Is Decision Based Evidence Making Necessarily Bad Problem Statement
The problem statement refer to the concise description of the issues that needs to be addressed. It identifies the issues or gap between the current and desired type of the organization, and thus requires to be stated in order for the management to look for change. The main idea of the problem statement is to answer the 5 w’s that include the answering who, what, where and why, to allow the organization resolve the problem, by stating it in clearly in 2 to 3 lines.
In recent period, the problems statement are widely used by the firms to allow the management execute the improvement process or identify the loopholes that are effecting the overall performance or profitability of the company. Moreover, the problem statement allow the management to trim down the symptoms of the problem an organization is facing and look on to the real problem that is causing the damage to any specific aspect of the company.
Basically, developing a problem statement is an extensive process and requires the proper brain storming of the teams in order to identify the underlying loopholes or inefficiencies within the organization. Also, it offers the specific insights to the management in understanding and looking at the factors that have been hidden from the management sight, effecting the performance slowly and gradually.
Apart from this, while developing the problem statement, it is important for the Problem statement to be clear and concise. Such is due to the fact, that it allows the management, stakeholder to quickly understand the finding and also look on the main problem, rather getting entangled in the symptoms of the problem. The conciseness of the problem statement is the key, as it allows the reader to quickly understand the issue.
Moreover, clarity of the Is Decision Based Evidence Making Necessarily Bad problem statement is important to maintain, in order to avoid the misunderstanding between the shareholders and stakeholders. The clear problem statement is developed by stating the factors and the operations getting effected and its overall impact on the organization specific the areas, such as Profitability, sales or brand equity. Also, the purpose of the problem statement is to describe the external environment and its effect on the overall organization in short and long-term. Moreover it also delineates the impact of such changing factors on the users, and other stakeholders.
Many times, under the case analysis, the purpose of the problem statement is to improvise the current state of the organization through pursuing innovation or other changes. hence ins uh cases, the direct problem is no the ultimate organization factors but the process implementation that is needed to e in lace, in order to bring change , avoiding the upcoming risk and hence sustaining the competitive edge in the market (Spradlin, 2012).
Furthermore, the establishment of the problem statement, allows the organization and the management teams to work in a specified direction. Such is important in order to allow the organization move in a specified direction, reducing the chances of deviating From the actual path. Also, it offers the benchmark to match the desired condition of the organization, hence putting the efforts of the team in the right direction.
Yet, it is important to note that, the good problem statement does not delineates the solution or the symptoms of the problem, but it clearly states the gap that lies within the organization. Moreover, it is also determined, that a clear problem statement is half of the solution, hence it is important To state the problem correctly.
In addition, the problem statement is a group process, and hence requires a detail understanding of the issues the organization may be facing, by all members in the team. This will allow the team to develop a better solution plan addressing all the factors and considering all the risk associated with it.
Perhaps, stating the Is Decision Based Evidence Making Necessarily Bad problem statement is not just writing the fact, it’s more about the factors that are effecting or may affect the organization in long term, therefore, while developing the problem statement, the factors such as human resource skills innovation, technology, change resistance are considered, that have a direct effect on the organization or is hidden cause of the problem. It is important to note, that the problem statement can cover tangible or intangible issue but it needs to have a clear relationship with the organization end goal.
In addition, while stating the problem statement, the aim of the management is to see the mission and vision of the company and then analyze the current state of the organization, such also allow the right identification of the problem and the lead to the development of concrete problem statement.
All in all, the problem statement gives a direction to the organization in understanding the right solution path and also development of the solution sets in order to overcome the current issues that are deteriorating the organizational performance or productivity. Perhaps, while writ the problem statement, it is important to consider the small factors that are often overlooked such as the intangible factors that effects the productivity of the organization in the long-term.
Is Decision Based Evidence Making Necessarily Bad SWOT analysis
The acronym Is Decision Based Evidence Making Necessarily Bad SWOT stands for strength, weakness, threats and opportunities. It is a useful tool that is widely used for strategic planning and management in many organizations. It is effectively used in building strategies for the organization to maintain its competitiveness in the market. It is simple yet powerful tool that help the organization in identifying its existing resources, capabilities, deficiencies, the existing opportunities and threats prevailing in the market.
It is a strategic planning framework that is commonly used to evaluate the organization, a plan, business or any other project. It helps in determine the organizational and environmental factors that could affect the decision to be made. It is carried out to analyze the position of an organization in in the market compare to its competitors and the major factors that are affecting the competitiveness before crafting any business strategy.
