Making Strategic Decisions - Part 3

Strategic Marketing Management

A written report
presented to
the Faculty of the College of Business Administration
Immaculada Concepcion College

In Fulfillment
of the group report for the Subject
Strategic Management ( CBMEC 1)

By 3C MM - GROUP 6:
Espinosa, Rhondee Rose
Tahup, Kristine Joy
Tayoto , Rachel
Nicanor, Alliah Mae
Andrade, Leomel
Tahup, Mary Jane
De Arroz, Khen

Submitted to:
Mrs. Joys Ann Bolasoc
ESPINOSA

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Financial Risk Management is the process of identifying, assessing, and addressing risks
that could harm a company's financial health. These risks may come from market
changes, credit defaults, or unexpected events like economic crises. The goal is to
minimize financial losses and ensure stability through strategies such as diversification,
hedging, and strict credit policies. By managing risks effectively, businesses protect their
assets, maintain continuity, and support long-term growth while adapting to new
challenges.
To effectively manage financial risks, businesses typically start by identifying all possible
sources of risk. This includes analyzing internal factors, such as operational
inefficiencies, and external factors, such as market trends or geopolitical issues. Once
identified, these risks are assessed in terms of their likelihood and potential impact on
the company's finances.
After assessing the risks, companies develop strategies to mitigate or address them.
These strategies might involve diversifying investments, hedging against market
fluctuations using financial instruments like futures or options, or implementing strict
credit policies to reduce exposure to bad debts. Risk management also includes
regularly monitoring and reassessing risks to adapt to new challenges or changes in the
business environment.
In addition to protecting the company’s financial health, effective financial risk
management helps build stakeholder confidence, maintain business continuity, and
support sustainable growth. It is an essential part of a company’s overall strategic
planning and plays a critical role in navigating the uncertainties of the business world.
Types of financial risk
1. Market Risk
Market risk refers to the possibility of financial losses due to changes in market
conditions, such as stock prices, interest rates, or currency exchange rates. These
changes can affect a company's investments, profitability, or financial stability.
Example:
A company buys imported materials, but the value of the local currency drops, making
the imports more expensive and increasing costs.

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2. Credit Risk
Credit risk arises when a customer, borrower, or another business fails to meet their
financial obligations, such as repaying loans or invoices. This can lead to financial losses
for the company.
Example:
A small business delivers products to a client on credit, but the client delays payment for
months, causing cash flow issues.
3. Liquidity Risk
Liquidity risk occurs when a company doesn’t have enough cash or readily available
assets to cover its short-term obligations, like paying suppliers, employees, or debts.
This can disrupt operations and damage the company's reputation.
Example:
A company receives payment late from its customers and struggles to pay its electric bill
on time.
4. Operational Risk
Operational risk results from failures in internal processes, systems, or human errors
that lead to financial or reputational losses. This includes issues like technical failures,
data breaches, or fraudulent activities.
Example:
An employee accidentally inputs the wrong amount in an invoice, causing confusion and
delays in payment.
Key components of financial risk management
1. Risk Identification
Explanation:
Risk identification is the first step in financial risk management. It involves recognizing
all the potential risks that could affect a company’s financial health, including market
risks, credit risks, operational risks, and liquidity risks. The goal is to ensure that no risk

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goes unrecognized, as understanding what could negatively impact the business is
essential for developing strategies to address them.
Example:
If a company imports raw materials from abroad, it might identify foreign currency
fluctuations as a risk. If the value of the foreign currency increases compared to the
local currency, it could make imports more expensive, negatively impacting profit
margins. By identifying this risk, the company can take steps to manage it.
2. Risk Assessment
Explanation:
Risk assessment involves evaluating the likelihood of each identified risk occurring and
the potential impact on the company if it does. This step is crucial for prioritizing which
risks need immediate attention and which can be managed over time. It involves both
quantitative measures (such as potential financial losses) and qualitative judgment (like
reputational damage or customer trust).
Example:
A company may estimate the financial loss if interest rates rise by a certain percentage.
If the company has significant loans with variable interest rates, a 1% increase in rates
might significantly increase its costs. By assessing this risk, the company can decide how
to address it, such as by refinancing or using hedging strategies.
3. Risk Mitigation Strategies
Explanation:
Risk mitigation involves developing and implementing strategies to reduce or eliminate
identified risks. These strategies can include transferring the risk (through insurance or
contracts), avoiding the risk (by changing business practices), or reducing the impact of
the risk (by taking protective measures like diversification or hedging).
Example:
To protect against market fluctuations (e.g., the value of stocks or commodities), a
company could use hedging tools like options or futures contracts. These financial

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instruments allow the company to lock in prices, helping to prevent significant losses if
the market moves unfavorably

4. Monitoring and Reviewing

Explanation:
Risk management is an ongoing process, and it’s essential to continuously monitor the
risks and review strategies to ensure they remain effective. As the business environment
changes, new risks can emerge, and existing risks can evolve. Regularly reviewing and
adjusting risk management strategies helps a company stay proactive in its approach to
managing risks.
Example:
A company that provides credit to customers might regularly review its credit policies to
adapt to changing payment behaviors, such as an increase in late payments. By
monitoring these trends, the company can adjust its credit terms or collection efforts to
reduce the risk of defaults and maintain cash flow.

