When we wish to assess the performance of a business, we’re looking for ways to measure the financial and economic consequences of past management decisions that shaped investments, operations, and financing over time. The important questions to be answered are whether all resources were used effectively, whether the profitability of the business met or even exceeded expectations, and whether financing choices were made prudently. Shareholder value creation ultimately re- quires positive results in all these areas which will bring about favorable cash flow patterns exceeding the company’s cost of capital.

As we’ll see, there is a wide range of choices among many individual ratios and measures, some purely financial and some economic. No one ratio or measure can be considered predominant. We’ll demonstrate primarily the analysis of business performance based on published financial statements. These represent the most common data source available for the purpose, even though they are not designed to reflect economic results and conditions. We’ll also discuss the more important measures that help assess economic performance aspects. Our focus will be on key relationships and indicators that allow the analyst to assess past performance and also to project assumed future results. We’ll point out their meaning as well as the limitations inherent in them. In the final we’ll discuss the larger context of valuing a company or its parts in economic terms, a process that is based on an intense assessment of performance drivers and strategic positioning, and that requires developing expected cash flow results for which past performance is only a starting point.

Ratio Analysis and Performance

Because there are so many tools for doing performance assessment, we must re- member that different techniques address measurement in very specific and often narrowly defined ways. One can be tempted to “run all the numbers,” particularly given the speed and ease of computer spreadsheets. Yet normally, only a few selected relationships will yield information the analyst really needs for useful insights and decision support. By definition, a ratio can relate any magnitude to any other; the choices are limited only by the imagination. To be useful, both the meaning and the limitations of the ratio chosen have to be understood. Before be- ginning any task, therefore, the analyst must define the following elements:

• The viewpoint taken.
• The objectives of the analysis.
• The potential standards of comparison.

Any particular ratio or measure is useful only in relation to the viewpoint taken and the specific objectives of the analysis. When there is such a match, the measure can become a standard for comparison. Moreover, ratios are not absolute criteria: They serve best when used in selected combinations to point out changes in financial conditions or operating performance over several periods and as com- pared to similar businesses. Ratios help illustrate the trends and patterns of such changes, which, in turn, might indicate to the analyst the risks and opportunities for the business under review.

A further caution: Performance assessment via financial statement analysis is based on past data and conditions from which it might be difficult to extrapolate future expectations. Yet, any decisions to be made as a result of such performance assessment can affect only the future—the past is gone, or sunk, as an economist would call it.

No attempt to assess business performance can provide firm answers. Any insights gained will be relative, because business and operating conditions vary so much from company to company and industry to industry. Comparisons and standards based on past performance are especially difficult to interpret in large, multi business companies and conglomerates, where specific information by individual lines of business is normally limited. Accounting adjustments of various types present further complications. To deal with all these aspects in detail is far beyond the scope of this book, although we’ll point out the key items. The reader should strive to become aware of these issues and always be cautious in using financial data.

To provide a coherent structure for the many ratios and measures involved, the discussion will be built around three major viewpoints of financial performance analysis. While there are many different individuals and groups interested in the success or failure of a given business, the most important are:

• Managers.
• Owners (investors).
• Lenders and creditors.

Closest to the business on a day-to-day basis, but also responsible for its long-range performance, is the management of the organization, whether its members are professional managers or owner/managers. Managers are responsible and accountable for operating efficiency, the effective deployment of capital, useful human effort, appropriate use of other resources, and current and long-term results—all within the context of sound business strategies.

Next are the various owners of the business, who are especially interested in the current and long-term returns on their equity investment. They usually expect growing earnings, cash flows, and dividends, which in combination will bring about growth in the economic value of their “stake.” They are affected by the way a company’s earnings are used and distributed, and by the relative value of their shares within the general movement of the security markets.

Finally, there are the providers of “other people’s money,” lenders and creditors who extend funds to the business for various lengths of time. They are mainly concerned about the company’s liquidity and cash flows that affect its ability to make the interest payments due them and eventually to repay the principal. They’ll also be concerned about the degree of financial leverage employed, and the availability of specific residual asset values that will give them a margin of protection against their risk.

Other groups such as employees, government, and society have, of course, specific objectives of their own—the business’ ability to pay wages, the stability of employment, the reliability of tax payments, and the financial wherewithal to meet various social and environmental obligations. Financial performance indica- tors are useful to these groups in combination with a variety of other data.

The principal financial performance areas of interest to management, owners, and lenders are shown in Figure below , along with the most common ratios and measures relevant to these areas. We’ll follow the sequence shown in the figure and discuss each subgrouping within the three broad viewpoints. Later, we’ll re- late the key measures to each other in a systems context.