SWOT analysis mainly have two dimensions internal and external dimensions. Internal dimension includes all the factors that could affect the organization which is the strength and the weakness while the external factor includes the environmental factors that is the opportunities and the threats.
Components of Is Decision Based Evidence Making Necessarily Bad SWOT analysis
SWOT analysis is a process that include four areas that are further divided into two dimensions i.e. internal and external factors. In SWOT analysis the strong and weak aspect of an organization is determined by evaluating the elements within the environment while the opportunities and threats of an organization are determined by examining the element outside the environment. In this way SWOT allows the comparison of organization’s resources and capabilities with the competitive environment in which it is operating.
Structure of Is Decision Based Evidence Making Necessarily Bad SWOT analysis
In order to carry out the analysis it is important to understand each element of SWOT i.e. strength, weakness, opportunities and threats.
Is Decision Based Evidence Making Necessarily Bad Strength
Strength is a characteristic that adds value to something by making it more special, unique and advantageous when compared. In this element of SWOT the abilities and the key properties of organization are discussed that gives an organization an advantage over other organizations by making it more competitive. It defines the characteristics and situations of an organization which makes it more effective and efficient when compare with its competitors.
It defines the areas in which the organization hold a command or is good at doing it and that provides the organization and important capability. It can be a skill, a resource, image, market leadership, relation with buyer or supplier or any other advantage relative to its competitors that fulfill the needs of the market by providing the organization with a comparative advantage.
Is Decision Based Evidence Making Necessarily Bad Weakness
Is Decision Based Evidence Making Necessarily Bad Weakness refer to the situation in which the existing capabilities and the resources the company holds are weaker or not sufficient compared to others organizations in the market. In other words it means the aspects in which the organization is less efficient and needs to improve in order to align with the market trends. As these aspects negatively affect the overall performance of the organization by making it weaker compared to its competitors.
These are the factors that an organization lacks and does poorly in comparison to the organizations operating in the same market at the same level. It is a deficiency or limitation of resources, capabilities, skills that majorly affect the organizations effective performance. Management capabilities, Facilities, financial resources, marketing skills and the weak brand image can be the sources of weakness.
Is Decision Based Evidence Making Necessarily Bad Opportunities
Is Decision Based Evidence Making Necessarily Bad Opportunity is an advantage and the driving force for an organization. It is the convenient time or situation that is present in the environment and will help the organization in achieving its goals. It is a factor that contribute positively towards the growth of the organization. It is a condition existing in the external environment that allow the organization to take an advantage of the organizational strengths, and help in overcoming the weaknesses and to neutralize the threats present in the environment.
Is Decision Based Evidence Making Necessarily Bad Threats
Threats are the factors that prevent the organization from the actualization of an activity. It is an unfavorable situation that exist in the environment making it difficult for the organization to achieve its defined goals. It is a situation that arises as a result of the changes that took place in the immediate or distant environment, preventing the organization from maintaining its existence and superiority in the growing competition and are disadvantageous for the organization.
All the environmental factors are consider as a threat to an organization that could affect the efficiency and effectiveness of the organization.
Limitations of Is Decision Based Evidence Making Necessarily Bad SWOT analysis
However there are certain limitation attached with it. The SWOT analysis is only a one stage of the business planning process and do not provide the organization with an in-depth analysis or research that could lead to a firm decisions. Apart from this it only cover the issues that are definite and doesn’t priorities them. In addition to this it does not provide any solution or alternatives decisions. As a framework, SWOT does processes a value but it doesn’t provide the organization with any specific direction on how the key aspects can be identified. It significantly rely on the capabilities of the manager that how effectively it can prioritize and determine the most important element. Another limitation associated with Is Decision Based Evidence Making Necessarily Bad SWOT analysis is that it provide equal weight to each factor regardless of their impact or relevancy.
Is Decision Based Evidence Making Necessarily Bad Porter’s Five Forces
Is Decision Based Evidence Making Necessarily Bad Porter five forces reflects the competitive environment of an industry. It is a strategic tool that is used to avoid or minimize the risk of losing the competitive edge that the organization has and to ensure the profitability of the products in the long run. The company holds its vision closely as it allows them to orientate its innovation in terms of choices regarding the investment and strategies. Within the industry the businesses profitability is dependent upon the following forces:
- Competitive rivalry
- Threats of new entrants
- Threats of substitute
- Bargaining power of suppliers
- Bargaining power of customers
Structure of porter’s five forces analysis
Is Decision Based Evidence Making Necessarily Bad Competitive rivalry
The competition among the firms help in identifying the lucrativeness of an industry where companies are competing hard in order to maintain their power within the industry. The Is Decision Based Evidence Making Necessarily Bad competition is moreover on basis of diversity, the development within the sector and the barriers related to entrance in the market. The competitive rivalry is the analysis of the brands and the product, its strengths and weakness along with the strategies, competitors and the share in the market.
