What is Business Analysis?


The importance of business analysis is in realization of profit, avoidance of cost, identification of new opportunities, understanding of necessary capabilities and modeling the organization. Through the effective use of business analysis, we can ensure an organization realizes these benefits, ultimately improving the way they do business. You need to understand how the organizational goals attach to explicit objectives. Also you will have to create a detailed plan to help complete the goals and objectives. In your business analysis, you will define how the stakeholders and different organizational units interact.

  • Business analysts analyze information provided by the immense group of people who interact with the company. Business analysts work across all levels of an organization and may be involved in everything from defining strategy, to creating the enterprise architecture, to taking a leadership role by defining the goals and requirements for programs and projects or supporting continuous improvement in its technology and processes.


Types of strategies in business

Company business strategy can be defined as a high level plan for reaching specific business objectives. She explain how a company differentiates itself from competitors, how it generates revenues, and where it earns margins.Typically a business strategy will cover a period of about 3-5 years. Companies often use business-level strategies to provide guidelines for owners, managers and employees to follow when working in the business. A lot of different strategies and business models are possible, even for companies in the same industry selling similar products or services. Four types of business strategies include the growth, product differentiation, price skimming and acquisition strategy.

Growth strategies involve introducing new products to the market, or adding new features onto an already existing product. Sometimes, a company may be forced to change or increase its product line to keep up with competitors. For example, cell phone companies are always adding new characteristics or discovering new technology. Cell phone companies that do not sustain with consumer require will not keep on in business very long.

Product differentiation is a business strategy in which companies will use a key performance factor to set themselves apart from their competition. Using a product differentiation strategy can help to build brand loyalty.Companies implement a differentiation strategy to provide customer value by offering products with unique features. A company may separate its products from those of its competitors by offering products of exceptional quality or with advanced technical features.

A price-skimming strategy involve charging high prices for a product, mostly for the period of the starting phase. A company will use a price-skimming strategy to quickly recover its production and advertising costs. There are several disadvantages associated with price-skimming, though. The first is that the product or service needs to be incredibly unique to justify the sky-high prices. The second one disadvantage of a price-skimming is that the high margins tend to attract competitors very quickly..

An acquisition strategy entails purchasing another company and either merging it with your existing company or running it separately. A company with extra capital can use an acquisition strategy to increase a competitive advantage.

Business Planing

Business plan

Business plans are an important business start-up step for many small business owners, especially those who are pitching their business ideas to investors or credit institutions for funding. For the reason that the vastness of information to be included, business plans can also be one of the mainly overwhelming parts of starting a business. A standard business plan consists of a single document divided into several sections, including a description of the organization, the market research, competitive analysis, sales strategies, capital and labor requirements, and financial data. Business plans are essentially strategic. You begin here, now, with certain capital and abilities. You want to get to a there, a point in the future at which time your business will have a different set of resources and abilities as well as greater profitability and increased assets. Your plan shows how you will get from here to there.


Profitability of business

Profitability is the ability of a business to earn a profit. A profit is what is left of the revenue a business generates after it pays all expenses directly related to the generation of the revenue, such as producing a product, and other expenses related to the conduct of the business activities. Every firm is most concerned with its profitability. One of the most frequently used tools of financial ratio analysis is profitability ratios, which are used to determine the company’s bottom line and its return to its investors. Profitability ratios show a company’s overall efficiency and performance. There are two ways to measure your company’s profits:

  •  Margin ratios
  •  Return on assets and on investment

Ratios that show margins represent the firm’s ability to translate sales dollars into profits at various stages of measurement. Ratios which explain returns characterize the company’s talent to calculate the general efficiency of the company in generating profits for its shareholders.


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