Strategic Profitability Analysis and Pricing

BUS401E Strategic Profitability Analysis and Pricing

Spring 2020

  • Topics

    The course can be divided into two main parts.

    Part 1: Strategic Analysis. This part begins with an assessment of the industry, relevant markets and a company's competitive position as a framework for assessing the company's profitability. Then the focus is on different methods for optimal pricing.

    Part 2: Revenue and cost analysis. Part two focuses on estimating and using cost information, customer profitability analysis, and data analytics. This involves calculating the profitability of products, activities, customers and product attributes. The design and use of ABC is central, as well as the handling of capacity and capital costs. Another key element is to interpret, understand, and use digitized pricing and cost data. Furthermore, this is linked to examples from practice. The course concludes with topics that intersects with strategic analysis and revenue and cost analysis. This will demonstrate how the two parts of the course are connected.

  • Learning outcome

    After completing the course, students will:

    Knowledge

    - Be able to prepare calculations for different purposes and assess to what extent they give a correct picture of profitability. 

    - Be able to analyse the profitability of various activities, products, product characteristics, customers and market segments. 

    - Know how these analyses can be used in different business decision-making situations. 

    - Understand the assumptions behind OLS regressions as well as the differences between causality and correlation. 

    - Know about studies of how companies set prices in practice. 

    - Understand basic economic theory about optimal pricing. 

    - Be able to analyse the competitive position and related factors that affect the company's price adjustment. 

    - Know about how profitability analysis can be used in various business decision-making situations. 

    Skills

    - Be able to prepare calculations for different purposes and assess to what extent they give a correct picture of profitability. 

    - Be able to analyse the profitability of various activities, products, product characteristics, customers and market segments. 

    - Be able to apply methods for setting or adjusting price based on: the inverse elasticity rule and regression analysis of attributes. 

    - Be able to use econometric insight into discussions of data analysis.

    General competence

    - Have acquired a knowledge of and the ability to reflect upon and take into consideration issues relating to management accounting and pricing techniques.

    - Be able to communicate important concepts and problems in writing and presentation, as well as through other relevant forms of communication.

  • Teaching

    Lectures and exercises.

  • Credit reduction due to overlap

    BUS401 is identical to MRR415 (expired code).

    The course cannot be combined with the course BUS401N Strategiske lønnsomhetsanalyser og prising, which is a very similar course in Norwegian.

  • Requirements for course approval

    Two approved group assignments. Each group assignment consists of a written submission and an evaluation of another group's submission.

    Course approval in BUS401 is valid for BUS401E.

  • Assessment

    Due to the ongoing Corona pandemic, the assessment for the spring semester 2020 has been changed:

    Individual home exam. Length of exam TBA.

    Exam dates have not been changed.

     

    Original assessment form spring 2020 – cancelled:

    Final exam consisting of a 4-hour written school exam.

     

    Course approval in BUS401 is valid for BUS401E.

  • Grading Scale

    Grading scale spring 2020:

    Pass/fail.

    (Originally planned A-F)

  • Computer tools

    Some use of standard computer tools in connection with exercises.

  • Literature

    A collection of articles and book chapters, as well as various case material on Canvas.

Overview

ECTS Credits
7.5
Teaching language
English
Semester

Spring semester. Offered spring 2020.

The version in Norwegian language, BUS401N will be given in the autumn semester.

Course responsible

Daniel Johanson, Associate professor, Department of accounting, auditing, and law, NHH