A mathematical model to determine strategic options for a firm using time based financial accounting and physics equations
Executive SummaryThis report uses modified physics and the basic business relationship equations to describe the business system. Thephysics - business equations are derived using conformal mapping, while thermodynamic and kinematic relationshipsare further developed and related before being applied to a business situation. The system developed has generalapplicability to business and can be used for strategic competitive positioning, amongst other postulated uses.The main purpose of this project is to build on existing work in the area of process modeling and strategy formulation todefine a quantitative management tool that will effectively enable the formulation of a generic framework, to measurethe effects of various strategic options using time based financial management and physics models.The main aims of this research project are to provide an evaluative summary of the existing literature on theapplications of process modeling and physics to business limited in scope to competitive strategic planning through aliterature review of existing business models and the subsequent development of a mathematical model based onkinematics and thermodynamics for strategic formulation.From the literature review derive a mathematical framework relating business and physics based on an indirectrelationship of physical laws to business models based on existing knowledge. Further explain why the derived modelhas applications to business, and derive a non-rigorous mathematical proof thereof. From these equations makerecommendations on how this model can be utilised as a tool to assist in strategy formulation. Thereafter providestatistical proof that the model is applicable to a defined set of companies and show by means of applications how todetermine optimal strategies using the model.The main objectives of the research project are to utilise the quantitative tool to determine where a company is, andwhere it should position itself in future to optimise its competitive position. Further, the framework must be developedinto a strategic tool that would allow for the fast turnaround in the implementation of strategy, and the ability to quicklypredict necessary changes in direction.The statistical hypothesis tested asks if it is possible to relate the laws of physics to business and use the resultantmathematical framework to analyse a firm’s competitive position in an industry and position it accordingly.From the derived equations a mathematical model to determine strategic options for a firm using time based financialaccounting principles and physics equations can be formulated and used to find profitable options for a firm. Byimplication the model can be applied to strategic positioning of the firm. Unfortunately there is no work in the literaturereviews to build this study on and much of it is built from first principles. This leads to complex mathematicalrelationships, which may prove difficult to follow..
Year of publication: |
2007
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Authors: | Carias, Rui Manuel Roteiro |
Publisher: |
University of South Africa |
Subject: | Competitiveness management | Enterprise management |
Saved in:
freely available
Saved in favorites
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