are valuable and rare, but they idea but without a patent could be
are either imitable or the firm is not yet easily copied by competitors.
organized to capture their full value.
Third Circle (Blue) Competitive Parity: Resources are Generic office equipment or
valuable but neither rare nor hard to standard software that any
imitate. They do not provide any company can use.
competitive advantage but can be
necessary to compete in the industry.
Outermost (Green) Sustained Competitive Advantage: The Toyota's lean manufacturing
firm has resources that are valuable, rare, process which has been sustained
inimitable, and the organization is over a long period and is difficult for
equipped to exploit these resources. competitors to replicate accurately.

MKOB/BDA511 41
THE VRIO FRAMEWORK: VALUE
✓ Value
• Do you offer a resource that adds value for
customers? Are you able to exploit an opportunity
or neutralize competition with an internal
capability?
•No: You are at a competitive disadvantage and need
to reassess your resources and capabilities to uncover
value.
•Yes: If value is established, move on in your VRIO
analysis to rarity.
MKOB/BDA511 42
THE VRIO FRAMEWORK: RARITY
✓ Rarity: Do you control scarce resources or
capabilities? Do you own something that’s hard to find
yet in demand?
•No: You have value but lack rarity, putting your
company in a position of competitive parity. Your
resources are valuable but common, which makes
competing in the marketplace more challenging. It’s
recommended to go back one step and reassess.
•Yes: With value and rarity identified, your next hurdle
is imitability.
MKOB/BDA511 43
THE VRIO FRAMEWORK: IMITABILITY

•Imitability: Is it expensive to duplicate your organization’s

resource or capability? Is it difficult to find an equivalent
substitute to compete with your offerings?
•No: If your resource has value and rarity, but is
affordable or easy to copy, you have a temporary
competitive advantage. It will require considerable
effort to stay ahead of competitors and differentiate your
services—go back one step and reassess.
•Yes: You offer something that’s valuable, rare, and hard
to imitate—now the focus is on your organization.
MKOB/BDA511 44
THE VRIO FRAMEWORK: ORGANIZATION
✓ Organization: Does your company have organized
management systems, processes, structures, and culture to
capitalize on resources and capabilities?
•No: Without the internal organization and support, it will
be difficult to fully realize the potential of your valuable,
rare, and costly-to-imitate resources. Your company will
have a unused competitive advantage and will need to
reassess how to attain the needed organization.
•Yes: Your company has achieved the ultimate goal
of sustained competitive advantage when it has
successfully identified all four components of the VRIO
framework. MKOB/BDA511 45
VRIO ANALYSIS FOR AMAZON

Amazon’s core competencies are based on

organizational capabilities and business resources
that satisfy all of the VRIO criteria (value, rarity,
inimitability, and organization).
Many of the company’s resources and capabilities
satisfy only one or some of these criteria, but support
business growth, nonetheless.
The VRIO table provides an outline of Amazon’s non-
core and core competencies:

MKOB/BDA511 46
VRIO Analysis for Amazon
The following VRIO table provides an outline of Amazon’s non-core and core competencies:
AMAZON’S ORGANIZATIONAL RESOURCES & CAPABILITIES V R I O
– Growing brick-and-mortar presence
– Growing diversity of online services
– Growing portfolio of private label products
– Extensive delivery network involving domestic, regional, and
international partnerships
– Expertise based on a considerable history of e-commerce
– Strategic warehouses and distribution hubs
Sustained Competitive Advantage(s):
– High global brand equity
– High market capitalization
– International network of affiliates that expand international market
reach
– Artificial intelligence capabilities MKOB/BDA511 47
VRIO FRAMEWORK TO ANALYZE APPLE INC.
Resource/Capability Value Rarity Imitability Organization Competitive Implication

Brand Reputation High High Low High Sustained Competitive

Advantage
Proprietary Technology High High High High Sustained Competitive
(e.g., A-series chips) Advantage

Ecosystem Integration High High High High Sustained Competitive

(iOS, App Store, iCloud) Advantage

Design and Innovation High High Moderate to High High Sustained Competitive
Advantage
Retail Presence (Apple High Moderate Moderate High Temporary Competitive
Stores) Advantage
Customer Loyalty High High Moderate High Sustained Competitive
Advantage
Patent Portfolio High High High High Sustained Competitive
Advantage