Management’s Point of View

Management has a dual interest in the analysis of financial performance:

• To assess the efficiency and profitability of operations.
• To judge how effectively the resources of the business are being used.

The Financial Markets and Innovation in Productivity of Economy in Tanzania

Analysis for Business Strategy and Business Management Decisions

TICGL- Planning for Monitoring and Evaluation tools

Baseline surveys are an important part of any M&E process.  This discussion, takes a look at the definition of a baseline study, its importance, when to conduct one and alternatives when there is no baseline. It also includes other considerations to make when conducting a baseline study.

What is a baseline study?

A baseline study simply put is a study that is done at the beginning of a project to establish the current status of a population before a project is rolled out. The Food and Agricultural Organization defines a baseline study as:

“a descriptive cross-sectional survey that mostly provides quantitative information on the current status of a particular situation – on whatever study topic – in a given population. It aims at quantifying the distribution of certain variables in a study population at one point in time.”

While most people confuse a baseline study and a pilot study, these two are not synonymous. A pilot study, unlike a baseline study attempts to establish whether it is feasible or worthwhile to undertake a project. In which case, pilot studies are undertaken so as to establish or verify a project idea. A baseline study on the other hand is done after a decision to implement a project has been made. In other words, pilot studies are conducted to identify project ideas, while baseline studies are done to act as a benchmark for measuring project success or failure.

Importance of Baseline studies

Baselines surveys are important for any project for the following reasons:

1. It is a starting point for a project: One important, and recommended, way of starting a project is to carry out a baseline study. Through its results, a baseline serves as a benchmark for all future activities, where project managers can refer to for the purposes of making project management decisions.
2. Establishing priority areas/planning: Baseline studies are important in establishing priority areas for a project. This is especially true when a project has several objectives. The results of a baseline study can show some aspects of a project need more focus than other while others may only need to be given little focus. Take for example a project on HIV and AIDS in Dhaka. A baseline study may show that while there is generally high public information on awareness of risk and prevention strategies, these strategies are either non-existent or inaccessible. In this case, project output would focus more on improving access to prevention strategies and little on doing media campaigns and community mobilization.
3. Attribution: Without a baseline, it is not possible to know the impact of a project. A baseline study serves the purpose of informing decision makers what impact the project has had on the target community. Accordingly, along with other strategies such as use of  control group it also helps in attributing change in the target population to the project.
4. Baseline tools are used for evaluation: the tools used during a baseline study are normally the same tools used during evaluation. This is important for ensuring that management compares “apples to apples”. As such, conducting a baseline means that time and other resources for designing evaluation tools are minimized or even eliminated altogether.
5. Donor requirement: In most cases, it is a donor requirement that a baseline study is carried out as part of the program process. Since M&E is integral for any donor to establish future project success, they might, and always do compel implementing organizations to carry out baseline studies.

When should baseline surveys be carried out?

Just like the name suggests, baseline surveys should be carried out at the very beginning of a project and for obvious reasons. Any manager wants to ensure that any possible impact of a project is captured at the evaluation. Where a baseline study is conducted after project activities have already been initiated, the accurate picture of the initial status cannot be reflected since the project is already having some impact, however little. It is therefore always best practice to conduct a baseline before project implementation.

Alternatives for baseline studies

If there is still a long way to go for the project and a baseline wasn’t conducted, managers can always consider conducting a study to act as a baseline. However, if at the end of a project there was no baseline study conducted, there are a few alternatives to consider  for the purpose of measuring project success.

1. Using previous studies as a baseline: Several studies are conducted by different agencies including national surveys and sectorial surveys. Managers can always consider surveys that were conducted by other organizations at the project inception as baseline studies. For example, national HIV and AIDS surveys can act as baseline data and compared to end of evaluation results.
2. Selecting a homogeneous group to act as a control group: Another alternative is to identify a group with homogeneous characteristics to the project target population and conduct a study on the two groups. The selected group then acts as a comparison group to measure success. The disadvantage of this strategy is that true homogeneity is usually very difficult to establish. As a matter of fact, it usually almost never exists.

Other things to consider when conducting baseline studies

1. Indicators: Before conducting a baseline study, it is important to identify the indicators  for the project. The indicators help in the designing of the questionnaire and also in determining evaluation indicators. The type of indicators could also dictate the type of data to collect and how the analysis of the data will be done.

