| Summary: | Executive Summary
This report uses modified physics and the basic business relationship equations to describe the business system. The
physics - business equations are derived using conformal mapping, while thermodynamic and kinematic relationships
are further developed and related before being applied to a business situation. The system developed has general
applicability 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 to
define a quantitative management tool that will effectively enable the formulation of a generic framework, to measure
the 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 the
applications of process modeling and physics to business limited in scope to competitive strategic planning through a
literature review of existing business models and the subsequent development of a mathematical model based on
kinematics and thermodynamics for strategic formulation.
From the literature review derive a mathematical framework relating business and physics based on an indirect
relationship of physical laws to business models based on existing knowledge. Further explain why the derived model
has applications to business, and derive a non-rigorous mathematical proof thereof. From these equations make
recommendations on how this model can be utilised as a tool to assist in strategy formulation. Thereafter provide
statistical proof that the model is applicable to a defined set of companies and show by means of applications how to
determine optimal strategies using the model.
The main objectives of the research project are to utilise the quantitative tool to determine where a company is, and
where it should position itself in future to optimise its competitive position. Further, the framework must be developed
into a strategic tool that would allow for the fast turnaround in the implementation of strategy, and the ability to quickly
predict necessary changes in direction.
The statistical hypothesis tested asks if it is possible to relate the laws of physics to business and use the resultant
mathematical 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 financial
accounting principles and physics equations can be formulated and used to find profitable options for a firm. By
implication the model can be applied to strategic positioning of the firm. Unfortunately there is no work in the literature
reviews to build this study on and much of it is built from first principles. This leads to complex mathematical
relationships, which may prove difficult to follow.
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