Why risk management is important?

1. Prevents Losses
Explanation:
Risk management helps businesses identify potential threats and take actions to avoid
significant financial losses. By preparing for risks, companies can protect themselves
from unexpected financial hits that might otherwise hurt their bottom line.
Example:
A small business owner takes out insurance on their store. If a fire damages the store,
the insurance helps cover the repair costs, preventing a huge financial loss
2. Ensures Stability
Explanation:
Effective risk management helps businesses continue their operations smoothly even

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during times of uncertainty or unexpected events, such as economic downturns or
natural disasters. It ensures that the company can remain stable and focused on its
long-term goals.
Example:
A freelance sets aside part of their income for emergencies. If they lose a client
unexpectedly, the saved money helps them pay bills and stay stable while looking for
new work.
3. Compliance
Explanation:
Risk management also helps ensure that a company is in compliance with all relevant
laws and regulations. This prevents legal issues, penalties, and fines that could harm the
company’s reputation or financial health.
Example:
A company makes sure to file taxes on time to avoid fines or legal trouble. By doing so,
they stay compliant with the tax laws and avoid unnecessary costs.
4. Informed Decision Making
Explanation:
Risk management helps business managers understand potential risks and how they
might affect their decisions. With this knowledge, managers can make more informed
choices that support the company’s financial goals and long-term success.
Example:
A business owner consider takings a loan to expand. By assessing risk of not being able
to repay the loan, they decide to delay the expansion until they are more financially
secure.
Reducing financial risk
1. Diversification
What it is:
Diversification is the practice of spreading investments or business activities across

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different assets, sectors, or regions. The idea is to avoid placing all your financial
resources into one single area, which could expose you to higher risk if that area
performs poorly. Diversification can be applied to both personal investments and
business operations.
How it helps:
By spreading investments across different types of assets (e.g., stocks, bonds, real
estate), industries, or markets, the risk is minimized because not all sectors will face
downturns at the same time. If one area suffers losses, other investments may still be
doing well, helping to balance out the overall performance of your portfolio or business.
Example:
Instead of investing only in tech stocks, you also invest in real estate or bonds. If the
technology sector faces a downturn, your investments in real estate or bonds might still
perform well, protecting your overall financial position.
2. Hedging
What it is:
Hedging is a strategy that involves using financial instruments to offset the risk of
adverse price movements in investments or business activities. Essentially, it’s like
buying insurance for your financial positions. Hedging strategies can include using
derivatives like options or futures contracts to protect against risks such as price
fluctuations in commodities, currencies, or stocks.
How it helps:
Hedging helps protect against the negative effects of unexpected changes in market
conditions. By locking in prices or rates in advance, a business or investor can avoid
significant losses due to volatility in the market. This adds a level of security and
certainty to their financial planning.
Example:
A company that imports goods might use a contract to lock in exchange rates and avoid
currency risk. If the value of the local currency declines, the company is protected from

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paying more for imported goods than originally planned.
3. Insurance
What it is:
Insurance is a contract in which an individual or business pays a premium in exchange
for financial protection against various risks. These risks can include property damage,
health issues, accidents, or liabilities. Insurance is a way of transferring the financial
burden of these risks to an insurer, helping to protect a business or individual from
large, unexpected expenses.
How it helps:
Insurance helps reduce financial risks by providing compensation in case something bad
happens. This allows individuals and businesses to recover from unexpected events,
such as accidents or natural disasters, without facing severe financial hardship. It offers
peace of mind and financial security, knowing that the risk is shared with the insurer.
Example:
A business buys insurance for its building to cover fire damage. If a fire occurs, the
insurance helps pay for the repairs, preventing the business from having to bear the full
cost of the damage.
4. Maintaining Liquidity (Cash Reserves)
What it is:
Maintaining liquidity means having enough cash or assets that can easily be converted
into cash to meet immediate financial needs. This includes keeping a cash reserve or
having access to liquid assets like savings or short-term investments. Businesses and
individuals need liquidity to handle unexpected costs or to ensure that they can
continue their operations without relying on credit or loans.
How it helps:
Having liquid assets available ensures that you can meet your financial obligations (such
as paying bills, salaries, or suppliers) without needing to borrow money or sell long-term
investments. This reduces the risk of running into cash flow problems, especially during