Threat of new Is Decision Based Evidence Making Necessarily Bad entrants
It is in the favor of the companies that exist in the market to create barriers for the new entrants to prevent them from entering into the industry. The organizations could be the new companies or the companies that are planning to diversify itself in the market. The barriers can be both industrial and legal. Apart from this the size and the reputation of the companies that are already operating in the market also play an important. Furthermore the cost related to the entry, access to raw materials, barriers related to culture and technical standards also play a major role and can affect the decision of the new entrants in the market.
Threat of substitute products
The Is Decision Based Evidence Making Necessarily Bad substitute products are an alternatives that are available in the market at comparatively better prices. Such products prevail due to the technological and innovative advancement. Due to which the products being produced by the companies that are already existing in the market and is using the same technology are than replaced by the other company’s products that are comparatively better in terms of price and quality and are being produced from sectors with significant profits. The substitute products are dangerous as the companies are under constant threat of being replaced.
High threat of substitute leads to low profitability as it limits the industry profits by placing a price ceiling due to the fear of being substituted by other product. Apart from this it also affect the growth potentials of the industry as a whole but reducing the profitability margins.
Bargaining power of suppliers Is Decision Based Evidence Making Necessarily Bad
Powerful suppliers possess more power to capture significant value for themselves by demanding high prices while limiting the quality and the quantity of the product or services or by transferring the cost on the participant of the industry. Many condition imposed by the suppliers generally include the increase in price while compromising the quality and quantity.
A bargaining power of a supplier in the market is strong if:
- It is more concentrated than the industry it is selling to.
- It is not heavily relying on the industry for its profits
- If the participants in the industry have to incur high cost for switching suppliers or the firms are located adjacent to the suppliers manufacturing facilities.
- The product being offered by the suppliers are highly differentiated.
- And when there is no close substitute available for the products being supplied by the suppliers.
Is Decision Based Evidence Making Necessarily Bad Bargaining power of customers
The buyers having strong bargaining power can highly influence the profitability of the suppliers operating in the market by imposing condition that are not much favorable for the suppliers in terms of price, quality or service. Therefore choosing clients often become crucial for the organizations as to avoid the situation of being highly depended on the buyers. The level of interest and concentration of buyers toward the product gives them more or less power.
Powerful buyers could flip the side of the powerful supplies by forcing the prices to move downwards and by demanding high quality and services by creating a competition between the participants in the industry on the basis of price and quantity. Is Decision Based Evidence Making Necessarily Bad Customer are deemed strong if they contain negotiating leverage specifically if the industry is sensitive to price, the buyers can pressure suppliers for further price reductions.
The customer are assumed to have strong buying power in case:
- If the number of buyer are limited or each of the buyer purchases large quantity relative to the size of the suppliers.
- The products in the industry are standardized or are undifferentiated.
- The cost of switching is comparatively low.
Limitations of Is Decision Based Evidence Making Necessarily Bad Porter’s five forces
Though the model from a strategic point of view is an important tool but there are certain limitation associated with the application of the porter five forces model. The framework use a classic perfect market and relatively a static structure of market i.e. it only incorporates the aspects of the present day and only incorporate the events that took place within the short term period. Is Decision Based Evidence Making Necessarily Bad Apart from the model only provide the overview of the environment and does not define the industry clearly. As it can be difficult to group the companies having similar business lines and to call it an industry. Therefore Porter framework due to its limitation is too inert to be depending upon outside the short term to medium, term objectives. It emphasizes more on external factors and ignore the specific factors that are more specially related with the firm. The model doesn’t incorporate new business model and the changing dynamics of the market and the impact of globalization. Moreover it does not consider non-market forces.
Is Decision Based Evidence Making Necessarily Bad PESTLE Analysis
PESTLE analysis is one the significant and widely used tool or framework mostly by organizationswith the intent of considering the market environment before commencing the process of marketing. In fact, the analysis of the environment needs to feed all planning aspects as well as it should be continuous. The internal environment of an organization includes internal customers or staff, wages, office technology and finance etc. whereas the micro environment includesthe external customers of an organization, distributors or agents, competitors and suppliers. Additionally, the macro environment includes legal and political factors, sociocultural forces, economic forces and technological factors.
For the purpose of maximizing the benefits of such analysis, it is important that it should be used on regular basis so that an organization would be able to identify the trends. The effect of the particular external factors or forces might have extreme consequences for the specific department or divisions, also the analysis better helps companies in clarifying the needed or required changes, thus identifying the potential options (Norton, 2008).
