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EXPANSION STRATEGIES
1. Increase your sales and products in existing markets. This is obviously the easiest and most risk-
free way to expand. This tactic may require a bigger location, different pricing strategies, new/improved
marketing techniques - but it will be in a customer group with whom you already have a relationship. If you
get off track, your present customers will let you know!
2. Introduce a New Product. You have a successful product/service that you have been offering for some
time and have been collecting data, customer feedback and doing the tinkering on your newest product.
This is a normal evolution in business, not just an expansion tactic. When positioned as adding value and
being responsive to customer needs, this can be a relatively risk-free way to expand.
10 Rules of Exporting
4. Start a Chain. A restaurant, retail or service business that's easily reproduced and can be run from a
distance is all you need to launch a chain. But, you must be cognizant of what made the first location a
success - was it location, your staff or you? If it is just you, then duplication is only possible through detailed
operations plans and sharing staff between locations. You will need to duplicate the plan of your first
location while meeting increased customer demands. Starting a chain gives your current staff a crack at
"management" duties, training opportunities and an opportunity to expand their horizons.
5. Franchise or License. While it's a quick way to grow, a franchise agreement can cost (minimally)
$100,000 to prepare. You will need to be a good teacher, be able to prepare the training manuals
(preferably in more than one language), be very organized and willing to travel. Licensing can carry less
risk, but demands giving up a certain amount of control. Licensing a patent, trademark or industrial design
means that you sell manufacturing, distribution or production rights.
6. Join Forces / Strategic Alliance. A merger or acquisition combines the best of two companies,
expands your customer base, increases intellectual capital and delivers operational efficiencies. The trick is
finding the right partner. These partners may be new distributors, but be forewarned large retailers exact
heavy performance expectations. Can you perform to the letter of your promise? Can you meet high
standards of quality (ISO, or the like) and adapt your procedures to meet just-in-time delivery? Due
diligence and strong contractual arrangements are essential here.
7. Go Global. You can decide to go global in a number of ways. Growing markets, rising consumer
spending, improved business climate--sometimes the only place to find these things is overseas. Doing
business internationally can take the form of exporting, licensing, a joint venture or manufacturing, but
whatever form you choose, the basic business rules apply: assess customer demand, gain legal and
accounting assistance, protect intellectual property and obey regulations.
More difficult to understand than the regular business affairs may be the cultural nuances - ignore them at
your peril. In some countries, particularly those in Asia, a local partner is virtually a requirement. Your first
stop should be your target country's economic development agency, which can help marshal local
resources to get you on your way, possibly with a small financial boost. Be patient. Growing your business
globally can take more than one "sightseeing trip" to the region. Here are some steps in going global, from
easiest to hardest.
Four Ways to Go Global:
1. You can fill orders from Canadian buyers who then export your product. This is the
lowest risk of all, but does not put you in the driver's seat. You will have to rely on others to
spot the opportunities and take a passive role in the research and negotiations.
2. You can find foreign buyers operating in Canada. Multinational corporations, foreign
government and international retailers can buy goods from you in Canada to export to their
particular market. There aremany on-line websites on which you can list your product or
service, and increase the chances of your selection as a company of choice.
3. You can work through agents and distributors. By working through export
management, sales agents or trading houses you can access foreign markets while still
being involved in control of the sales and terms. These intermediaries will build your export
expertise and be able to provide information about new trends or market shifts.
4. Marketing and delivering your product directly. This option calls for a large
commitment in resources, resolve and business savvy. The best way to begin is to join
forces with non-competitor businesses and "package" your offerings. Together you can
share advice from government trade representatives, financial institutions, freight forwarders,
distribution networks, agents and even shipping space. Perhaps also, look for the cultural
bridge in your partnership - do they speak the language or have they lived in the country?
Whether you go it alone, or partner, going global has risks - and the ultimate reward
Questions to Ask:
Is my objective broad?
Is my objective non-measurable?
Is my objective continuous, ongoing, and non-dated?
Does my objective convert my mission/vision into action?
Does my objective help to sustain my competitive advantage?
There are numerous articles on both short and long-term objectives and
planning. However, the most straightforward short reference guide was this
piece from Purdue University. It is little more than a checklist for long-term
and short-term goal setting. What made it useful as a future reference
guide was a simple definition of long-term and short-term planning, and a
brief statement connecting the two. One unusual aspect of the checklist is
the suggestion that the planner consider long-term goals in relation to
family values. This is probably more applicable to someone in the
commercial sector (as suggested by the title), but the author admits that
such comparisons are probably valid in most business situations.
Financial Objectives
Financial objectives focus on achieving acceptable profitability in a
companys pursuit of its mission/vision, long-term health, and ultimate
survival. Financial objectives signal commitment to such outcomes as good
cash flow, creditworthiness, earnings growth, an acceptable return on
investment, dividend growth, and stock price appreciation.
Plan Strategy & Tactics To
Achieve Your Business Goals
your business?
A strategy is just the starting point to your planning process. Tactics make the entire
process work with daily actions. This applies to sports teams as well as businesses.
Once you have a set goal in place, you will want to know the next step once you have
achieved that goal. Debbie Donner of the Houston Chronicle describes it this way:
Strategic is doing the right things tactical is doing things right.
So what does all this mean for your business and marketing strategy?
Lets look at a great example from Brand Insight Blog. In their article they show the
process of a big brand turning around their baking soda sales. You guessed it right
its Arm & Hammer, and in the 1970s their sales were slipping. Their once solid brand
built in the 1860s had become irrelevant in the minds of consumers.
John Furgurson writes that the company created one strategic goal change the
Having a goal is great the next steps will get you to where you want to be.
O B JE CTI V ES
Marimekko's skills as an expert in colours and patterns are accentuated more clearly as a
factor of differentation.
Increase Marimekko's global visibility as an unique design brand.
To boost the brand's value through the long-term development of product, store and
distribution concepts.
To maintain strong market position in Finland.
Increase international sales annually by over one fifth the previous year.
The distribution network will be expanded in a controlled manner , primarily by increasing
the number of concept stores and shop-in-shops.
To maintain good solvency and liquidity in all market conditions.
FI NA NCI A L G OA LS
Securing profitable growth
Annual growth in consolidated net sales over 10%
Operating profit margit 10%
Return on equity (ROE) over 15%
Equity ratio 50%
A steady dividend policy
The intention is to pay a yearly dividend
Percentage of earnings per share allocated to dividends at least 50%
The objective defines the ends that the strategy is designed to achieve within a
specific time frame.