2. Study population and sampling: The study population is most often the project target population. Establishing the boundary so as to ensure the sample is only limited to the target population is important. Also related is the sampling procedure. The most common one is the simple random sampling. However, sometimes this is not possible because of various reasons, which might mean that a different sampling procedure is considered.

3. Partners: In some cases, it could necessary to involve other organizations in the baseline survey. This is especially viable if “similar” projects share a starting timeline and share a target group, most often by projects sharing a donor. This normally saves costs an increases confidence in the baseline results.

4. Funds: Availability of funds will dictate the intensity and scope of the baseline study. More funds might also mean that both quantitative and qualitative methods are adopted, while limited funds might imply that an organization only goes for quantitative methods.

What is market research?

When boiled down to its essence, market research helps you better understand who your customers are and why they might want to buy your product or service.

Let’s put it another way: If you’re a writer, one of the first things you should know it who you’re talking to. Who is your audience? And what are you trying to tell them? Well, the same concept applies to market research for businesses.

Using both primary (talking to customers) and secondary (info on your customers from other sources) research, businesses gather data to answer the following crucial questions:

• Who are your customers? Not only do you need to learn their basic demographics (age, gender, ethnicity, geographic location), but also other info like their average income, educational level, and lifestyle. Getting a peek at their lives (and inside their heads) can help businesses better communicate with and sell to customers.
• What problem do customers have? What is the need your product or service will meet for your customers? What problem are you trying to solve for them? Understanding your customers’ motivation here can help you clearly define your value proposition.
• What are customers currently buying to meet that need? When it comes to your specific industry or niche, take a look at what solutions are resonating with your customers right now. This can give you some in-depth info on potential competitors.
• How can you get customers to buy from you instead? How can you encourage your target customers to buy your product instead of your competitors’? What will motivate customers to switch? And how can you differentiate yourself and/or your product?

Market research can encompass everything from customer surveys to interviews to industry reports and even some agencies that will sell you credit reports on competing companies (no, we don’t recommend you buy those). Because of the depth and potential impact of all this data, solid market research is expensive—Fortune 500 companies happily spend many thousands of dollars on a robust market research report.

As a small business owner, that kind of cost can be prohibitive. But even if you don’t have wads of cash lying around, you can compile market research without busting your budget. And we’ll walk you through some ways to get started.

How to do your own market research

Putting together your plan

Before diving into doing your actual research, you’ll need to set aside some time to create a plan. One piece of market research can’t be everything to everyone in a company, especially when you have a limited budget. To help stretch your dollars further, spend some time honing your focus with these steps:

• Figure out what you need to know about your market. Define your market (your industry, niche, etc.) and specifics on what you want to find out. If you just want data on your ideal customer, great—hone in on collecting that information. But you can do an in-depth competitive analysis or analyze your industry as well (think trends, threats, revenue data, and potential growth). Prioritize the information that’s most valuable to your business, and focus your efforts on that.
• Gather resources for your research: Not every kind of primary or secondary research makes sense for every small business. If you’re a newbie business and have no customers yet, then it won’t do much good to try to do customer interviews. And don’t worry—we’ll share some low-cost resource options below.
• Set a budget: Once you know what resources you’ll use and have outlined the goal for your research, estimate how much it’ll cost. Be reasonable and realistic—you won’t be able to get through this process without spending a little something.

Primary research

Now, let’s get to the meat of market research. As I mentioned earlier, there are two types of market research: primary and secondary.

Primary research is brand, spanking new information. It doesn’t currently exist anywhere else, and you get it straight from the source: your target customers. Primary research is meant to help business owners get direct answers to their burning questions, like defining customer product preferences, understanding their motivations, and getting a sense of their needs.

Some common types of primary research include:

• Online surveys: Using a tool like survey Monkey create and distribute a survey to ideal customers in your target market. But before blasting out any emails, ensure that you’re compliant with anti-spam laws.
• Customer interviews: Asking customers questions either in person or over the phone.
• Focus groups: Create a small sample of your ideal customers, gather them together, and have a mediator facilitate a discussion.
• Direct mail: Don’t discount the power of snail mail! Send a paper survey to a sampling of your ideal customers. While direct mail surveys can help curb researcher bias, the response rate is usually low and responses take a while to reach you. But direct mail is a great avenue if your customers belong to an older demographic or you’re worried about spam email standards. Also, direct mail works: 42% read or scan direct mail pieces.

Digging into primary research might take you outside your comfort zone. You might shy away from asking customers lengthy questions to avoid annoying them. Or maybe you’ll fret over taking too much of their time. But trust me: the long-term impact of a rigorous market research report is worth the discomfort.

