Strategic Profitability Analysis and Pricing

BUS401E Strategic Profitability Analysis and Pricing

Autumn 2020

  • Topics

    This is a course about accounting, from mainly a decision-making perspective (management accounting). The course begins with frameworks for assessing a company's profitability in the setting of the industry, the relevant markets and the company's competitive position. Then the course goes in-depth into different methods for costing and pricing. Central in the course is the estimation and use of cost information, revenue information, and data analytics. This involves calculating the profitability of products, activities, customers and product attributes. The design and use of Activity-based costing (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. Other management accounting techniques covered in the course are for example Customer profitability analysis, Pricing, Target costing, and Benchmarking.  

  • 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. 

    - 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

    The course is given exclusively online. 

    There will be no regular class-room meetings. More information about digital platforms (e.g. Zoom) used will be published on Canvas.

    Teaching material will include pre-recorded videos, online webinars, assignments, and on-line case discussions. 

  • Credit reduction due to overlap

    BUS401E and BUS401N is identical to BUS401 and MRR415 (expired codes).

    The course cannot be combined with the course BUS401N.

  • 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 (expired) and BUS401N is valid for BUS401E.

  • Assessment

    Final exam consisting of a 5-hour written digital home exam.

     

    Course approval in BUS401N is valid for BUS401E.

  • Grading Scale

    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

Autumn. Offered Autumn 2020.

Course responsible

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