The scope is the domain of the businessthe part of the business landscape in
which your company will operate.
The competitive advantage is the essence of your strategy. It determines what
you will do differently or better than the competition to achieve your objective.
Defining the objective, scope and competitive advantage requires trade-offs, which
are fundamental to strategy. For example, if a company decides to pursue growth, it
must accept that profitability will not be a priority. If it decides to serve institutional
clients, it may ignore retail customers.
The end result is a brief statement that reflects the three elements of an effective
strategy and makes sense to everyone in the company. It may include explanatory
notes to clarify issues and implications.
Read next: A strategy canvas: A tool for developing a differentiation strategy for
technology products
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Robin Chance
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B2B Marketing | Business Development for Lawyers | Leadership
In order to grow a business needs to increase their share of competitive markets. Marketing plans start with
the overall strategic business plan of a company, but explain further how specific aims will be carried out.
Marketing plans address this through defining product or service offerings, researching target markets,
analysis of competition, then strategically placing, pricing and promoting the company offering.
Included in the growth objectives of an organization is the availability of capital resources to invest in
future expansion projects. If a company's financial resources are strong, capital could conceivably come
from cash reserves. For many organizations, strengthening financial resources means to build cash flow or
increase assets in order to attract investors and court creditors to fund expansion.
Physical Resources
To companies that produce tangible products, physical resources could mean the plant, machinery and
other equipment integral to producing a product. Service businesses could define physical resources as
office space or computer equipment to enhance customer service and other business processes. In either
respect, the goal of increasing physical resources deals with using equipment or machinery to better
produce a product, or offer a service.
Productivity
Productivity for any organization means fine tuning a business process to achieve the best result for a
customer while increasing profit. A manufacturing organization that fine tunes a process could reduce
waste, reduce production time, and in the end, make a better product that gets to the customer faster. A
service business that changes the way customers are handled can decrease call times and increase customer
satisfaction and loyalty.
Innovation
Innovation is a goal that helps a business stay ahead of the competition. Placing resources into research
and development to create a new product, or into offering a better service, can pay dividends by entering a
new and unique product or service into the marketplace.
Action Planning
A business cannot move forward without defining specific action steps to take them toward their goals and
identified business objectives. Action planning involves identifying the top objectives for an organization,
then developing SMART goals -- goals are specific, measurable, achievable, realistic and timely. By
setting and meeting SMART goals, an organization will meet specific business objectives along the way.
Successful businesses are based on both goals and objectives, as they clarify the purpose of the business
and help identify necessary actions Goals are general statements of desired achievement, while objectives
are the specific steps or actions you take to reach your goal. Both goals and objectives should be specific
and measurable. Goals can involve areas such as profitability, growth and customer service, with a range
of objectives that can be used to meet those goals.
Profitability
A common business goal is to run a profitable operation, which typically means increasing revenue while
limiting expenses. To reach this goal, objectives could consist of increasing annual sales by 10 percent or
landing three new accounts each month. Expense objectives could involve finding a new operating facility
that decreases your rent by $200 a month or cutting monthly utility bills by 15 percent.
Customer Service
Customer service goals could include reducing complaints by 50 percent over one year or to improve
resolution times to customer complaints to a minimum of one business day. To meet customer service
goals, objectives could include increasing your customer service staff from one to three workers by the end
of the year or implementing a policy where customers are guaranteed to receive a return phone call before
the end of the business day.
Retention
If you've experienced a problem with employee turnover, your overall goal could be to improve retention.
To make this goal specific, you could measure the current turnover rate, like one employee in five leaves
after three months, and decide to double this figure to six months. Objectives to meet this goal could
include implementing a training program that details new-hire activities for the first 90 days on the job.
You also could implement one-on-one bi-weekly meetings with your employees in an effort to build
rapport and find out what's on their mind.
Efficiency
Another goal could be to become more efficient in your business operation as a way to increase
productivity. To improve efficiency, you could set a goal of increasing shipping times from three days to
two days. Objectives to meet this goal could include finding a new shipper, or improving production times
to have units ready to ship before 10 a.m. each morning.
Growth
Perhaps your goal is to grow your business operation. If you own a franchise unit, for example, your goal
might be to open three more units within a five-year period. If this was the case, your objectives could
include scouting a new city once each quarter, or reducing your franchise fees by 25 percent for the next
six months.
Examples of Strategic
Objectives
Strategic objectives are one of the fundamental building blocks of
your strategic plan. For all intensive purpose of this post, weve put
together below a short list of common strategic objectives.
As a quick refresher, remember that strategic objectives are long-term and
should be aligned with your organizations mission and vision. If you need
an in-depth explanation of strategic objectives and how to identify and
create them, click here to watch the video.
We prefer to organize these objectives into these four buckets and have
provided some examples of each:
Fifteen years later, the company is taken much more seriously. The flagship business
accounts for 50% of overall sales, with grains, oilseeds, sugar and cotton accounting for the
bulk, at 5,191 crore. But not a rupees worth of grain is grown by Cargill, on its own or
through contract farming. Instead, the company sources everything from the market yard and
manages inventory for its clients. Edible oils are sourced either directly from the parent or
from shippers in Argentina, Brazil, Indonesia, Malaysia or Ukraine.
This is how Cargill has built its reputation as a commodities giant in over 65
countries: its heft flowing from its super-efficient supply chain. Over the years, the
company established deep ties with farmers, millers, grain traders and shippers all
over the world. These relationships help it source, process and distribute grain from
an area of surplus to where it is needed for either industrial or consumer use.
Sounds simple? Its anything but that, given the number of uncontrollable moving
parts. Crop output is subject to the vagaries of weather, and shipping grains across
oceans comes with its own risk. But over the decades, Cargill perfected walking this
tightrope to a fine art and is now the biggest dry bulk charterer in the world. Its
chartering expertise is availed of not only by its clients but its competitors as well.
India, though, comes with its own set of issues. Infrastructure, not surprisingly, is
one of the biggest. Anand says that, at any given point in time, Cargill has roughly
100 to 160 different grain and oilseed locations in the country. These are all flatbed
(open storage) warehouses, which are hired on short- and long-term lease from
various state or central warehousing companies. Not only is using so many locations
uneconomical, nowhere in the world does Cargill use flatbed storage but here. But
rather than set up its own warehouses, Cargill has so far followed an asset-light
model it has only one storage facility, at Rajasthan, acquired through its buyout of
AWBs commodities management business in 2011.