When designing your survey questions, follow a few basic rules of thumb:

• Keep questions short and simple. The longer the question, the more likely it is to confuse your customers.
• Go from general questions to more specific ones.
• Make sure your survey is easy to read and has a clean design.
• Don’t use ambiguous words or leading questions.
• Offer different ways to respond based on the question. It could be true or false, multiple choice, a response scale (like stars or numbers 1 to 5), or comment boxes to elaborate.
• Send your survey to friends/colleagues first. Fresh eyes can spot potential problems and errors.

Secondary research

While primary research offers a more detailed view of customer needs and competitor profiles, secondary research offers a bigger-picture analysis.

As I mentioned before, secondary research uses resources that already exist. That could mean digging through government demographic data, industry reports, or pricing guides for data that can guide your research.

Some resources you can use for secondary research include:

• Demographic data: Look up specific demographic data from government entities for valuable insights to inform ideal customer profiles.
• Industry/sector data: Get a sense of how your specific industry is performing using Also check out information from your specific trade association and trade publications for specific industry info.
• Competitors: Don’t forget to check out competing companies! Look up other businesses that are relatively the same size, offering similar products/services, in your geographic area, and/or that are serving the same customers. What can you learn from them? Where do they succeed or fall short? Are there gaps in their offerings that you can fill with your products/services?
• Local library: It might sound old-fashioned, but your local library will likely have great reference materials on your market and industry.
• Sales data: If you’re an existing business, don’t neglect your own internal data. Examine invoices, sales receipts, revenue reports, and other relevant data to determine trends, popularity of certain goods/services, and the impact of specific advertising/marketing campaigns.

Additional resources

If you’re still digging for more information (or maybe just a helping hand), there are a variety of other resources to use to inform your research:

•  A repository of press releases for the general media. Search by industry to find current events, data, and research affecting your chosen market.
•  Access resources to help you conduct your research, write a business plan, calculate your business costs, and more
• Access free market research services, secondary research resources, sample business plans, and more.

Moving forward with your own market research

No matter what kind of small business you’re running, it’s crucial to know everything you can about your customers. Knowing how your product or service meets a specific need—and then figuring out how to communicate that effectively—can make the difference between success and failure.

And now that you have a better grasp on the fundamentals of market research, you can start designing your own plan to better understand both your target customers and your competitors.

Market Development Strategy- Godfather Strategy

Assessment on Social-Economic impacts of COVID-19 to Tanzania Economy 2020

Increasingly stringent containment measures needed to slow the spread of the Coronavirus (Covid-19) will necessarily lead to significant short-term declines in GDP for many major economies.

Estimations showing that the lockdown will directly affect sectors amounting to up to one third of GDP in the major economies. For each month of containment, there will be a loss of 2 percentage points in annual GDP growth. The tourism sector alone faces an output decrease as high as 70%.  Many economies will fall into recession. This is unavoidable, as we need to continue fighting the pandemic, while at the same time putting all the efforts to be able to restore economic normality as fast as possible.

‌“The high costs that public health measures are imposing today are necessary to avoid much more tragic consequences and even worse impact on our economies tomorrow,”Mr Gurría said. “Millions of deaths and collapsed health care systems will decimate us financially and as a society, so slowing this epidemic and saving human lives must be governments’ first priority.

“Our analysis further underpins the need for sharper action to absorb the shock, and a more coordinated response by governments to maintain a lifeline to people and a private sector that will emerge in a very fragile state when the health crisis is past.”

To “inoculate” economies to current and future shocks, Leaders should act immediately, to:  

• Recapitalise health and epidemiological systems;
• Mobilise all macroeconomic levers: monetary, fiscal, and structural policies;
• Lift existing trade restrictions especially on much needed medical supplies;  
• Provide support to vulnerable developing and low income countries; 
• Share and implement best practices to support workers and all individuals, employed and unemployed – particularly the most vulnerable;
• Keep businesses afloat, particularly small and medium-sized firms, with special support packages in hardest hit sectors such as tourism.

In all economies, the majority of this impact comes from the hit to output in retail and wholesale trade, and in professional and real estate services. There are notable cross-country differences in some sectors, with closures of transport manufacturing relatively important in some countries, while the decline in tourist and leisure activities is relatively important in others.

The impact effect of business closures could result in reductions of 15% or more in the level of output throughout the advanced economies and major emerging-market economies. In the median economy, output would decline by 25%.

