Strategic Profitability Analysis

BUS401E Strategic Profitability Analysis

Spring 2023

Autumn 2023
  • Topics

    This course is about managerial decision-making. Business managers are increasingly expected to identify problems, acquire and analyze relevant information, and critically assess the implications of decisions. In this course, we learn to both apply and evaluate theories for measuring and evaluating firms' profitability given their strategic positioning. The course goes in-depth into methods for costing and pricing. For cost analyses, we focus on estimating relevant costs where the design and use of activity-based costing (ABC) systems are central, as well as the handling of capacity and capital costs. For pricing analyses, we discuss different approaches to strategic pricing (cost-based, customer-based, and market-based) and view these in light of new technological innovations. Throughout the course, we discuss the human factor and insights from behavioral research relevant to managerial decision-making.

  • Learning outcome

    Upon successful completion the student:


    • Understands what frameworks and analyses are appropriate for different purposes and assess to what extent they give a correct picture of profitability
    • Knows how different accounting analyses can be used in different managerial decision-making settings
    • Understands the differences between different approaches to strategic pricing
    • Knows how to interpret and use pricing and costing information
    • Has insight into psychological factors that affect the decision-making process in organizations.
    • Understands the role of morality in managerial decision-making


    • Is able to conduct volume-based, activity-based, and resource-based cost estimations for different purposes and assess to what extent they give a correct picture of profitability.
    • Is able to analyze the profitability of various activities, products, product characteristics, customers, and market segments.
    • Can apply methods for setting or adjusting prices based on the inverse elasticity rule and regression analysis.
    • Can relate econometric and behavioral insights into various decision settings.

  • Teaching

    In the fall semester, NHH is returning to physical lectures. The purpose of the lectures in BUS401E is to stimulate reflection and interaction on the subject matter. To facilitate such a learning environment, lectures will not be recorded. Students are, however, provided with pre-recordings of the more technical issues and videos summarizing each of the major topics of the course.

  • Credit reduction due to overlap

    The course cannot be combined with the course BUS401N.

  • Compulsory Activity

    Two approved course assignments.

    Compulsory activities (work requirements) in BUS401N is valid for BUS401E.

  • Assessment

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

  • Grading Scale


  • Computer tools

    Some use of standard computer tools (e.g., Excel and Stata/R).

  • Literature

    To be announced on Canvas


ECTS Credits
Teaching language

Autumn. Offered autumn 2022.

Course responsible

Joel W. Berge, Assistant Professor, Department of Accounting, Auditing, and Law, NHH