At any given point in time, Cargill has roughly 100 to 160 different grain and oilseed locations in the
country BK Anand, business head, Grains & Oilseeds Crush
Then, Indian ports are not equipped to turn around bigger vessels. So, Cargill restricts itself to
small size vessels of 15,000-25,000 tonne capacity. Anand says, They are a little less
economic from the freight point of view, but it evens out for customers in the form of avoided
detention and quality issues.
Also, unlike a China, India is not a global supply and demand shaker and in
commodities such as edible oils and pulses, being chronic importers. Palm oil is
imported from Malaysia and Indonesia, soyabean from Argentina and Brazil, while
sunflower oil comes mainly from Ukraine. Yes, we tend to be exporters in wheat,
sugar, corn and cotton or even onions in spurts, depending on the whim of policy
mandarins, but largely we are price takers owing to our low productivity.
Fighting on multiple fronts
Cargill competes with a bevy of marquee players in the country
And nowhere does it hurt more than in edible oils where not only is oilseed
production low, but even a rise under area of cultivation is not helping. Govindbhai
Patel, co-founder of GGN Research and a veteran of many crop seasons, points out,
The area under soya has increased, but soya is a low oil-content seed, so even
though its production has increased, it has not contributed to the availability of
edible oils. This year, our total edible oil supply may increase by 400,000 to 500,000
tonne, while incremental growth in consumption will be 800,000 to 900,000 tonne.
So, that is the minimum incremental import we have to do.
Of course, the shortage of high oil-content seeds such as groundnut, rapeseed and
sunflower presents its own opportunity for edible oil importers such as Cargill and
has enabled others such as Adani Wilmar to build multi-billion dollar businesses in
the country. The Ahmedabad-based Adani Wilmar, for instance, had sales of 14,253
crore and profit of 75.42 crore in FY13, and has a 30% share of the 4 million tonnes
branded edible oils market. Says Pranav Adani, managing director, Adani Wilmar,
Our ideal mix of domestic and port-based processing infrastructure, strong brand
and global trading expertise of our joint venture partner, Wilmar International,
helped us become the leader in the branded edible oil segment. For its part, Cargill
hasnt been slow to react, either. The companys foods business now accounts for
nearly half its consolidated sales (more on that shortly).
It pays to be cheap
Palm oil is most consumed as it is not highly priced compared with other edible oils
Cargill has also positioned itself to take advantage of trading opportunities in wheat,
sugar and cotton. India is the largest consumer and the second-largest producer of
sugar and for the past 13 years, Cargills sugar business unit has been helping millers,
traders and end-users secure supplies of raw and refined sugar. Depending on the
demand and supply conditions at play, the volume handled has varied from as high
as 1 million metric tonne to 50,000 metric tonne.
For the sugar industry, regulation and interference have always been a sore point,
until now in April 2013, the government partially decontrolled prices, allowing
companies to sell their produce in the open market. Swati Shukla, business head,
sugar business, feels that post-deregulation there could be a whole lot of
opportunities for millers looking to de-risk. But while trading opportunity will
certainly increase, so shall risk. Besides non-delivery and credit default, the other big
risk is exchange-rate fluctuation and that hurts Cargills interest across the board.
Money in the bank
While rising inputs costs have been a common bugbear for all edible oil companies,
Cargill tries to keep costs lower, courtesy its forecasting and trading edge. Chaudhry
says, While we dont have control on international edible oil prices, we have a better
ability to forecast prices and take positions. This keeps our average cost lower than
other players in the category. Cargills shield against forex risk is its trade and
structured finance (TSF) unit. The 170-people strong global division has a balance
sheet size of a couple of billion dollars. Its funding is a mix of internal and partner
bank financing.
The India team consisting of 15 people is an important cog and its total contribution
is about 10-12% in terms of balance sheet and profit. TSF helps the respective
business unit finance either its suppliers or buyers depending on how the transaction
is structured. Says Gopul Shah, treasurer and managing director, trade structured
finance, Forex and commodity hedging do not happen in isolation. Whenever we
work on a transaction, we monitor all markets, be it capital, futures or OTC, and that
gives us a good understanding of risk. All those factors are taken into account when
we price our services.
Pockets of strength
Gemini is the strongest brand in Cargill Indias portfolio
Source: Company
Depending on the opportunities available, Shah either carries the risk on his books, places it
with a counter party or hedges it using exchange-traded products. He explains, Credit rating
is static because it is always determined at a particular point in time, counter-party risk is
dynamic because it changes everyday. Our business units constantly monitor these
relationships by keeping their ears to the ground.
In partnership with Deutsche Bank, Cargill has also has put in a cash management
system in place to pay farmers and traders. Shah says farmers are happy working
with Cargill owing to its prompt payments. They know they dont have to spend
sleepless nights worrying about receiving their money; the money will come on time.
We reach about 2,000 locations all over India. The same cash management system
is also useful for collecting cash from small traders who buy 500 or 1,000 litres of
edible oil from an overall shipment of $30-40 million that is refined and distributed
all over India. Indeed, a lot of Cargills business comes from small traders and
farmers, who deal with it either as suppliers of grain or as consumers of animal feed.
High protein
Anand recalls a recent interaction with farmers at Etawah, UP. Cargill sources wheat,
barley and corn from the district and earlier, farmer queries would be to the tune of,
How do we grow more? How do we get a better price or Why dont you buy our
onions and garlic? This time, though, not only farmers but traders, too, wanted to
know how they could increase milk productivity from the existing 4 litres a
household to 10 litres. We soon realised that milk-buying companies have started
going to interior areas and knocking on the doors of farmers. Milk that used to sell at
12-14 a litre today sells at 36 and has become a good source of secondary income.
Farmers, therefore, are more open to suggestions on what they need to feed their
cattle. And this is where Cargill Indias increased focus on animal feed and nutrition
fits in neatly.
Counter-party risk changes everyday and we constantly monitor it by keeping our ears to the
ground Gopul Shah, treasurer and managing director, Trade Structured Finance
Worldwide, too, this is a priority area for Cargill and in 2011, it beefed up its presence with
the $2.1-billion buyout of global animal nutrition company, Provimi. Within the animal
feeds division, we say that we feed anything that moves. That includes dairy, poultry and
aqua, which, besides fish and shrimps, also include alligators, says Achyuth Iyengar, head,
animal feeds and nutrition. And no, hes not kidding about the alligators: globally, the
company is the No.1 producer of alligator, crocodile and caiman feed; customers include
breeders, zoos and national parks.