Variations in the impact effect across economies reflect differences in the composition of output. Many countries in which tourism is relatively important could potentially be affected more severely by shutdowns and limitations on travel. At the other extreme, countries with relatively sizeable agricultural and mining sectors, including oil production, may experience smaller initial effects from containment measures, although output will be subsequently hit by reduced global commodity demand. 

By definition, business analysis is the discipline of recognizing business needs and findings solutions to various business problems. In simpler words, it is a set of tasks and techniques which work as a connection between stakeholders. These help them understand organization’s structure, policies, and operations. They can also recommend solutions to help the business reach its goals.

Business analysis is about understanding how your organization functions to fulfill its purposes. It entails defining the abilities the firm needs to provide products to the external stakeholders. You will have to understand how the organizational goals connect to specific objectives. You will also have to make a detailed plan to help achieve the goals and objectives. In your business analysis, you will define how the stakeholders and different organizational units interact.

It is the Business analysts’ task to analyze and synthesize information provided by the immense group of people who interact with the firm. Customers, executives, staff and IT professionals send this information. The analysts do not only focus on the expressed desires but elicit the actual needs of stakeholders. The analyst facilitates communication between organizational units sometimes.

Below are 8 steps business analysts generally follow.  Each of the steps is important for business analysis.

1. Get oriented

People expect business analysts to start contributing to projects as quickly as possible and make a positive impact. Sometimes, they get involved while the project is ongoing. It is essential to grant them some time to get oriented. They clarify the scope, requirements and business objectives. They spend some time to collect some basic information.

The following are the main responsibilities they have in this step:

• Clarifying your role as the business analyst.
• Determining who the primary stakeholders are.
• Having a clear understanding of the project history.
• Understanding the existing system and processes.

2. Identify the primary objectives of the business

Most business analysts start by defining the scope. This can cause problems. It is more effective to understand the business needs before defining the scope of the project.

Your responsibilities they have in this step are:

• Discovering primary stakeholders’ expectations.
• Merging conflicting expectations. Your business community begins the project a shared understanding of the objectives.
• Making sure that the business objectives are clear and attainable.
• Ensuring that the business objectives set the stage for defining a scope.

3. Define the Scope

Define a clear and complete statement as scope. It will serve as a go-forward concept and help the team realize what the business needs. Remember, scope is not an implementation plan. It merely guides all the steps of the business analysis process.

In this step, the business analysts’ main responsibilities are:

• Defining a solution method to find the nature and extent of technology and process changes which should be made.
• Drafting a clear scope statement. Reviewing it with the stakeholders.
• Confirming the business case

4. Create your business analysis plan

The business analysis plan will provide clarity to the process of business analysis. The plan will answer several questions.

The vital responsibilities involved with creating a business analysis plan are:

• Choosing the most appropriate types of business analysis deliverables.
• Defining the specific list of deliverables for business analysis. It should cover the scope completely and identify the stakeholders.
• Finding the timelines for finishing the business analysis deliverables.

5. Define the requirements in details

Clear and actionable detailed requirements are important. Detailed requirements provide the implementation team with the information they need to devise the solution. The most important responsibilities are:

• Collecting the information needed
• Analyzing the information and using it to make a first draft
• Reviewing and validating the deliverables
• Asking questions to fill the gaps.

6. Supporting the technical implementation

The technical implementation team builds, customizes and deploys software on a typical project. During this process, the key duties of the business analysts are:

• Reviewing the final solution design.
• Updating and repackaging requirements documentation.
• Working with the quality assurance professionals and making sure that they understand the importance of technical requirements.
• Being ready to answer questions and help solve certain problems.
• Managing requirements changes.
• Leading user acceptance testing efforts when possible.

7. Help the firm apply the solution

Sometimes a business cannot use the solutions aptly. As a result, it will be difficult to attain the original objectives. The business analyst should be involved in this final step to support the business. The aim of this step is to ensure that all members are prepared to accept the changes.

The business analysts’ main responsibilities for this step are:

• Analyzing and developing interim business process documentation. These documents state exactly what changes to the business process should be made.
• Training the end users. They must understand all the process and procedural changes. The analyst can also collaborate with training staff.
• Working with the business users

8. Study the value created by solution

Throughout business analysis process, a lot of steps are involved. Business outcomes and details are discussed. Big and small problems are solved. Relationships are built, and changes are managed. Try not to lose track amid the steps. Stop and assess the value created by the solution.

The key responsibilities involved in this step are:

• Evaluating the actual progress.
• Conveying the results to the project sponsor. Communicating the results to the Project team and other members of the company is also essential in some cases.
• Proposing follow-up projects.