Strategy Execution Module 7: Designing Asset Allocation Systems
This module provides tools for acquiring and allocating resources. Analytic techniques related to cash flow analysis and rate of return analysis play an important role in understanding the economic effects of acquiring new resources. However, as the assets become larger and more strategic, management judgement becomes the determining factor. For assets that enhance operating efficiencies or increase revenue, we review techniques such as discounted cash flow and internal rate of return. For assets designed to enhance competitive effectiveness, we review the necessary analyses to ensure that resources are aligned with strategic initiatives. Most importantly, this module demonstrates how asset allocation fits into and supports a business's overall strategy. While this module is designed to be used alone, it is part of the Management Control Systems series. The series forms a complete course that focuses on the techniques for using performance measurement and control systems to implement strategy. Modules 1 - 4 set out the foundations for strategy implementation. Modules 5 - 10 teach quantitative tools for performance measurement and control. Modules 11 - 15 illustrate the use of these techniques by managers to achieve profit goals and strategies. Before embarking on this module, it can be particularly helpful to review Module 2: Building a Successful Strategy and Module 5: Building a Profit Plan.