Within the animal feeds division, we say that we feed anything that moves Achyuth Iyengar, head,
Animal Feeds and Nutrition
But despite the potential, the animal feeds business has its own challenges. Over 90% of the
18 million metric tonne (valued at 102,000 crore) Indian dairy feed market is unorganised
theres a feed mill at almost every 100 km across India. Most small farmers use this home-
mix of grass fodder and leaves available from such feed mills rather than buy composite feed
sold by the likes of Cargill India.
Growth, therefore, is a function of the pace at which unorganised users switch to
organised and is different across the country. In Punjab, Haryana and Rajasthan, for
instance, adoption rates are much faster because farmers are open to
experimentation, while in Kerala, where there is not much forage, the market has
shifted completely to feed. In Karnataka, Andhra Pradesh and Tamil Nadu, the
switch is lower and it is highest in Gujarat and Maharashtra owing to the presence of
cooperatives. As a start, therefore, Cargill which entered the animal feed business
in 2006 is focusing on markets such as Punjab, Haryana and Rajasthan where
farming practices are progressive and whose farmers are open to suggestions on
increasing yield at a cost.
Broken wheat
ITC leads in the highly fragmented branded atta market
NatureFresh is targeting 5% in its first year of relaunch, ^includes Rajdhani, Silver Coin, Laxmi Bhog, Double Trishul, Hathi, Nimrani etc
; Source: Company
The poultry market is exactly the opposite of the dairy market the 36,000 crore, 15
million metric tonne market is 90% organised; with players such as Godrej Agrovet and
Venkys present, the market has been growing at 8-10% over the past decade. Here, so far,
Cargill has stayed away from integrators who have their own feed mills and is instead
focusing on the backyard farmer who has 500 to 2,000 chickens at a time. Similarly, the aqua
feed market is valued at 9,000 crore and the volume of 1.5 million metric tonne is growing
at 5-6% every year. But where shrimp feed is entirely organised, 70% of the fish feed market
is unorganised as people use de-oiled rice bran or groundnut cake as feed.
Given that all these businesses have different cycles, it is Iyengars task to balance an
up-cycle in dairy with the down-cycle in aqua or poultry. In winter in the North,
from October to April, dairy will have its peak season while for aqua, December to
February is the worst season as temperatures drop, fishes become dormant and dont
eat. As for the poultry business, it depends upon the replacement of chicks, he says.
Such ease with talk of poultry and fish seems incongruous coming from the
vegetarian Iyengar, but hes a veteran who has gone through the rites of passage as
the general manager for the US aqua feed business. Hear it from the man himself:
Picture a vegetarian Indian guy, 510, who goes into a small town of 3,000 people
in southern Louisiana, and meets a 63 Texan sales manager and a 61 African-
American production manager. It is a culture where boiled crayfish with onions and
potatoes is considered a delicacy. I had to eat that as a way of showing acceptance
and solidarity.
Routine animal feeds business, though, is devoid of any such excitement, even
though 80% of the 300 employees in Iyengars team are under 35. Milking happens
at 5 am. So, the employee needs to get up at 4 am and head out on his motorbike to
collect milking statistics. Or you need someone to go out in 40-45 degree heat to a
shrimp farm and test the pH and ammonia levels and advise the shrimp farmer on
what to do that day, says Iyengar, explaining the team composition.
Aqua feed, especially, is a complex business, he adds: unlike for a buffalo or a chicken
where you can see the feed being eaten, in aqua you do not know how much of the
feed was actually consumed. You have to be completely sure of what you are doing;
otherwise, because you could ruin that farm, he adds. For now, times are good. This
year shrimp farmers in Andhra Pradesh, which accounts for 70% of the market, are
having a whale of a time as a disease outbreak (early mortality syndrome) in China,
Thailand and Vietnam has taken supplies off the market. Consequently, shrimp
prices are at a 12-year high, and with it farmer delight too. As it happens, apart from
animal feeds, branded staples is the only business where Cargill India connects
directly with consumers and has big plans.
Home bound
When it came into India, Cargill clearly had the global expertise but not the assets or
the brands. Today, its foods business clocks a turnover of about 4,500 crore,
3,000 crore of which is edible oil sales to retail consumers and about 1,500 crore
is institutional sales, which includes flour, sugar, edible oil, ingredients etc. Most of
its institutional customers for edible oil and flour were in the food space and since
most foods have an element of oil or flour, Cargill decided to enlarge its footprint by
moving into the consumer space.
That was an unusual step for the multinational as we mentioned earlier, only in
three markets does Cargill have a consumer-facing presence; the nearly 150-year
parent is largely a non-consumer facing agribusiness company and has so far shown
a decided preference for remaining so. So, what explains the divergence from the
norm? The major reason for the move was that most food in India is consumed at
home. Most developed countries consume a high amount of processed foods: bread,
pasta, noodles, pre-cooked bakery stuff or vegetables or meat that has been
conditioned or seasoned. In India, in contrast, everything comes in pretty much
fresh, be it meat or vegetables. Granted, processed foods are now making inroads but
the base is minuscule and biscuits and snacks still constitute the biggest chunk. As
the market is so consumer driven, we could not have attained significant scale just
through the B2B model. We had to include the consumer and that is why B2C
became important here, explains Chaudhry.
Theres another reason. By its very nature, a commodity business is low margin;
therefore, a high throughput does not necessarily mean a steroid-powered
bottomline. That is clearly visible in the case of Cargill India, where the net margin is
estimated to be around 1% to 2%. Cargills quality is comparable with leader Adani
Wilmar but even while its capacity has increased, its volume in India has not
increased commensurately for a global player of its size, points out GGN Researchs
Patel. While Patel thinks Cargill should step up its brand building and marketing
efforts, the company has been precisely doing that for the past couple of years. But
when it initially entered the consumer space, there was one major problem. Since the
decision was a move away from the parents traditional focus on institutional
customers, there was no template to draw from. Cargills consumer focus in India,
therefore, has been an exercise in trial and error.
Cargills capacity has increased but its volume in India has not increased for a global player of its
size Govindbhai Patel, co-founder, GGN Research
The first step into the branded staples space was with the launch of NatureFresh atta in 2001.
Cargill was one of the earliest entrants in the space but didnt have enough conviction to take
advantage of its first mover status. By 2004, the company had withdrawn its brand from the
market.