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times of uncertainty or when unexpected expenses arise.
Example:
A business keeps extra cash in the bank to cover unexpected costs. This way, if
something urgent happens, like a sudden equipment breakdown, the business can pay
for the repairs without needing to take out a loan or disrupt its operations.
5. Risk Assessment and Monitoring
What it is:
Risk assessment and monitoring involve regularly evaluating the potential risks that
could affect your business or investments. This process includes identifying the different
types of risks (such as market risks, operational risks, or credit risks) and assessing their
likelihood and potential impact. It also involves continuously tracking changes in the
market or business environment to detect new risks as they arise.
How it helps:
By regularly monitoring and assessing risks, businesses can catch potential problems
early and take proactive steps to address them before they become serious issues. This
approach helps businesses stay agile and responsive, adjusting their strategies to avoid
or minimize the impact of risks.
Example:
A company monitors the stock market to anticipate changes that could affect their
business. If they see a significant market downturn coming, they might adjust their
investment strategies or hedge against potential losses to minimize risk.
6. Strong Internal Controls
What it is:
Internal controls are the processes, policies, and procedures that a business puts in
place to safeguard its assets, ensure accuracy in financial reporting, and prevent fraud
or mistakes. Effective internal controls help maintain the integrity of financial
transactions and protect the business from financial mismanagement or theft.
How it helps:

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Strong internal controls reduce the likelihood of fraud, errors, or mismanagement. They
help businesses operate efficiently, ensuring that financial transactions are recorded
accurately and that resources are used properly. By having systems in place to prevent
or detect problems early, businesses can avoid significant financial losses.
Example:
A company requires two approvals before making large financial transactions. This
system ensures that no single person can misuse company funds or make unauthorized
transactions, reducing the risk of financial fraud.
7. Managing Debt
What it is:
Managing debt involves keeping borrowing at a manageable level and ensuring that
debt is used wisely for productive purposes. This includes carefully considering the
terms of loans, ensuring that debt repayment schedules are feasible, and avoiding
taking on excessive debt that could become unmanageable.
How it helps:
By managing debt responsibly, businesses and individuals avoid taking on more debt
than they can handle, reducing the risk of default or financial distress. Keeping debt
levels under control ensures that interest payments and repayments do not consume
too much of the company’s cash flow, allowing for stability and growth.
Example:
A company avoids taking out high-interest loans that could become too expensive.
Instead, they choose to finance their operations with more affordable options or use
their own savings to reduce their debt burden and financial risk.
8. Capital Adequacy
What it is:
Capital adequacy refers to the amount of capital (or funds) a business or financial
institution needs to maintain to absorb losses and remain solvent. Businesses and
financial institutions must have enough capital to cover potential risks and unexpected

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events without going bankrupt. This is particularly important for banks and financial
institutions, which need to maintain a reserve of capital to ensure they can handle any
financial shocks.
How it helps:
Having sufficient capital provides a cushion for businesses to absorb losses during tough
times, such as during an economic downturn. It ensures that businesses can continue to
operate without being forced into bankruptcy or financial distress.
Example:
Banks are required to keep a certain amount of capital to ensure they can handle
losses. This ensures that if a large number of customers default on loans, the bank can
cover those losses without collapsing.
9. Scenario Analysis and Stress Testing
What it is:
Scenario analysis and stress testing involve examining how a business or investment
portfolio would perform under different challenging scenarios. These tests simulate
negative events, such as an economic recession, a market crash, or a sudden increase in
costs, to evaluate the resilience of the business. Stress testing helps businesses
understand their vulnerabilities and prepare for extreme events.
How it helps:
By conducting these tests, businesses can identify potential weaknesses in their
financial strategies and make adjustments before facing a crisis. This preparation allows
businesses to respond effectively to adverse conditions and avoid being caught off
guard.
Example:
A company checks if it could survive a 50% drop in sales during a recession. If the
company finds that it wouldn’t be able to stay afloat, they can make changes, such as
cutting unnecessary expenses or diversifying revenue streams.
10. Legal and Regulatory Compliance

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What it is:
Legal and regulatory compliance involves adhering to all the relevant laws, rules, and
regulations that apply to a business’s operations. This includes following tax laws, labor
laws, environmental regulations, and industry-specific rules. Compliance ensures that
the business operates ethically and avoids legal trouble.
How it helps:
Staying compliant with laws and regulations helps businesses avoid fines, legal fees, and
reputational damage. Compliance also ensures that businesses operate within the legal
framework, reducing the risk of facing costly lawsuits or penalties.
Example:
A business ensures it follows tax laws to avoid penalties from the government. This
includes filing taxes on time and paying the correct amount, helping the business avoid
audits or legal action.

TAHUP,KRISTINE

HOW to avoiding pitfalls in making financial decisions

Financial decisions can be complex, and avoiding pitfalls requires careful planning and a
disciplined approach.

Here are some key points to help you make informed financial decisions:

1. Know Your Assumptions

Every financial analysis and budgeting process relies on some assumptions, such as
revenue growth, cost drivers, discount rates, and market conditions. However, not all
assumptions are equally valid, realistic, or transparent. To avoid pitfalls, you should
always state your assumptions clearly, justify them with evidence, and test them with
sensitivity analysis. This way, you can reduce the risk of bias, errors, or surprises in your
financial projections and scenarios.

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Explanation: Every financial model is built on assumptions. These can range from simple
estimates like future revenue growth rates to complex projections of market trends. It's
crucial to be explicit about these assumptions, as they directly influence the outcomes
of your analysis.

Example: If you're forecasting sales for a new product, you might assume a 10% annual
growth rate based on historical data and market research. However, if this assumption
is overly optimistic, it could lead to inflated revenue projections and inaccurate
budgeting.