The factors or forces are discussed below;
These are the Is Decision Based Evidence Making Necessarily Bad forces that tends to be altered by the influence of government on the infrastructure of country. The political factors may involves environment regulations, employment laws, tariffs, tax policy, trade restrictions, political stability and reforms. It is noteworthy, that the charities needs to be included where a government are not willing services and goods to be provided.
The Is Decision Based Evidence Making Necessarily Bad economic factors or forces involves interest rates, inflation, and growth of economy, cost of living, working hours, wage rate and exchange rates. Combining these factors, it last greater and inevitable impact on organization.
The culture or social influence on certain businesses vary from country to country. It is significant to consider these factors. The social factors includes safety and health consciousness, various demographics, population growth rates and cultural aspects.
Notably, Is Decision Based Evidence Making Necessarily Bad technology is one of the most important way of being competitive in the highly competitive market arena. Not only this, it drives globalization, the factors includes environmental and ecological aspects, and available services as well as products. An organization should innovate and be compatible with the technologies.
The Is Decision Based Evidence Making Necessarily Bad legal factors involves the certain laws and regulations which might effect on the business operations of an organization. It also includes impending and current legislation that tends to impact on the industry in areas including competition, employment, safety and health. An organization should consider the influence of the national and international laws where the organization would originate the business operations.
The environmental factors include all those factor lasting impact or influence, the surrounding environment most likely determine environmental factors. The factors involves awareness of the seasonal or climate change or terrain variation. The analysis of the environment including internal and external elements is vital for organization since it impacts on the performance of an organization.
Limitations of Is Decision Based Evidence Making Necessarily Bad PESTLE:
The limitations are discussed below;
- The external factors are dynamic and can be change at a rapid pace. Overtime, the changes might be occur in less than one day, therefore the companies should make it tricky in order to predict how and why these forces might influence the future or present of the certain project.
- There are many occasions, in which the environmental changes have an adverse influence on the project that might not be noted in the initial stages of project, indicating that the uncertainty sis still there even after the pestle analysis have carried out. This in turn might defeating the prime reason of the pestle analysis.
- The usual or common procedure for pestle analysis is presenting a simple list of the environmental factors affecting the project. Until& unless, the organization critically examine the attributing factors, the analysis’s findings does not seem to be of greater value or consideration.
- The analysis is supposed to be insufficient for the strategic planning objective, since it likely scans the externa environmental, whereas avoiding the competitive scenarios and internal environment. Nonetheless, the analysis needs to be conjunction with other frameworks such as S-W-O-T analysis in order to get a more realistic picture.
Is Decision Based Evidence Making Necessarily Bad Conclusion
To conclude, PESTLE analysis is considered as an effective tool of planning and it offers viable and effective technique foranalyzing and scanning the operating environment of an organization. The effectiveness of the analysis highly depends on the accuracy of the collected data, updates to accommodation changes in timely manner and other tools trimming down the PESTLE limitation to some extent.
Is Decision Based Evidence Making Necessarily Bad VRIO Analysis
The Is Decision Based Evidence Making Necessarily Bad VRIO analysis is basically the extension of the Is Decision Based Evidence Making Necessarily Bad PESTEL analysis, which allows the oragnation to understand the resources, competitive edge, value proposition and its value in the market. The Basic idea of the Is Decision Based Evidence Making Necessarily Bad VRIO model is to analyze the factor that are valuable for the organization. Such may include the supply chain efficiency, value chain maintenance, technology or other factors, that offer value to the company and in return allows the organization to offers similar value to the customer.
In addition, it also analyze the factors that are Rare within the organization. Such analysis of the compatibilities or capacities is important, as it allows the organization to develop the sustainable competitive edge over it. The value factor analysis of the organization gives an eye opening view to the management and also offers the solution on where the organization may build the market utilizing the area value creation factors
Moreover, it also determines the Imitable factors. These are the factors that are easily imitable by the organization (other players) and thus needs to be considered. In addition, the imitable factor also outlines the factors that are inimitable by the other organization. These in-imitable factors allows the organization to developed the sustained competitive edge in the market and hence enhances the chances of sustainability ion the long-term.
Lastly, Organization factor includes the resources and functions that are offering certain value to the company. This determination of organization allow to the company to understand what additional things or function is required to be in place, or needs to be improvised in t=long term.