MKOB/BDA511 48
NETFLIX'S COMPETITIVE ADVANTAGE THROUGH THE VRIO FRAMEWORK
Resource/Capability Valuable (V)? Rare (R)? Inimitable (I)? Organized (O)? Competitive
Implication
Proprietary Yes - Increases Yes - Unique machine No - AI-based Yes - Integrated into Temporary
Recommendation engagement and retention. learning model. recommendations can be Netflix’s data-driven strategy. Competitive
Algorithm copied by competitors like Advantage
Disney+ and Amazon Prime.
Exclusive & Original Yes - Differentiates Yes - Some content is Yes - High costs and Yes - Netflix invests Sustainable
Content (Netflix Originals) Netflix from competitors. only available on Netflix. creative expertise required to billions in content creation. Competitive
replicate. Advantage
Strong Brand & Customer Yes - Recognized globally Yes - Few streaming No - Other streaming Yes - Netflix consistently Temporary
Loyalty with a strong reputation. brands have the same global giants (Disney+, HBO Max) also innovates and adapts. Competitive
influence. have strong brand presence. Advantage
Global Market Expansion & Yes - Worldwide Yes - Few competitors Yes - Licensing Yes - Effective strategy Sustainable
Infrastructure presence in over 190 have similar reach. agreements, local adaptations, and investment in cloud- Competitive
countries. and market penetration are based infrastructure. Advantage
difficult to replicate.
Big Data & Viewer Yes - Drives Yes - Not all competitors Yes - Netflix has years of Yes - Fully integrated Sustainable
Analytics personalized have the same level of data proprietary data. into decision-making Competitive
recommendations and insights. processes. Advantage
strategic content decisions.
Subscription-Based Yes - Provides stable No - Many competitors No - Easily replicated by Yes - Well-structured for Competitive
Business Model revenue streams. (Disney+, Hulu, Amazon new entrants. customer acquisition and Parity (No
Prime) have similar models.
MKOB/BDA511 retention. Advantage)
49
MKOB/BDA511 50
End of Lecture

MKOB/BDA511 51
BUSINESS ANALYTICS
STRATEGY
BDA 511
Dr. Matilda Kokui Owusu-Bio
Supply Chain & Information Systems Department
School of Business
[email protected]

BDA511 1
Kwame Nkrumah University of
Science & Technology, Kumasi, Ghana

REGENERATION
UNIT 6

BDA511 2
UNIT OVERVIEW
• Analyze the critical challenges encountered by
companies during periods of decline.
• Evaluate and apply strategic actions essential for
successful organizational regeneration.
• Utilize appropriate analytical tools to effectively
support and assess regeneration strategies, with
relevant practical examples.
BDA511 3
THE STAGES OF ENTREPRENEURIAL GROWTH
• Start-up: Finding financial resources is critical in this
stage for the business to take off. Many sources can be
from own savings, friends, bank loans to venture
capitalists (when the idea is appropriate).
• Growth: Management can be an important constraint
since the size of the business is expanding rapidly and
the entrepreneur needs to delegate more activities in
order to concentrate on managing the business.
Therefore, recruiting professional managers can be an
option.
THE STAGES OF ENTREPRENEURIAL GROWTH
• Maturity: The challenge in this stage is the
transition into a continuous source of growth
besides the initial business idea, whose sales reach
a plateau. Growth can be achieved by new products
and expansion into new markets but it requires
management skills closely related to mature
organizations in terms of organizational
complexity.
THE STAGES OF ENTREPRENEURIAL GROWTH
• Exit: It is important for consider the timing and
circumstances in which the entrepreneur and the original
funders will exit the start-up by releasing all or part of
the capital. Three options are available:
• selling the company to another company,
• sell to the current professional managers (management buy-
out), or
• stock trading (initial public offering).
THE STAGES OF ENTREPRENEURIAL GROWTH
STAGE EXPLANATION EXAMPLES
Start-up At this initial stage, securing financial - Personal savings
resources is key for business launch. - Loans from banks
Sources may vary based on the viability of - Investments from venture capitalists (e.g., a
the business idea. tech start-up receiving funding from Silicon
Valley investors)
Growth As the business expands, the entrepreneur - A rapidly growing e-commerce site hiring a
must delegate tasks to focus on strategic CFO to manage finances
management, often necessitating - A developing app bringing on a COO to
professional managerial hiring. oversee operations
Maturity Businesses face a plateau in sales and - A mature restaurant chain introducing a new
must innovate with new products or health menu to attract customers
markets, requiring advanced management - A clothing retailer expanding into
skills to handle complexity. international markets
Exit Timing the exit strategy is critical. The - Selling the business to a larger corporation
entrepreneur and initial investors may - Management buy-out, where a company's
choose to sell their stakes wholly or executives purchase a controlling stake
partially. - Going public with an IPO, like how Facebook
went public in 2012
THE DECLINE STAGE IN ORGANISATION’S LIFE CYCLE
There are two possibilities for companies at the
terminal stage either they;
• fail to respond to the decline and go into
liquidation and bankruptcy, or they