2. Use Appropriate Tools and Methods

There are many tools and methods available for financial analysis and budgeting, such
as spreadsheets, software, ratios, models, and frameworks. However, not every tool or
method is suitable for every situation, purpose, or audience. To avoid pitfalls, you
should always choose the tools and methods that match your objectives, data, and
context. For example, you should use a discounted cash flow model for valuing long-
term investments, but a payback period method for assessing short-term cash flows.

Explanation: Choosing the right tools and methods is essential for accurate and reliable
financial analysis. Different techniques are suited for different scenarios.

Example: To evaluate the profitability of a new project, you might use a discounted cash
flow (DCF) analysis. However, for a quick assessment of a short-term investment, a
simple payback period calculation might suffice.

3. Align Your Budget with Your Strategy

A budget is not just a numerical exercise, but a reflection of your strategic priorities,
goals, and actions. Therefore, you should always align your budget with your strategy,
and not the other way around. To avoid pitfalls, you should ensure that your budget
supports your vision, mission, and values, as well as your competitive advantage, market

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position, and customer needs. You should also monitor and adjust your budget regularly
to account for changes in your internal and external environment.

Explanation: Your budget should be a direct reflection of your strategic goals. It should
allocate resources to initiatives that align with your long-term vision.

Example: If your strategy is to expand into a new market, your budget should include
funds for marketing, sales, and operational expenses in that market. Conversely, if
you're focusing on cost reduction, your budget should prioritize efficiency
improvements and cost-cutting measures.

4. Communicate Your Results Effectively

Financial analysis and budgeting are not only about numbers, but also about stories,
insights, and recommendations. Therefore, you should always communicate your results
effectively to your stakeholders, such as senior management, investors, or employees.
To avoid pitfalls, you should tailor your communication to your audience, using clear
language, relevant data, and compelling visuals. You should also highlight the key
takeaways, implications, and actions from your analysis and budgeting.

Explanation: Clear and concise communication is vital for ensuring that your financial
analysis is understood and acted upon.

Example: Instead of simply presenting a complex financial model, you could create a
clear and concise summary report that highlights the key findings and
recommendations. Visual aids like charts and graphs can also help to convey complex
information in a more accessible way.

5. Learn from Feedback and Best Practices

Financial analysis and budgeting are not static or one-time activities, but dynamic and
continuous processes that require constant learning and improvement. Therefore, you
should always seek feedback and best practices from your peers, mentors, or experts in

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your field. To avoid pitfalls, you should listen to constructive criticism, acknowledge your
strengths and weaknesses, and implement changes and corrections as needed. You
should also benchmark your performance against industry standards, competitors, or
previous periods.

Explanation: Continuous learning and improvement are essential for effective financial
analysis and budgeting. Seeking feedback and benchmarking your practices against
industry standards can help you identify areas for improvement.

Example: If a financial analysis you conducted was criticized for being overly complex,
you might simplify your future analyses by focusing on key metrics and using clearer
language.

6. Keep it Simple and Realistic

Financial analysis and budgeting can be complex and challenging, but they do not have
to be complicated and unrealistic. Therefore, you should always keep it simple and
realistic, avoiding unnecessary details, assumptions, or calculations that do not add
value or clarity to your analysis and budgeting. To avoid pitfalls, you should focus on the
most important and relevant factors, use common sense and judgment, and check your
accuracy and consistency. You should also be humble and honest about the limitations
and uncertainties of your analysis and budgeting.

Explanation: While financial analysis and budgeting can be complex, it's important to
avoid unnecessary complexity. Overly intricate models can be difficult to understand,
maintain, and update.

Example: Instead of creating a highly detailed, multi-tab spreadsheet, you could use a
simpler approach that focuses on the most critical factors. By keeping your analysis
straightforward, you can reduce the risk of errors and make it easier to identify trends
and insights.

TAYOTO

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WHAT IS RISK?
Risk is the chance that the outcome differs from what is expected. Usually, when we talk
about business risk, we are referring to possible negative impact and consequences of
an event or decision.
Business risk management is the process of identifying, evaluating, and controlling risks
that could negatively impact a business. It helps businesses make better decisions and
plan for emergencies or opportunities.
Types of Business Risks
1. Strategic risks
Explanation Threats to business strategy, competition, and market trends.
Example: Market risks such as changes in market trends, demands or competition.

2. Operational risks
Explanation Risks related to internal processes, people, and systems.
Example: Data breaches, unauthorized access or theft in the company, employee errors

3. Financial risks:
Explanation Risks affecting financial stability, liquidity, and creditworthiness.
Example: Credit risks, financial stability, liquidity

4. Compliance risks
Explanation Non-compliance with laws, regulations, and industry standards.
Example: Tax compliance, Accounting and Financial Reporting, Contract Breaches

5. Reputation risks
Explanation: Damage to brand image and reputation.
Example: Controversies of the company like product defects, service failures, employee
misconduct, unethical sourcing, logistics disruptions, etc.

RISK ASSESMENT AND ANALYSIS

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Risk Analysis
- Assessing the likelihood of an adverse event occurring that may negatively affect a
business, investment, or project.