Recollects Viraraghavan S, director, sales and marketing, The parent asked us to
step back and look at it in an integrated manner and that is why we continued with
the NatureFresh brand in the edible oils space, which was familiar to Cargill. On his
part, Chaudhry says, In hindsight it was a mistake to get out of the atta business. It
would have been better if only we could have sustained it a little longer. We gave up a
little sooner than we should have.
The strategy adopted for growing branded edible oils, though, was inorganic. In
2005, Cargill took full control of its joint venture with Pune-based Parakh Foods,
bringing the Gemini brand into its fold. Since then, it has made three more
acquisitions, including Rath, Sweekar and Sunflower. Exact numbers arent
available, but all Cargill acquisitions have been reported to be in the 40 crore to
300 crore range.
Most branded edible oil companies are using the perception of health to sell. As a
consequence, olive oil is considered the healthiest, or sunflower is considered
healthier than soyabean or palm oil and vanaspati comes at the bottom of the heap. In
such a scenario, why has Cargill acquired not one but two vanaspati brands (Rath and
Sunflower)? Chaudhry says, Our strategy has really been about building access
before assets. Building assets here also means buying access. That has been one of
the drivers behind buying brands, which means I get access immediately.
But isnt vanaspati a dying category? Chaudhry justifies, We sell about 10,000 tonne
a month of vanaspati and the biggest selling market for Rath is North India. It is the
only branded palm oil and links in well with our existing plant at Kandla. Sweekar
and Sunflower are Maharashtra brands. While Sweekar is national, its largest sales
happen in Maharashtra. The Sunflower brand is available in South and West India,
but its largest sales, too, happen in Maharashtra. Given our large share in
Maharashtra through Gemini, those two brands became a natural fit.
Importantly, Cargill has picked brands with a strong regional presence, a clear
indicator of its current B2C strategy: grow the market one region at a time. Its a
strategy that competitors, too, have taken note of. Cargill has good sourcing
capabilities backed by good manufacturing practices. It has acquired a few regional
brands and that seems to be its growth strategy, says Adani. But he is not sitting
tight either. Along with value-added oleochemical products, we have further
improved our product mix by offering high value products such as Fortune rice bran
and diversified into agri products such as rice, besan, pulses, soya nuggets etc, adds
Adani.
Cargill has acquired a few regional brands and that seems to be its growth strategy Pranav Adani,
managing director, Adani Wilmar
Cargills strategy maybe regional but it has got three-fourths of the country covered. It sells
soyabean, mustard and palm oil under the NatureFresh brand in North, Central and East
India. And through its sales team of 300 executives and 1,500 distributors, Cargills branded
edible oils such as Gemini and Sweekar, as well as vanaspati brands Rath and Sunflower are
available at 250,000 outlets across India. Its presence in South India, though, is weak both in
terms of assets as well as distribution. Through Gemini, it does have a presence in Karnataka
but is nearly absent in Andhra Pradesh, Tamil Nadu and Kerala. Chaudhry explains this
vacuum. We have refrained from investment in the South due to overcapacity but will assess
the opportunity at an appropriate time.
Cargill has re-entered the branded atta business as well. The current
branded atta market is valued at 4,000 crore and accounts for about 3% (2 million
tonne) of the overall attamarket (64 million tonne) by volume. But its also a very
crowded market with several national and regional players. So, why the comeback?
Because now we have a distribution network for branded edible oil and the cost of
putting another category onto that distribution network is much lower, says
Chaudhry.
Branded atta makers target users seeking convenience, but 90% consumers still prefer chakki atta
Viraraghavan S, director, Sales and Marketing
And this time round, the company is relying on a clear differentiator to stand out
its atta has the coarse chakki atta(mill flour) feel that will appeal, Cargill believes, to most
unbranded atta users. All branded atta offerings are targeting users seeking convenience, but
90% of the population still buys chakki atta. Other brands do not have that touch and feel and
we have been able to mimic that, says Viraraghavan. Having launched nationally in August
2013, the company is targeting a 5% market share in the first year. As it happens, flour is a
big part of Cargills institutional foods business as well.
Launch enabler
About 1,500 crore of Cargills food revenue comes from its institutional customers.
On offer is a range that extends from something as basic as palm oil to a patented
cholesterol-reducing ingredient. The client list includes names such as Britannia,
Parle, Pepsi, Coke and McDonalds, and Cargill supplies various ingredients to all of
them. For a company that manufactures noodles, for example, some of the flour, the
oil and texturiser could be from Cargill; in a chocolate, the fat could be from Cargill;
while in a biscuit, the flour and fat could be from the company.
No heavy lifting
Cargill has pursued growth using an asset-light strategy
Industry estimates*; Source: Company unless stated
Large customers such as Parle or MNCs such as Nestl and Kraft were saying, You do so
much for us in other parts of the world, why arent you supplying us more than edible oils
here?, says Viraraghavan. Consequently, the food ingredients business was started in 2010.
Now, says Viraraghavan, Cargill is developing a back-end for its customers so they launch
their entire range of products in India. For instance, unless Kraft is supplied specialised flour,
it cannot launch its complete portfolio of high-end cookies and snacks in the country.
Similarly, a Minute Maid variant in the US is co-patented with Corowise, a Cargill-patented
cholesterol-reducing ingredient.
Cargill is also sensing a growth opportunity in helping its MNC customers deal with
rising input costs. Several consumer food brands have grown on the back of very
aggressive price points, at 2, 5 or 10. Now they are stuck with those price points
and are looking at reformulating the products to preserve their gross margins, says
Viraraghavan.
Lowering the cost of formulation plays to Cargills strength as it requires knowledge
across ingredients across a variety of products. One hitch, though. Is there not a limit
to doing that? After all, costs have gone up across the board and the health angle may
come into play once ingredients are tinkered with. Viraraghavan believes there
should not be much of an issue. Though the price difference is huge, it is possible to
replace cocoa butter with vegetable fat without compromising on the taste or health
aspect. But some of our reformulation may require different labelling so that the
consumer is free to decide wisely. Chaudhry is confident that rising food ingredient
sales and growth of the consumer business will lead to more profit stability.
Point of fruition
Cargill has continually tailored its approach to suit the fragmented Indian market.
Hence, it has a diversified sourcing footprint and operates off a relatively short
supply chain. Its facilities, too, are located closer to the raw material point or where
the customers are. Cargill has three refineries at Paradeep, Kandla and Kurkumbh
with a total capacity of 3,750 tonne per day. It is now expanding capacity by 1,000
tonne per day at the Kandla refinery.