All in all, the advantage of using the VRIO analysis is to determine the sustained competitive edge in the market. Such determination is important for the organization to expand in the market and continue its operations with sound profitability. In addition, it offers clear view what are the factors that are valuable and inimitable o can be easily imitated in the long-term, thus preparing the organization to either use the valuable factor to delight the customer and develop a sustained competitive edge, or enhance its value and oragnation strengths to develop a strong competitive edge in the market, which is important to develop and maintain in order for the organization to remain profitable and allow the maintenance of market share in the long-term (Hille, 2015).
Is Decision Based Evidence Making Necessarily Bad Financial Analysis
Is Decision Based Evidence Making Necessarily Bad Financial analysis is the assessment of the stability, viability as well as profitability of a sub-business, business or project. It is the process that is widely used for identifying the financial weaknesses and strengths of the corporations, this can be done by building the relationship between items of the profit & loss account and balance sheet. It can be used for examining the business operations from the variety of perspective for determining the ways that can be used to strengthen the business and understating the greater financial condition or situation. The process scan the financial statement to evaluate the relationship the disclosed items. In other words, the analysis keep focusing on the past performance evaluation in terms of profitability, liquidity, growth potentiality and operational efficiency. The analysis of the financial statement involves the methods use in interpreting and assessing the outcome of the current and past financial position or performance since they associate to particular interest factors in investment decisions. Thus, the analysis of the financial statement is important mode of assessing the past performance as well as planning and forecasting the future performance.
Elements Assessed By Is Decision Based Evidence Making Necessarily Bad Financial Analysts:
The elements are listed below;
Profitability:the financial analyst generally assess profitability of an organization since it is the ability allow organization sustaining growth and earing income in both long term and short term. A degree of profitability of an organization highly depends on the income statement reporting on the operations results of company.
Solvency:it is the ability of an organization paying off its liabilities or obligations to third parties or creditors in long term. The solvency depends upon the balance sheet of company indicating the company’s financial condition at a given period of time.
Liquidity: it is the ability of an organization satisfying immediate obligations, maintaining positive cash flows and it most likely based on the balance sheet of company depicting the financial condition of organization.
Stability:the ability or an organization to remain in the business for the longerperiod of time without sustaining significant losses while conducting the business operations. By assessing the stability of the company needs use of balance sheet and income statement as well as non-financial and financial indicators.
Users of Is Decision Based Evidence Making Necessarily Bad Financial Statement Analysis
The users of the financial statement are listed below;
- Management:the controller of the company most likely prepares the ongoing analysis of the financial results of companyin relation to the unseen operational matrices by outside entities.
- Investors: both prospective and current investors tends to examine the financialstatements for leading the ability of company to continue generating cash flows, issuing dividends and growing at historical rate.
- Creditors:one who has landed funds to the organization likely show his interest in its ability paying back the debt, thus keep focusing on measures of cash flows.
Types of Is Decision Based Evidence Making Necessarily Bad Financial Analysis
Significantly, creating the financial ratio add meanings to the accounting and financial data of the business. Therefore, being the use of the financial ratios would provide assistance thereby leading to the overloaded information. Theratios are sub-divided into the major groups that tend to cover the financial areas.
The sales amount of an organization depicts the business size. The sales implications for the selling and purchasing power, economies of scale and amount of market share. The % change in sales invocates that how rapidly or quickly the sales has been growing over the period of time, thus leading to answer the question regarding growth in relation in competitors and general economy.
It is significantlyimportant for companies measuring profit in context, for example; if it is stated that the company has generated 10% profit returns and did not ensure the provision of profitability-oriented information but in case if the company had make a 10% gross profit or return on equity, then the profit term would give meaning. The ration lay under profitability are discussed below;
Return on assets (ROA): it is one of the most commonly and widely used performance measure of an organization. The return on equity likely measures the profit amount that had generated by assets. It is used with the intent of analyzing that how well an organization have put their assets to work comparing to other competitors.
Return on equity (ROE): This performance measuring parameter measures the return that the company has earned in relation on the owner funds. The matric can be adjusted for thepurpose of reflecting the average equity amount being employed during the span of year, giving the more accurate and realisticpicture of how the organizationhas been performing throughout the year.
Gross profit margin (GPM):it is also referred to operating profit margin. It is most common use with the objective of assessing the business model and financial health of company through revealing the remaining portion of money from revenues after deducting cost of goods sold.
Operating return on total assets (ORTA): this matric most commonly provides better way of looking at the ability of the organization to generate profit returns from the principle or core activities since it does not involves other expenses including interest expenses not it includes marketable securities income, interest income or onetime extraordinary transaction.
Asset Management – Is Decision Based Evidence Making Necessarily Bad
The ratios under asset management includes current asset turnover, day’s receivable, days of inventory and inventory turnover.