Types of Risk Analysis

1. SWOT Analysis
Explanation: Identifying strengths, weaknesses, opportunities, and threats.

2. Decision Tree Analysis

Explanation: Visualizing possible outcomes and decisions.

3. Failure Mode and Effects Analysis (FMEA)

Explanation: identifying potential failures and consequences.

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4. Fault Tree Analysis
Explanation: Identifying root causes of failures.

Risk Assessment
- Identifies and analyses potential (future) events that may negatively impact
individuals, businesses, assets, and/or the environment. It evaluates overall risk
exposure and prioritizes mitigation strategies.

Risk assessment breaks down into:

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Step 1: Identification
Explanation: The purpose of risk identification is to find, recognize and describe risks
that might help or prevent an organization achieving its objectives. Relevant,
appropriate and up-to-date information is important in identifying risks. The
organization can use a range of techniques for identifying uncertainties that may affect
one or more objectives.

Step 2: Analysis
Explanation: Risk analysis allows you to understand the nature of risk, its characteristics
and level. Because an event can have multiple causes and consequences and can affect
multiple objectives a risk analysis should involve a detailed consideration of
uncertainties such as risk sources, consequences, likelihood, events, scenarios, controls
and their effectiveness. Risk analysis can be undertaken with varying degrees of detail
and complexity, depending on the purpose of the analysis, the availability and reliability
of the information, and the resources available. Analysis techniques can be qualitative,
quantitative or a combination of both, depending on the circumstances and intended
use.

Step 3: Evaluation
Explanation: Risk evaluation can support your decisions. It involves comparing the
results of the risk analysis with the established risk criteria to determine where
additional action is required. This can lead to a decision to:
Do nothing further, consider risk treatment options, undertake further analysis to better
understand the risk, maintain existing controls.

NICANOR
STRATEGIC KNOWLEDGE AND INFORMATION
Knowledge and Information are essential for making effective decisions, so it is
information and expertise to flow freely to where it can be used by those who need
crucial to develop a leadership style and a simple, robust system that allows
it.

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Explanation: The strategic value of knowledge and information lies in their ability to
provide a competitive advantage to an organization. This enables better decision-
making, operational improvement, and the creation of innovation. Through the right
knowledge and information, a company can understand the market, identify
opportunities, and better meet the needs of its clients.

HOW KNOWLEDGE AND INFORMATION CAN BENEFITS A BUSINESS STRATEGY

Knowledge and information can benefit a business strategy by:
Informed Decision-Making: Provides data-driven insights for better choices.
Market Understanding: Helps identify trends, customer needs, and competitive
landscape.
Risk Management: Aids in assessing potential risks and developing mitigation strategies.
Innovation: Fosters creativity and new ideas by leveraging existing knowledge.
Operational Efficiency: Streamlines processes and improves resource allocation.
Customer Engagement: Enhances understanding of customer behavior for targeted
marketing.
Overall, leveraging knowledge and information leads to more effective and adaptable
business strategies.
Techniques for Managing Knowledge and Information
Explanation The techniques for managing knowledge and information are used to
effectively organize, access, and share information. Its aim is to improve decision-
making, enhance collaboration, and accelerate learning in an organization or school.
Through proper knowledge management, people become more productive and
innovative. There are various techniques.
these include the following:
1. Undertake a Knowledge Audit
This is designed to uncover the breadth, depth and location of an organization's
knowledge, and has three components:
Defining what knowledge assets exist, especially information or skills that would be
difficult or expensive to replace.
Locating those assets - discovering who keeps or "owns" them. Classifying them and
assessing how they relate to other assets.

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Explanation conducted to assess and identify the knowledge, information, and skills
possessed by an organization or individual. Knowledge Identification: Determine existing
knowledge and knowledge gaps. Usage Analysis: Examine how knowledge is used and
whether it is effective. Process Improvement: Provide recommendations for the
enhancement of knowledge and information. Planning: Assist in developing strategies
for better knowledge management. Overall, the knowledge audit is essential for
improving the performance and development of an organization.
Example:
A marketing agency wants to improve its processes by identifying gaps in knowledge
and expertise among its staff.
2. Increasing Knowledge
The results of a knowledge audit allow an organization to use and strategy. The
challenge is to increase the knowledge base, which can develop its knowledge and
information to support the business.
Explanation important to broaden our understanding of the world, make better
decisions, and enhance our abilities in various fields. It also helps in personal and
professional development.
Example:
A retail company wants to improve its sales team's understanding of digital marketing to
boost online sales.The team gains a better understanding of digital marketing
techniques, leading to more effective campaigns and a 25% increase in online sales
within six months.
3. Maintaining Knowledge
Knowledge gaps make an organization vulnerable to competition. There are many
examples of the dangers of downsizing that highlight the dangers of getting rid of
people with expertise and experience in the pursuit of short-term cost savings.
Explanation Maintaining knowledge is essential to keep the skills and information
required in various fields. It helps in personal development, job improvement, and
understanding changes in society and technology.
Example:
A software development company wants to ensure that knowledge about its proprietary
systems is preserved as employees leave or transition roles. company maintains critical