• turn around their decline process and

regenerate.
THE DECLINE STAGE IN ORGANISATION’S LIFE CYCLE

There are usually two situations that can unfold

when companies need to regenerate:
• they either respond rigidly towards their
decline or
• innovate and change.
THE FOUR ELEMENTS OF STRATEGIC CHANGE
THE FOUR ELEMENTS OF STRATEGIC CHANGE: DIAGNOSING
THE SITUATION
• Types of change refers to the nature (incremental or radical) and extent
of changes (realigning or transformative) to be introduced into the
organization.
• Context involves the factors that can affect the strategic changes such as
the size of the organization, time available for change, existence of
strengths, managerial capabilities to implement the changes and
organizational readiness for change.
• Culture defines the tacit dimension in organizations that can derail or
support strategic change. Culture comprises symbols, stories, rituals and
routines that define the dominant paradigm in the organization.
THE FOUR ELEMENTS OF STRATEGIC CHANGE:
LEVERS OF CHANGE
• Levers for change refer to the specific methods and tools
that an organization employs to bring about change
• The emphasis can be in ‘hard’ aspects of organizations such
as organizational structure, processes and control systems
including the disposal of assets and cost cutting actions.

• Changes in soft aspects of the organization are

implemented by changing symbols such as objects, events,
rituals, routines, language and behaviors.
THE FOUR ELEMENTS OF STRATEGIC CHANGE:
AGENTS OF CHANGE
• There are three roles for change agents, who are responsible for
the process of strategic change:
• Strategic leadership
• Middle managers
• Outsiders
• Styles of managing change depend on the context and culture
where strategic change is implemented:
• Education
• Participation
• Intervention
• Direction
• Coercion
THE FOUR ELEMENTS OF STRATEGIC CHANGE:
AGENTS OF CHANGE

• Politics refer to the management of the power

structures in the organization.
• Three activities areas are associated with this
dimension:
• Building power
• Overcoming resistance
• Achieving compliance
Types of Strategic Change Programs: Innovation-
Based Strategies:

Longer-term, broader-focused strategies involving

sustained innovation to generate new sources of
growth.

Particularly relevant when decline results from

obsolescence of core products or services.
BDA511 15
INNOVATION – TYPES

• Technology push or market pull

• Product, process and business model

innovation

• Innovator or follower

• Incremental or Radical Innovation

Innovation – Technology push or market pull

• Technology push refers to innovations generated inside

the firm by R&D activities. The driving force is the
technology generated by R&D capabilities which is, then,
commercialized (push) to the market.

• Market pull involves obtaining the ideas for innovations

from the users. More specifically, the organization should
observe the use of the products in the market and listen to
the users, especially lead users.
Innovation – Product, process and business
model innovation
• Product innovation implies an emphasis on changing the
characteristics of the product or service.
• Process innovation involves changes to the activities related
to the production and distribution of the product/service to
improve either costs or reliability (delivery, quality, etc.).
• Business model innovation involves changes to all
dimensions related to products and processes. However,
changes do not need to be associated with new technologies
but by the way to deliver value to customers
Innovation – Innovator or follower
• Innovator, first-mover or leader, is the first to bring to
the market innovations with the idea of achieving
experience faster than competitors, obtaining faster
economies of scale, locking in strategic resources at low
costs, and building reputation to dominate the market.
• Follower or late-mover involves entering the market
after the pioneer or first-mover as the company imitates
the full innovation with less costs (if the technology,
resources and consumers are widely available) and learn
the problems faced by the pioneer to implement the
innovation more effectively and efficiently.
Innovation – Incremental or Radical Innovation
• Incremental innovation corresponds to changes in business
models, products, services and processes that do not deviate
substantially from the established forms existing in the market and
the industry. It exploits the potential of existing technologies,
knowledge and designs. Incremental innovations reinforce the
dominance of existing technologies, knowledge and design.