This thinking has also gone into the $100-million investment at Davangere,
Karnataka, where it is setting up a corn milling plant with a capacity of 800 tonne
per day. Chaudhry says, Cargill is one of the biggest buyers and exporters of corn
from Karnataka. We have a very good understanding of where good corn is produced
and how to handle it. The company is setting up a greenfield unit instead of
acquiring one because most corn milling plants in India have been set up for
supplying starches to the paper and textile industry, not to serve the food industry.
As it has amply demonstrated, Cargills core strength is moving commodities across
and within geographies. Its great sourcing skills are equally matched by timely
delivery. Chaudhry says as margins shrink with increasing competition, supply chain
efficiency will become even more critical. Our back-end is an inheritance but we
have also built a reasonably well front-end. Given that combination, we are very well
placed for the future. Cargill is already part of our lives, every time we buy some
processed food item. If the company has its way, as the years roll by, it will be hard
for you to go into a kitchen or restaurant without touching something that Cargill
India has processed.
MCG major Marico Limited is going to focus on "in between healthy foods" and
expand the Saffola brand of premium edible oils and oat as a part of its three-year
growth strategy.
I want to concentrate on food today which is planned food, which is aligned with
our distribution, said Saugata Gupta, Managing Director and Chief Executive
Officer of Marico, in an interview with Livemint.
Marico, one of the Indias biggest packaged consumer goods companies, is best
known for parachute oil and the Saffola brand. The company had been looking to
expand products under the packaged goods category.
The reason I am saying in-between healthy foods is because that is still a modern
trade, metro distribution business, in line with Saffola, Gupta told Livemint,
adding consumers often indulge in these healthy planned meals around 11 am and
6 pm.
Gupta said he would like Marico to focus on expanding the Saffola brand of
premium edible oils and oats to extend the food business.Ultimately, Saffola is a
brand that has a huge health connotation, he said.
In May, Gupta had identified super-premium edible oils (Saffola Aura), male
grooming (Set Wet, Beardo), and food (Saffola) as segments that would drive the
companys growth in the next three years.
The expansion strategy is limited to the above segments considering the Marico's
interest to expand only its core products.
What are the kinds of food a Saffola consumer eats? You will have breakfast
cereals, you will have healthy snacking. If I had gone into Saffola juices,
hypothetically, it would have been a very good opportunity. But the moment five
players get into a business, you cant make money in it, Gupta explained.
Gupta further clarified that Marico is not looking to build a mass foods business,
which is driven by volume growth.
I dont see myself getting into either impulse food or commodities, say staples,
because they need a different business model, he told Livemint, adding that the
biggest (sales) channels for snacking and impulse items are small local shops
where Marico does not reach at the moment.
Market analysts feel that the selection of the area of expansion within the markets
plays an important role.
Several companies have been trying to crack the packaged foods market but no
one has been able to become very big, Sachin Bobade, senior analyst at Dolat
Capital told Livemint.
It all comes down to the category you pick in the food business, Bobade added.
The personal care products and large scale food business follows two different
business model. Amidst Marico's expansion to food business, Gupta said, "It is not
easy to run a personal care and large scale food business because they are two
different business models.
However, Marico's plan is to take small steps in achieving the goal. I dont
have an ambition of having a Rs 5,000 crore food business. Our first
destination is to do Rs 200 crore, because Rs 200 crore is break-even,
Gupta added.
trategic Plan Development
Previously, you addressed where you are and where you are going. Now, you will
focus on how you will get there. Use your SWOT to stay grounded and realistic as
you build a roadmap from where you are today to where you want to be. As you
develop your strategy and set your goals, make strategic choices about what to do
and not to do. Remember that being strategic is about making those hard choices.
A mark of a good strategic plan is one that is clear and focused (not too many goals
and objectives), as well as balanced telling a strategy story about how your whole
organization is linked and aligned to drive key performance indicators.
Spend some time uncovering your competitive advantages based on an
understanding of your strategic position. Your competitive advantages are the
essence of your strategic plan because strategy is about being different. It is
deliberately choosing to perform activities differently or to perform different
activities than competitors to deliver value to your customers.
Eliminate any confusion around semantics by using these definitions:
Strategies: The route you intend to take and the general methods you intend to use to reach
the top of that specific mountain.
Long-Term Strategic Objectives/Priorities: Intermediate objectives to the top of the mountain.
If you have a 5-year vision, these would be 3- to 4-year intermediate objectives on the way up
the mountain.
Short-Term Goals and Actions: Specific moves for climbing the sections of rock and ice that
confront you right now. These would be analogous to detailed annual plans for getting things
done this year on the way to the 3-year objective.
Phase Duration
2 weeks
Question to Ask
What is our base for competing and delivering value?
What are we best at? What makes us unique?
What are the big rocks strategic objectives we need to reach our vision?
Data Needed
SWOT, competitive advantages list, customer data
Outcomes / Deliverables
Drafted competitive advantages
Organization-wide strategies
Financial projections
Action Grid
Who is Tools & Estimated
Action
Involved Techniques Duration
*To access the worksheets under Tools & Techniques please refer to our Strategic Planning Kit for Dummies.
OnStrategy is the leader in strategic planning and performance management. Our cloud-based
software and hands-on services closes the gap between strategy and execution. Learn more
about OnStrategy here.
The SWOT analysis helps you get a better understanding of the strategic alternatives and choices
that you face. It helps you ask, and answer, the following questions of how do you:
If your team wants to take the next step in the SWOT analysis, apply the TOWS
Strategic Alternatives Matrix to help you think about the options that you could
pursue. To do this, match external opportunities and threats with your internal
strengths and weaknesses, as illustrated in the matrix below:
TOWS Strategic Alternatives Matrix
External
External Threats (T)
Opportunities (O)
SO Advantage ST Protective
Strategies: Strategies Strategies: Strategies
Internal Strengths (S) that use that use
strengths to maximize strengths to minimize
opportunities. threats.
WO Conversion
WT Defensive
Strategies: Strategies
Strategies: Strategies
that minimize
Internal Weaknesses (W) that minimize
weaknesses by taking
weaknesses and
advantage of
avoid threats.
opportunities.
*To access the worksheets under Tools & Techniques please refer to our Strategic Planning Kit for Dummies.
Evaluate the options youve generated, and identify the ones that give the greatest
benefit, and that best achieve the mission and vision of your organization. Add
these to the other strategic options that youre considering.