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knowledge, reducing dependency on specific employees and ensuring seamless
transitions during staff turnover. Productivity remains consistent, and new hires are
quickly brought up to speed.
4. Protecting Knowledge
Knowledge is a source of competitive advantage, so it must be protected. It falls into
two categories: explicit knowledge, such as copyright or information in handbooks,
systems or procedures; and tacit knowledge that is retained by individuals.
Explanation
Protecting Knowledge" is an initiative aimed at safeguarding and promoting intellectual
property rights. Its goal is to ensure proper recognition and protection of people's ideas,
inventions, and creative works, to prevent the abuse and theft of their knowledge and
creations.
Example: A small graphic design agency wants to safeguard its proprietary design
templates and client information.The agency protects its valuable knowledge assets,
ensuring continued competitive advantage and maintaining client trust.
5. Establishing Information Systems
An efficient information management system will co-ordinate and control information
and aid planning.
Explanation The establishing information system is for the creation and implementation
of systems that collect, organize, and analyze information. This is important to improve
the decision-making process, facilitate communication, and enhance the operations of
an organization or project.

6.. Managing the flow of information

Secure the information. Confidential data should be secure and all information should
be backed up to prevent it being lost. Back-up files or documents should be kept at a
different location.
Explanation It is important to ensure the proper processing, organization, and delivery
of information in an organization. It helps improve communication, decision-making,
and effectiveness in tasks. In school, it helps in organizing projects, communicating with
teachers and students, and monitoring tasks and assignments.

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ANDRADE

Information flows- represent detailed logical schematics and patterns mapping out
necessary data sharing dependencies, sequencing hand offs and required transformations
flowing across people, process and system steps. This could include departments such as
research and development, design, production, marketing, sales, and customer service.
The information exchanged can range from product specifications and customer feedback
to market trends and operational metrics. The flow of information is not limited to a linear
path. It can be multidirectional, with information moving vertically (from top management
to frontline employees and vice versa) and horizontally (between departments or teams).
The complexity of information flows can vary depending on the size of the organization,
the nature of the product or service, and the structure of the operations.
Types of Information Flows
Upward information flow- refers to the communication from lower levels of the
organization to the higher levels. This could include operational reports, feedback, and
suggestions.
Downward information flow- on the other hand, involves directives, policies, and
guidelines moving from top management to the employees.
Lateral information flow- pertains to the exchange of information between peers or
departments at the same level within the organization.

Each type of information flow serves a unique purpose and plays a crucial role in the
overall functioning of the organization. Upward information flow helps the management
make informed decisions, downward information flow ensures alignment and consistency
in operations, and lateral information flow promotes collaboration and coordination
among different teams.

Importance of Information Flows in Product Management & Operations

Explanation

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Effective information flows are the lifeblood of product management and operations.
They ensure that all stakeholders have access to the necessary information at the right
time, enabling them to perform their tasks efficiently and make informed decisions. This,
in turn, can lead to improved operational efficiency, product quality, and customer
satisfaction.
Moreover, information flows facilitate transparency and accountability within the
organization. They allow for the tracking of product development progress, the
identification of bottlenecks, and the evaluation of performance against set objectives.
They also foster a culture of continuous learning and improvement, as the insights derived
from the information can be used to refine processes, enhance products, and innovate
solutions.
Role in Decision Making
One of the key roles of information flows in product management and operations is
supporting decision-making processes. By providing timely and accurate information, they
enable managers and teams to make decisions that are data-driven and aligned with the
organization's goals and strategies. This can range from strategic decisions such as product
positioning and market entry to operational decisions like resource allocation and process
optimization.
Explanation Furthermore, information flows also facilitate the evaluation of decisions.
They provide the necessary data to measure the impact and effectiveness of decisions,
allowing for adjustments and improvements to be made as necessary. This iterative
process of decision-making and evaluation is crucial in the dynamic and competitive
landscape of product management and operations.
Role in Coordination and Collaboration
Another important role of information flows is fostering coordination and collaboration
among different teams and departments. In the context of product management and
operations, various teams need to work together to bring a product from conception to
market. This requires a high degree of coordination and collaboration, which is facilitated
by effective information flows.
Explanation For instance, the design team needs to communicate the product
specifications to the production team, the marketing team needs to share market insights

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with the product team, and the customer service team needs to relay customer feedback
to all relevant teams. By ensuring that all stakeholders are on the same page, information
flows contribute to the seamless execution of product management and operations.
Managing Information Flows in Product Management & Operations
Managing information flows effectively is a critical task in product management and
operations. It involves designing and implementing systems and processes that facilitate
the smooth and efficient transfer of information. This includes determining the types of
information to be shared, the channels through which they will be shared, and the
frequency of sharing.
Furthermore, managing information flows also entails ensuring the quality and integrity
of the information. This means validating the accuracy of the information, protecting it
from unauthorized access or manipulation, and updating it as necessary. It also involves
making the information easily understandable and accessible to all relevant stakeholders.