• Radical innovations are significantly different to established

business models, products, services and processes. They produce
substantial changes in performance improvement related to either
customers’ needs or costs. They destroy the competitive advantage
of companies based on existing technologies, knowledge and
designs.
Type of Innovation Description Examples
Technology Push Innovations generated internally - The creation of OLED screens by tech
from R&D activities and then companies for smartphones.
commercialized to the market. - Development of mRNA vaccine technology by
pharmaceutical companies.
Market Pull Innovations driven by user needs - The rise of social media platforms like
and demands. Companies Instagram based on the desire for visual social
observe and listen to the market, networking.
especially lead users, to guide - Electric cars like Tesla being developed in
development. response to environmental concerns and
consumer demand for sustainable options.
Product Innovation Emphasizing changes in the - Smartphone manufacturers introducing
characteristics of a product or models with better cameras and battery life.
service. - Fast-food restaurants adding plant-based
burgers to their menus.
Process Innovation Changes in the activities related - Implementation of automated assembly lines
to the production and distribution in manufacturing.
of a product/service to improve - Adoption of software like Salesforce for better
costs or reliability. customer relationship management.
BDA511 21
Type of Innovation Description Examples
Business Model Changes to all dimensions related to - Subscription services like Netflix transforming from
Innovation products and processes, altering the mail-order rental service to streaming.
way value is delivered to customers. - Companies like Airbnb revolutionizing the
hospitality industry with peer-to-peer
accommodation sharing.
Innovator or First- Companies that are the first to bring - Amazon's introduction of cloud computing services
Mover innovations to the market, aiming for with AWS.
rapid scale and market dominance. - Spotify's early entry into the music streaming
service.
Follower or Late- Companies that enter the market - Microsoft entering the game console market after
Mover after innovations have been Sony and Nintendo with its Xbox.
established, often imitating and - Huawei catching up in the smartphone market by
refining the innovation. following innovations introduced by earlier players.
Incremental Small, continuous improvements - Yearly updates to existing smartphone models
Innovation that do not significantly deviate from - Continuous improvement of car engines for fuel
what's already available in the efficiency.
market.
Radical Innovation Major changes that significantly differ - The introduction of the internet.
from established offerings and can - The shift from feature phones to smartphones.
disrupt existing market dynamics. BDA511 22
Turnaround Strategies – A model
CASE STUDY REVIEW
&
EXERCISE

BDA511 24
CASE STUDY: ADOM SUPERMARKET LTD.: TURNAROUND AND STRATEGIC REGENERATION

Context of Decline
Adom Supermarket Ltd., a once-thriving supermarket chain in Ghana, has recently faced severe
business decline. Established in 2005, Adom Supermarket grew rapidly, becoming a household
name due to its high-quality products, competitive prices, and excellent customer service.
However, from 2021 onward, the company experienced declining sales due to increased
competition from new international supermarkets (such as Shoprite and Melcom) and aggressive
local competition, compounded by poor internal management decisions, high operating costs, and
inefficiencies.

Applying the Strategic Turnaround Model

Step 1: Diagnosing the Situation (Sources and Magnitude of the Difficulty)

• Internal Sources:
o Outdated inventory management system causing frequent stock-outs and excess
inventory.
o High operational costs, especially due to manual administrative processes and poor
energy management.
o Poor management culture resistant to technological innovation.
• External Sources:
o Increased competition from Shoprite and Melcom, offering more modern facilities,
wider variety, and better prices.
o Economic pressures from inflation and reduced consumer purchasing power in
Ghana.
• Magnitude of Difficulty: High
o Adom's declining sales, shrinking market share, and growing losses indicate the
need for radical changes and restructuring.