Asset turnover: this measure is widely used in order to measure the ability of the company in generating sales from the fixed assets. Not only this, it also indicates that an organization has a lot unproductive assets for instance inventory, receivables, equipment and plant for its current sales’ level.
Fixed assets turnover: it is supposed to be vulnerable to the asset valuation issue. It is most important ratio in companies which are capital intensive. It is comparatively low importance for the companies with minimum need for capitals such as leased retail operations and wholesale distribution. In case an organizationis decreasing fixed asset turnover so it means that the production has been running at lower than capacity.
Current asset turnover:it measures the current asset level that is require for supporting sales.
Day’s receivables: it is the measure of how long will it takes for an organization collecting bills owing to it. The collection time is measured by days receivables on credit sales.With increasing day’s receivable, the company would need more working capital. The credit policy of an organization last greater impact on the day’s receivables. It is important to note there that it also highlights the needs to beaware of keep emphasizing on the company’s specific concerns without appreciate secondary influence on other ratios.
Days of inventory: it is the indication of how the company efficiently managing inventory. The inventory amount can be monitored by analyzing day’s inventory ratio.
Is Decision Based Evidence Making Necessarily Bad Financial Structure
Financial leverage multiplier: it is the connection between return on equity and return on assets of an organization. It provides the way of looking at the relative equity and debt amount that has been using by company in order to finance the assets.
Current debt to equity ratio: it is the mix if the debt of an organization. In case of high current debt to equity ratio, it means that the company would be in problematic situation while paying its bills.
Equity turnover: in case of high debt to equity ratio, it might because of the too little equity or too much debt burden on an organization. In case of high equity turnover ratio, indicating that the shareholders have efficiently used equity.
DuPont’s Is Decision Based Evidence Making Necessarily Bad Profitability Model
It is considered as the best model as it does not reveal anything regarding the liquidity of an organization. Also it likely reveals about the organization’s expense. One of the unavoidable advantage of this model is thatit has begun establishing benchmarks – across companies and over the period of time which can be used for flagging the potential issues areas where more than one ratios are reflecting the key problem or issue.
Trend or Percentage Analysis
The useful snap shot can be taken by analyzing the financial condition of an organization in a particular time period. Also, there are many questions that can be bets answered by comparing the figures in Is Decision Based Evidence Making Necessarily Bad percentages. For instance; which are the areas of company getting stronger or weaker? Which areas are in need of immense attention? Etc. for the purpose of answering these type of question, it is important for organization recasting the financial statement in to the percentage terms. The major advantage is that it enables the significant comparison between time periods. There percentages are most likely providing analysts or managers with the fast or rapid way for finding key issues or problems. Additionally, the attention can be paid to certain weakness and strengths through seeing the appropriate changes over the period of time.
After considering the major top problems, the business analysts or managers would then be able maximizing the shareholder’s wealth.
Comparative Is Decision Based Evidence Making Necessarily Bad Analysis
The evaluation of the performance of company is often easier in case of having benchmark or standard performance for the comparison. The suitable benchmark can be found with some problems such as unique attributes problem and averages problem etc. it is not appropriate setting an average as an objective. An upper performance quantile can be the most appropriate performance standard (D’Aveni, 2007)
Operational Is Decision Based Evidence Making Necessarily Bad analysis
The Is Decision Based Evidence Making Necessarily Bad assessment of the operational efficiency in the initial stage as a whole for business or any of the business sub-division is likely performed through a percentage analysis of income statement. Individual expenses or cost items are associating to gross sales revenue adjusted for all allowances and returns. The sales’ common base permitting a ready comparison between key expenses from time to time against industry databases and competitors in the market over longer stretches of time
Cost of goods sold and gross margin analysis: in operational analysis the most commonly used ratios involves the calculation of the cost of sales as a percentage of sales. The ratio depicts that the magnitude of the cost of services provided or cost of good manufactured or purchased in relation to gross profit or gross margin left over for operating profit and expenses. It is noteworthy that the gross margin reflect the relationship of volume, price and cost. A change in the gross margin might derived from the combination of the changes in the product’s selling price, manufacturing cost level for the product and the variation in the business’s product mix.
Contribution analysis: this analysis is mainly used for the internal organization’s management, even though it is increasingly applied in broader analysis of financials, it includes relating sales to the individual product group’sor total business contribution margin. Such type of calculation needs very selective estimate or analysis of the variables and fixed cost or expenses of the company while taking into consideration the operating leverage effect.