Tools and Techniques

There are various tools and techniques that can be used to manage information flows in
product management and operations. These include communication platforms, project
management tools, data management systems, and business intelligence software. These
tools enable the organization to capture, store, process, and disseminate information
effectively.
For instance, communication platforms such as email, instant messaging, and video
conferencing can facilitate real-time communication and collaboration. Project
management tools can help track progress, assign tasks, and share updates. Data
management systems can ensure the accuracy and security of data, while business
intelligence software can analyze data and generate insights.
Best Practices
When it comes to managing information flows, there are several best practices that
organizations can adopt.
One is to establish clear communication protocols. This involves defining who needs to

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receive what information, when and how they should receive it, and who is responsible
for providing it. This can help prevent information overload, ensure timely communication,
and promote accountability.
Another best practice is to use standardized formats and terminologies. This can enhance
the clarity and consistency of the information, making it easier for everyone to understand
and use. Additionally, it is important to provide training and support to all stakeholders to
ensure they are capable of handling the information effectively.

Challenges in Managing Information Flows

Despite its importance, managing information flows in product management and
operations can present several challenges. These include information overload,
information silos, and information security issues. Understanding these challenges is the
first step towards addressing them and optimizing the management of information flows.
Information overload refers to the situation where the volume of information exceeds
the capacity of individuals or teams to process it. This can lead to confusion, stress, and
decision paralysis. On the other hand, information silos occur when information is not
shared or accessible across different teams or departments, leading to inefficiencies and
inconsistencies. Information security issues involve the risk of data breaches, loss, or
corruption, which can have serious implications for the organization.

Overcoming Challenges
There are several strategies that organizations can employ to overcome the challenges in
managing information flows. To address information overload, organizations can
implement data management systems that filter and prioritize information. They can also
provide training to employees on how to manage and process information effectively.
To break down information silos, organizations can foster a culture of openness and
collaboration. They can also use integrated systems and platforms that allow for the
sharing and access of information across different teams and departments. To mitigate
information security issues, organizations can implement robust security measures, such
as encryption, access controls, and regular audits.

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Examples of Information Flows in Product Management & Operations
In a manufacturing company, information about the design and specifications of a new
product flows from the design team to the production team. This information is used by
the production team to manufacture the product according to the desired quality and
standards.

In a software development company, information about bugs and issues reported by users
flows from the customer service team to the development team. This information is used
by the development team to fix the issues and improve the software.

In a retail company, information about sales and customer feedback flows from the store
teams to the marketing and product teams. This information is used by these teams to
adjust their strategies and enhance their offerings.
Case Study: Apple Inc.
Apple Inc. is a prime example of a company that effectively manages information flows in
its product management and operations. The company is known for its tight integration
of hardware, software, and services, which is made possible by the seamless flow of
information across different teams.
For instance, when developing a new iPhone, information about the design, features, and
performance requirements flows from the product team to the engineering and
manufacturing teams. This information is used to build the iPhone to the exact
specifications. Similarly, information about user feedback and market trends flows from
the sales and marketing teams to the product and design teams, informing the
development of future products.
Case Study: Amazon.com
Amazon.com is another company that excels in managing information flows. The
company's operations are characterized by a high degree of complexity and scale,
involving millions of products, suppliers, and customers. Yet, through effective

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information flows, Amazon is able to coordinate its operations and deliver a seamless
customer experience.
For example, information about customer orders flows from the website to the warehouse,
triggering the picking, packing, and shipping of products. Information about inventory
levels flows from the warehouse to the procurement team, prompting the replenishment
of stock. Information about customer reviews and ratings flows to the product and
supplier teams, influencing the selection and management of products and suppliers.
TAHUP,MARY JANE
Information Orientation Framework
The Information Orientation (IO) Framework is a model helping organizations improve
information utilization for better business outcomes.
Explanation Tumutukoy sa ability at katatagan ng isang company to effectively gather,
manage at mag utilize ng information upang ma support yung mga strategic decisions and
actions nito.This includes using information as a strategic resource upang makakuha ng
isang competitive advantage .
Three Components
1. Information Behaviors and Values: Organizational culture and values regarding
information (e.g., accuracy, transparency).
Information behaviors and values refer to the ways people interact with, seek, and use
information, as well as their attitudes and beliefs about
Explanation Information culture: Encouraging collaboration, transparency and knowledge
sharing.
Information values: Prioritizing accuracy, relevance, timeliness and confidentiality.
Information norms: Establishing guidelines for information use and sharing.
Information leadership: Demonstrating commitment to information-driven decision-
making)
2. Information Management Practices: Collecting, analyzing, and sharing information
(e.g., data governance, analytics).