Keep in mind that the strategic objectives establish should connect your mission to
your vision. These objectives are long-term (think 3-5 years), continuous strategic
areas that get you moving from your mission to achieving your vision. Ask
yourself what the key activities are that you need to perform in order to achieve
your vision. We encourage you to create strategic objectives in four key areas
Financial/Mission, Customer, Internal/Operational, and People/Learning.
*The Balanced Scorecard was introduced by Robert Kaplan, a Harvard Business
School professor, and David Norton, the founder and president of Balanced
Scorecard Collaborative, Inc., in the early 1990s as a new way to work with
business strategy. Today, over half of the Fortune 1000 companies in North
America are using the Balanced Scorecard, which has become the hallmark of a
well-run organization.
Examples
Improve or institute a sales process, increase close rate, increase lead generation.
Improve brand management through consistent use of
Org-Wide Goals and Measures Once you have formulated your strategic
objectives, you should translate them into goals and measures that can be clearly
communicated to your planning team (team leaders and/or team members). You
want to set goals that convert the strategic objectives into specific performance
targets. Effective goals clearly state what, when, how, and who, and they are
specifically measurable. They should address what you need to do in the short-term
(think 1-3 years) to achieve your strategic objectives.
For maximum effectiveness, goals must state how much of what kind of
performance and by when it is to be accomplished. This is where it pays off
to think SMART when creating goals.
Remember this simple acronym to guarantee your goals are:
Specific: Goals need to be specific. Try to answer the questions of How much and What kind
with each goal you write.
Measurable: Goals must be stated in quantifiable terms, or they are only good intentions.
Measurable goals facilitate management planning, implementation, and control. For example,
a measure might be # of new customers or % complete and a target might be 500 or
100%, respectively.
Attainable: While goals must provide a stretch that inspires people to aim higher, they must
also be achievable, or they are a set-up for failure. Set goals you know you, your organization,
and your employees can realistically reach.
Responsible person: Goals must be assigned to a person or a department. But just because a
person is assigned a goal doesnt mean that she is solely responsible for its achievement; they
just need to be the point person who will ensure the goal is achieved.
Time specific: With reference to time, your goals must include a timeline of when they should
be accomplished.
Take A Tour
Editors note: Due to popular demand this article has been updated as of
August 3, 2017, with an additional 13 bonus KPIs. Be sure to check them
out below!
Customer Metrics
8. Customer Lifetime Value (CLV): Minimizing cost isnt the only (or
the best) way to optimize your customer acquisition. CLV helps you
look at the value your organization is getting from a long-term
customer relationship. Use this performance indicator to narrow down
which channel helps you gain the best customers for the best price.
9. Customer Acquisition Cost (CAC): Divide your total acquisition
costs by the number of new customers in the time frame youre
examining. Voila! You have found your CAC. This is considered one
of the most important metrics in e-commerce because it can help you
evaluate the cost effectiveness of your marketing campaigns.
10. Customer Satisfaction & Retention: On the surface, this is
simple: Make the customer happy and they will continue to be your
customer. Many firms argue, however, that this is more for
shareholder value than it is for the customers themselves. You can
use multiple performance indicators to measure CSR, including
customer satisfaction scores and percentage of customers repeating
a purchase.
11. Net Promoter Score (NPS): Finding out your NPS is one of
the best ways to indicate long-term company growth. To determine
your NPS score, send out quarterly surveys to your customers to see
how likely it is that theyll recommend your organization to someone
they know. Establish a baseline with your first survey and put
measures in place that will help those numbers grow quarter to
quarter.
12. Number Of Customers: Similar to profit, this performance
indicator is fairly straightforward. By determining the number of
customers youve gained and lost, you can further understand
whether or not you are meeting your customers needs.
Download the full list:
53 Customer KPIs and Scorecard Measures
Process Metrics
13. Customer Support Tickets: Analysis of the number of new
tickets, the number of resolved tickets, and resolution time will help
you create the best customer service department in your industry.
14. Percentage Of Product Defects: Take the number of
defective units and divide it by the total number of units produced in
the time frame youre examining. This will give you the percentage of
defective products. Clearly, the lower you can get this number, the
better.
15. LOB Efficiency Measure: Efficiency can be measured
differently in every industry. Lets use the manufacturing industry as
an example. You can measure your organizations efficiency by
analyzing how many units you have produced every hour, and what
percentage of time your plant was up and running.
People Metrics
16. Employee Turnover Rate (ETR): To determine your ETR,
take the number of employees who have departed the company and
divide it by the average number of employees. If you have a high
ETR, spend some time examining your workplace culture,
employment packages, and work environment.
17. Percentage Of Response To Open Positions: When you
have a high percentage of qualified applicants apply for your open
job positions, you know you are doing a good job maximizing
exposure to the right job seekers. This will lead to an increase in
interviewees, as well.
18. Employee Satisfaction: Happy employees are going to work
harderits as simple as that. Measuring your employee satisfaction
through surveys and other metrics is vital to your departmental and
organizational health.
Download the full list:
33 HR KPIs & Scorecard Measures
Customer Metrics
5. Customer Churn Rate: This metric indicates the percentage of
customers that either fail to make a repeat purchase or discontinue
their service during a given period. Formula: (Number of Customers
Lost in a Given Period) / (Number of Customers at the Start of the
Period) = (Customer Churn Rate). Make sure you look at the number
of customers that should have renewed during that period.
6. Contact Volume By Channel: Keeping track of the number of
support requests by phone and email allows you to see which
method customers prefer, as well as the number of support requests
month-to-month.
7. Percentage Of Customers Who Are Very Or Extremely
Satisfied: Determining this metric opens up an opportunity for further
surveying what makes happy customers so satisfied. This is also a
good measure to look at over time, so keep your questions consistent
on your surveys. Formula: (Customers Who Consider Themselves
Very or Extremely Satisfied) / (Total Survey Respondents) =
(Percentage of Customers Who Are Very or Extremely Satisfied).
8. Number Of New Vs. Repeat Site Visits: Allows companies to
differentiate their website traffic and generate insights on prospective
customers. Formula: (Website Visits by New Visitors) / (Total
Website Visits) = percent of new visitors.
Financial Metrics
9. Cash Flow From Financing Activities: This metric demonstrates an
organizations financial strength. Formula: (Cash Received from
Issuing Stock or Debt) (Cash Paid as Dividends and Reacquisition
of Debt/Stock) = (Cash Flow from Financing Activities).
10. Average Annual Expenses To Serve One Customer: This is
the average amount needed to serve one customer. Formula: (Total
Expenses) / (Total Customers) = (Average Annual Expenses to
Serve One Customer).
