An Exercise to Integrate Strategic and Financial Analysis

Many students ignore or underappreciate the important role that financial and accounting considerations have on the formulation and implementation of realistic and ultimately effective strategies. This article describes an exercise that helps build the ability to integrate strategic thinking with financial analysis. Its purpose is to help students connect financial outcomes to underlying strategic causes. It also demonstrates that financial outcomes are the result of many interdependent actions as well as sometimes uncontrollable external factors. The exercise is designed to be used early in a strategic management course to set the stage for a more in-depth and holistic consideration of later strategic management topics. This exercise involves an analysis of Target Corporation and is appropriate for MBA students