Is Decision Based Evidence Making Necessarily Bad Market Indicators
There are two equally important ratios used as indicators of the values of stock market.
the simple relationship between current stock market price and expected or current earnings per share is often quoted by both owners and management. The earnings multiplier ratiois considered as a broad indicator of how the earnings performance and prospects of organization is judged by the stock market. The straightforward calculation related the common share current market price to the most recent available EPS on the yearly basis.
Relative movements in price: targeting for the purpose of creating the shareholder value depends on the relative performance of price. The movement in price are likely expressed in mentioned ratios and absolute dollar terms. While the typical investor shows their greater interest in absolute change in shares value, the insights from the stock performance to the appropriate average and to the market for some industries are supposed to be helpful to assess the company’s particular trend (Rappaport, 2010).
Value drivers: in recent time, the approach that has been significantly gaining the increased recognition is identifying the key elements standing out as vital in shareholders value creation of the specific organization. From the standpoint of owners, the key value drivers may be the growth potential company’s key services and products, key technology capabilities providing the competitive edge, superior process’s cost effectiveness as well as the strategic differentiated positioning. Combining all of these lasting inevitable impact on the expectations of market regarding the cash flow generation and future success of the company.
Value of firm:this is the most common concept recognizing the components of capital structure of an organization debt and equity are tends to be values separately in the market. The formula for calculating the value of firm is showing value of the shares of company is the function of the firm’s total value less debt value (Harms, 2015).
By having a closer look over the matrices used for financial analysis, it is to say that the financial statements holds notable importance because it evaluates the management performance, plans and corporate strategy for future.
In addition, the financial analysis helps companies in making the more informed decisions for the firm. The underlying objective of the financial analysis is organizing the financial statement as well as other accounting data of an organization enabling the comparisons with other companies, also enabling to accurately evaluate raw data. In short, it provides the basis to company’s executive, analysts and manager of making the company profitable in forthcoming years (Helfert, 2017).
The particular section deals with the different ways the problem can be resolved. In particular section, the management/teams develops different options through which the problem can be resolved. Many times these options are already in hand with the management or re-developed from the scratch through strong brain storming.
In typical situation, there are three options that are developed in by the organization to deal with the given problem. The options developed entails and includes the maximum factor that the organization should analyze or achieve, thus offering great value.
While developing The Alternative, the following factor are taken in account, in order to develop the best alternative that may resolve the problem effectively.
These factor includes the consideration of the following:
Is Decision Based Evidence Making Necessarily Bad Cost:
The cost includes if the option proposed is cost effective or can be afforded easily by the company without effecting the overall profitability and other operations of the company. The consideration of cost is important in the alternative generation in order to attain the maximum feasibility with overall business strategy and the budget allocated.
The reliability factor includes if the option developed is successful or has the successful track record in the past or with the pats companies. Such is important to analyze or else it would lead to failure.
The Invulnerability of the option is also analyzed, in order to understand the sustainability of the option if the one part factor is missing so to understand the suitability of the option.
The merit factor, outlines if the option really resolving the issue or aligned with the given situation.
The simplicity factor analyses if the option proposed is easy to implement. Because adopting or proposing an alternative that is difficult to implement or takes a lot of resources with no definite outcomes is vain.
In addition, the compatibility of the option is also analyzed, in order to understand if the given option is aligned and compatible with the procedures of the organization. Such factor analysis is important in order to avoid any resistance implementation and also save the resources and efforts.
Among the above factors, the reversibility factor carries high importance. It is due to the fact that the organization needs to analyze exact factor in terms of its reversibility to see, if the process can be reversed, if the option fails to offer the respective results.
The ability of the option is considered while the alternative generation process, so gauge if the option will remains table, if the given situation and markets changes. And will it make the organization sustained in the changing market situation.
The robustness of the option also needs to be analyzed. It is due to the fact that such analysis allow the organization to see, if the option will remain strong in future or not.
Apart from this while developing the option, it is important to consider the realistic nature of the option. The option has to be realistic and should have imperative results on the organization. The realistic and SMART nature of the option is important to be considered and developed, so it offer maximum value and also resolves the problem effectively.
Lastly, while developing the options/alternatives, it is important to consider the nonrealistic factors that may make the alternatives complicated, leading to poor implementation, time consumption and other related issues. Hence, it is suggested, that while developing the alternatives, it is important to consider the realistic and smart nature of options along with the avoidance of developing such issues that are not offering the right solution or the suggesting such options that are of no use to the organization.