Step 2: Retrenchment Phase (Immediate Crisis Response)

To stabilize finances and halt further losses quickly, Adom Supermarket must immediately:
• Cost Reduction:
o Eliminate unnecessary expenses such as non-essential administrative roles,
renegotiating supplier contracts, and reducing overhead costs (e.g., electricity and
rent renegotiation).
o Example: Close non-profitable branches located in low-traffic areas to significantly
reduce operational expenses.
• Asset Elimination:
o Divest non-profitable assets or close underperforming branches to generate quick
capital.
o Example: Selling or leasing out underutilized store space or assets.

Step 3: Revitalization Phase (Long-Term Strategic Actions)

Having stabilized operations temporarily, Adom Supermarket must now focus on strategic renewal
by:
• Resource Efficiency Improvement:
o Introducing modern, computerized inventory management systems and automation
of administrative processes to reduce operational inefficiencies.
o Example: Using automated inventory software to improve inventory accuracy,
reducing holding and restocking costs.
• Strategies for Regeneration:
o Market Penetration: Introducing customer loyalty programs and promotions to
increase customer retention.
o New Markets: Expanding into emerging residential areas within Kumasi or Accra,
where market competition is lower.
o New Product Development: Offering online shopping and delivery services, meeting
growing customer demands in urban Ghanaian areas.
o Process Innovation: Digitizing administrative processes to reduce operational costs,
increase efficiency, and improve service delivery speed.

Step 4: Achieving Balance

Effective regeneration requires balancing the short-term urgency (retrenchment) with long-term
growth strategies (revitalization):
• Short-term cost-cutting actions must be balanced with long-term investments in
technology, human resources training, and customer-focused innovations.

Step 5: Performance Renewal (Outcomes)

Successful implementation leads to:
• Renewed profitability.
• Sustained competitive advantage.
• Increased market share and customer satisfaction.
• Operational efficiency and long-term sustainability.

CLASS EXERCISE QUESTIONS

Data Import and Preparation

1. Import Data:
o Import the provided SWOT analysis dataset into Power BI and examine its structure.
o What insights do you initially observe about the dataset?

SWOT Analysis Visualization

2. Category Analysis:
o Create a visual chart displaying the total number of factors under each SWOT
category (Strengths, Weaknesses, Opportunities, Threats).
o Which SWOT category has the highest overall number of critical factors?

3. Impact and Urgency Analysis

o Using bar or column charts, visualize the top 3 SWOT factors with the highest
Impact Score and highest Urgency Score.
o List these top factors and explain their potential implications on Adom
Supermarket’s turnaround strategy.

Financial Impact Analysis

4. Financial Impact Exploration:
o Identify the top 3 SWOT factors that have the highest Financial Impact (GHS).
o Visualize these factors using appropriate Power BI visuals and discuss why
addressing these factors quickly could significantly affect financial performance.
5. Departmental Responsibility Analysis:
o Using a matrix visual, show which department is responsible for addressing the
highest number of SWOT factors.
o Based on your analysis, suggest two departments that should receive priority in
turnaround planning. Justify your choice with insights from your visualization.

Strategic Recommendations
6. Strengths-Leverage Recommendations:
o Identify two major strengths with the highest combined impact and urgency scores.
o Provide clear recommendations on how Adom Supermarket can leverage these
strengths in its turnaround strategy.
7. Weakness-Mitigation Recommendations:
o Identify two critical weaknesses with the highest urgency and financial impact.
o Recommend immediate actions Adom Supermarket management should take to
mitigate these weaknesses.
8. Opportunities-Strategic Prioritization:
o Identify two major opportunities with the longest duration potential.
o Suggest strategic actions Adom Supermarket can take to capitalize on these long-
term opportunities.
9. Threats-Risk Management Recommendations:
o Identify the top two threats with the highest financial impact and urgency.
o Recommend proactive strategies Adom Supermarket should employ to minimize or
manage these threats effectively.

Balanced Strategy Development:

10. Balanced SWOT Strategy (Holistic Insight):
• Using insights from the above analyses, summarize a balanced strategy (in no more than
100 words) that integrates strengths, minimizes weaknesses, captures opportunities, and
mitigates threats, suitable for presentation to Adom Supermarket's executive management.

Deliverable
• Each student(this is an individual assignment) should submit a brief analytical report that
includes:
o Screenshots of Power BI visuals answering each question.
o Short, insightful interpretations of visuals and data.
o Strategic recommendations clearly addressing each question.

• Submit via email to [email protected] deadline 6TH April 2025