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Explanation In Information Orientation (IO), Information Management Practices (IMP)
covers strategic approaches upang epektibong mamanage ang mga resources ng
information
categorized for clarity:
Strategic IMP
1. Information Strategy Alignment: Aligning information management with
organizational goals.
2. Information Governance: Establishing policies, roles, and responsibilities.
3. Information Architecture: Designing information systems and structures.
Information Operations IMP
Data Acquisition: Collecting relevant data.
Data Storage: Managing data repositories.
Data Security: Protecting information from unauthorized access.
Data Quality: Ensuring accuracy, completeness, and consistency.
Content Management: Managing creation, storage, and dissemination of content.)
3. Information Technology Practices: Infrastructure and systems supporting information
use (e.g., software, hardware, networks).
Explanation
Information Technology (IT) Practices in Information Orientation (IO) means the strategic
use of technology to effectively manage and utilize information resources, driving
business success )
Technology Infrastructure Practices
1. Hardware Management: Managing servers, storage, and networking.
2. Software Management: Managing applications, licenses, and updates.
3. Data Center Management: Ensuring efficient data center operations.

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4. Cloud Computing: Leveraging cloud services for scalability and flexibility.
Security and Risk Management Practices
1. Information Security: Protecting against cyber threats.
2. Data Encryption: Securing sensitive data.
3. Access Control: Managing user permissions.
4. Disaster Recovery: Ensuring business continuity.)
DE ARROZ
5 Strategic Questions To Ask When Building a Company Strategy
What is a company strategy?
Explanation A company strategy is a list of actions and decisions that a company makes
to build a consumer base, establish itself in the competitive market and achieve its major
objectives. A business's leadership team generally develops a company strategy during its
creation to help it grow and develop while measuring its progress along the way. Company
strategies can include a lot of unique information, depending on the products and services
the company sells. However, most often, strategies include information such as the
company's target consumer, its main goals and solutions to any potential challenges.
1.Who is your target customer?
Explanation When answering this question, think about which consumers benefit from
your products or services the most or if your products solve a particular problem for your
customer base. For example, if you're running a window installation or repair shop, a
majority of your customers might be those who've recently damaged or broken their
windows and need immediate help.
2.What are the biggest challenges the company is facing?
Explanation When answering this question, it's helpful to examine any previous
challenges the company has faced or any minor issues that could turn into larger problems
in the future. Once you've identified any potential challenges, consider brainstorming
effective solutions to them or ways you can avoid them.

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3.How can you improve the company's current product?
Explanation When answering this question, read through customer feedback surveys and
investigate your customers' social media activity to see what they're saying about your
current products. For example, if a company sells an exercise-focused smartwatch and its
employees notice some customers complain about the small screen or weak wrist band,
they know which areas of the product need updating
4.How did the company get to where it is?
Explanation When answering this question, consider starting with a current problem or
achievement and write a list of steps that the company took to get there, starting with the
last decision made and ending with the first. Examining challenges and achievements like
this can help you see how the company could have improved each action or avoided the
challenge altogether.
5.Where does the company want to go?
Explanation When answering this question, create a set of large goals that the company
wants to achieve in a certain extended time span, such as three to five years. Giving the
company a few months or years to complete its goals can help it develop a powerful action
plan to achieve them, while still having some time and flexibility to focus on its current
customers and business.
6.What should the company do more of?
Explanation When answering this question, consider examining certain areas of the
company that meet or exceed expectations with a small amount of effort. It's possible
that giving those areas additional resources could benefit the company.
7.Do you currently have any strategic uncertainties?
Explanation When answering this question, it's important to look at the company's goals
and action plans to determine what the company wants to achieve and if it will fulfill any
of those objectives at its current pace. Any goals that you can't accurately predict you can
deem as strategic uncertainties. For example, if the company wants to increase customer
satisfaction by the end of the year, but they don't have enough customer surveys to
determine the current satisfaction data, they could label the customer satisfaction goal as
a strategic uncertainty.

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8.What is the best way to measure your progress?
Explanation There are a few great ways to measure progress, including monthly check-ins
and status reports from company departments. However, when determining the best way
to measure a company's progress, it can often depend on the company itself. For example,
if a company only has a few departments to maintain, it might be better to do monthly
check-ins because it's easy for executives to talk with each department face to face.
9.Are your employees committed to helping each other?
It's important for employees to be committed to helping one another because it can help
them fulfill company goals, improve the work environment and increase overall
productivity. When trying to determine if your employees are helping each other, consider
asking them to participate in anonymous surveys that can help inform you about any
potential challenges or communication issues within your team.
10.How will you engage and motivate your team?
Explanation If you're unsure what best motivates your employees, try using multiple
techniques and periodically measure their effectiveness. If you notice that employees are
more receptive to one of them, that might be the best technique to use for the
foreseeable future. It's also possible that some employees may prefer an incentive
program, while others prefer bonuses for exceptional work. If that's the case, it might be
helpful to implement both programs to encourage productivity
11.How will you train and develop your team?
Explanation When answering this question, it's helpful to talk with your employees and
determine their preferred method of learning. If possible, consider using multiple training
methods to ensure each one of your employees can grow and develop efficiently. However,
it's also important to pick the training methods that work best with the company's
products and services, as well as its training budget and resources.
12.What is the best way to serve shareholders?
Explanation Once you understand the investor's return, it's beneficial to list it as a goal
and create a powerful action plan to fulfill it. It's also helpful to inform employees and
other company team members about the goal to ensure they focus their work on
achieving it.

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