Is Decision Based Evidence Making Necessarily Bad Evaluation of Alternatives
Alternative are the different ways of achieving a same end goal through two or more different methods. It is not a close substitute of a first define choice or other alternatives or must provide the solution of the problem in a particular way. For instance, lower price, special offer, and money back guarantee etc. are all the different ways for achieving the same objective that increased sales. Alternatives are generally mutually exclusive in a way that if we combine two or more alternatives together it will eventually create a new alternative.
They are the Is Decision Based Evidence Making Necessarily Bad technical and economically ways through which the project can be carried out feasibly. It is encouraged to be consider especially for a projects that are large and complex in nature
Under the evaluation of alternatives the pros and cons of the alternatives developed above are gauged based on the benefits they offer to the organization and also the strengths the carry that may help the oragnation in overcoming the problem. In addition to this, the disadvantages of the alternatives entails the costs that are associated with implanting the option, and thus required to be considered before the implementation process, in order to avoid any mishap in future or during the implementation.
Under the Cost/benefit analysis of the alternatives, different factors such as cots, competitive edge, market share, financial feasibility and human resource required are considered to be the major factors of implementation. In addition to this, the careful and deep consideration is given to the political, economic, social and other porter 5 forces and pestel model so to understand the alignment of right alternative with maximum value and weightage in resolving the problem.
Moreover, under the particular section, the decision criteria is also developed. The particular decision criteria incorporates all the factors that the company aims to archives. Such factors may include sales, profitability competitive edge, market share and other. Once it is done, each alternate is compared against each other and with the decision criteria develop, and are given different weigtage. These weigtage are given based on most favorable to least favorable, and the option with most rating s ultimately selected.
Also, during the evaluation process, the financial feasibility of the organization is also considered and the drawbacks/weaknesses of the organization. This is important as it allows the organization in meeting the ultimate goals and addressing the problem effectively.
Lastly, while doing the evaluation of Is Decision Based Evidence Making Necessarily Bad alternatives, it is important to quantify the options through different techniques. Though in many cases, it is difficult to analyze the feasibility of the options especially the intangible factor, however, quantifying the maximum option is important, in order to develop a clear image and understanding of option that will address the problem.
Also, while selecting a particular course of action/alternative, it is important to ask” whether the option will resolve the problem directly, or will an additional efforts will be required to address the problem. In Addition it is also needed to be considered, if the given option or the alternatives have the right alignment with the organization and re offering value.
Perhaps, it is important to involve other members to take the active feedback on the alternatives, in order to gauge the value of the alternatives and the value it may offer to the organization in the long-term. The open discussion and review from past enables to see more clear picture of the ultimate outcomes, leading to better implementation and selection of the right alternative.
Is Decision Based Evidence Making Necessarily Bad – Recommendation
Once the options are developed and evaluated, the recommendation is made, on the basis of the best suited option that offers the maximum value to the company and address the problem succinctly. The recommendation is mad in away, that not only offers the solution the problem, but also depicts the implementation process and the course of action that the organization needs to take in order to be successful.
A strong Is Decision Based Evidence Making Necessarily Bad recommendation must cover the key areas as how the organization will implement the alternatives, what benefits will it receive if it implement the when alternatives and what could be the cost, that he organization will need to overcome or address, in order to effectively implement the alternatives.
In addition to this, once the alternative is selected, the recommendation needs to entail what change it will bring to the organization like the 20 % increase in the Is Decision Based Evidence Making Necessarily Bad sales or profits or the sustainability or increases in market share. These factors are important to be mentioned in the recommendation, in order to make itr strong and firm and allow the stakeholders/reader to connect the problem and solution, leading to better understanding.
Moreover, the recommendation also needs to entail the plan B, that if for instance the results are not generated as per the plan, the second set of recommendation must be incorporated in the plan, in order to allow the organization to quickly shift to the plan B, in order to avoid the losses and sustain the presence of the company in the market.
Lastly, under the recommendation, it is important to incorporate the finding from the past, so to make the given Solution more acceptable. A good recommendation is that, incorporates the findings from the past. This is important, as it allows the reader and stakeholders to understand the proven facts, and the pasts results such recommendation has harvested, leading to more acceptability and also the determination of the plan that may be in need to be adopted so to avoid the delays and resistance in the organization, while implementing the change.
Infact, the set of recommendation offered should also have a contingency plan, and the other course of action for plan A and B both. This makes recommendation more firma and acceptable.
All in all, the recommendation include, what, why, how and whom factors. Thus is important as to allow the organization. Shareholders to clearly understand what is required to done, how it is required to do, who are the key player and how it will be implemented. In addition time required has to be mentioned. This allows the stakeholder to understand and determine the time and resources required to implement the plan effectively (Turner, 2012).