11. EBITDA (Earnings Before Interest, Taxes, Depreciation, &
Amortization): Measures revenue after expenses are considered
and interest, taxes, depreciation, and amortization are excluded.
Formula: (Revenue) (Expenses Excluding Interest, Tax,
Depreciation & Amortization) = (EBITDA).
12. Innovation Spending: This metric shows the amount of
money that an organization spends on innovation. Some
organizations have this budgeted as research and development, and
others have different accounting terms. Ultimately, if you use this
measure, you are valuing innovation as a key strategic thrust.
13. (Customer Lifetime Value) / (Customer Acquisition Cost):
The ratio of customer lifetime value to customer acquisition cost
should ideally be greater than one, as a customer is not profitable if
the cost to acquire is greater than the profit they will bring to a
company. Formula: (Net Expected Lifetime Profit from Customer) /
(Cost to Acquire Customer).
How Do I Determine Which KPIs
To Use?
The right KPIs for you might not be the right KPIs for another organization.
Make sure youve researched as many key performance indicators as you
can to determine which ones are appropriate for your industry. From there,
determine which KPIs will help you further understand and meet your
goals, and then integrate them throughout your department. KPIs should
match your strategy, not just your industry.
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This list of strategic objective examples should help you think through the
various types of objectives that may work best in your organization. Youll
find all 56 of them categorized below by perspective and/or theme. Lets
dive in!
Customer Objectives
Customer objectives are typically written like customer goals. Sometimes
they are written in the form of a phrase or a statement that a customer
would say when talking about your product or service.
11. Best value for the cost: This means that your customers
know they are not purchasing the most expensive product or
serviceor even the highest qualitybut that they are getting the
best deal. This may mean your customers are paying less than
average and getting an average or above-average product.
12. Broad product offering: This objective works if your strategy
is to be able to offer the customer the best product in its class,
regardless of price. In the hotel industry, for example, this could
reflect the strategy of the Four Seasons or Ritz Carlton.
13. Reliable products/services: If your organization takes pride in
the reliability of your product or service, this objectivewhich reflects
that you are targeting customers that also value this reliabilitymay
be right for you. This could indicate the on-time reliability of an airline
or the dependable reliability of a printer that generates high-quality
output.
14. Cross-sell more products: Some organizationslike banks
or office product companiesfocus on selling more products to
the same customers. This strategy acknowledges that you already
have the customer but can make money by selling them more.
15. Increase share of market: This customer strategy focuses on
selling to more customers, thus increasing the market share. For
example, if your organization is a landscape company, you are likely
trying to reach more householdsor if your organization is a hospital,
you likely want more of the local population to use your services.
16. Increase share of wallet: This customer strategy focuses on
gaining more purchases from the same customers. If you sell
fertilizer, for example, you want each customer to purchase a larger
percentage of their fertilizer spend with your organization rather than
with your competitors.
17. Partner with customers to provide solutions: This strategy
reflects customer intimacy. As part of this strategy, you may deliver
service-oriented solutions or have customers participate in research
and development with your organization. Partnering comes at a cost
but tends to foster more customer loyalty across your organization.
18. Best service: This strategy indicates you want your customers
to consider your organization easy to deal with. Customers may
choose to work with you even if you have a product similar to your
competitorssimply because your service is better.
19. Understands my needs: This objective also reflects a
customer intimacy strategy. The customer feels like you understand
their needs, so they choose your organizations products and
services because they are targeted for their specific problem or
situation.
Internal Objectives
The internal perspective is typically focused on processes that your
organization must excel at. According to Michael Treacy and Fred
Wiersemawho have written extensively on the topicthese processes
can be divided into three areas: innovation, customer intimacy, and
operational excellence.
Innovation
20. Most innovative products/services: This objective is for
organizations that pride themselves on constant and cutting-edge
innovation. You would first need to define what you mean by
innovation and how youre innovating in each particular area.
21. Differentiate the product: Your organization might use this
objective if you are in an environment where the customer cannot tell
the difference between your organization and another organizations
product. You are asking your organization to either develop new
services around the product or new differentiating features of the
product or service.
22. Invest a certain amount in innovation: Sometimes
organizations use an objective like this to drive investment in
research and development or other innovative activities. This
objective may be used in a strategy when you are signaling a shift in
investments in the innovation category.
23. Grow percentage of sales from new products: Similar to
investing in innovation, this objective focuses on the outcome your
organization is hoping to achieve. It forces you to constantly
innovate, even on your most successful products.
24. Improve or focus research and development (R&D): This
objective focuses on specific innovation. If you are an organization
with multiple product lines, you might want to focus your innovation
on one product line over another; calling out the specific direction can
be quite helpful in your objective.
25. Acquire new customers from innovative offerings: This
objective focuses on the reasonyou put focus on innovation. For
example, you may be innovating in order to enter a new market or
attract customers you might not be able to reach with your current
offerings.
Customer Service
26. Great customer service: Defining what great customer
service means in your organization is a way to set the standard and
communicate internally. For example, hone in on whether you want
to provide one-touch resolution or proactive support, or whether
youre focused on phone support or on-site support.
27. Improve customer service: When your organization has a
problem with good customer service, you may want an objective to
focus on improvement therein. The problem your company has is
likely in a specific area, so this objective should be focused on that
particular call center or the reactive support that you provide.
28. Invest in customer management: This objective is typically
used when your strategy is to focus more on your customer
management processes than you have in the past.
29. Partner with customers to design solutions: Some
organizations focus on forming close partnerships with their clients. If
your business is an architectural firm or a custom software developer
company, this could be a good objective to ensure you are working
with your customers to design critical solutions.
30. Improve customer satisfaction: If customer satisfaction is
critical in your company, this may be a good objective to hone in on.
Because its generic, the definition for your organization needs to be
more focused around particular areas of satisfaction you place focus
on.
31. Improve customer retention: If your organization wants to
focus on retaining current customers, this objective may work for you.
Youd likely want to set measures and projects around certain
activities to help retain customers.
32. Develop and use a customer database: This is a specific
objective focused on implementing a large project like a customer
relationship management (CRM) system, that could take years to
implement.
Operational Excellence
33. Reduce cost by a certain amount annually: This objective
focuses on reducing coststypically costs within a product or service
that is an offering (to make that particular product or service more
effective). It could also focus on reducing overhead costs across your
organization.
34. Reduce waste by a certain amount: If your organization uses
a lot of raw materials, a typical objective is to reduce waste from that
process. This usually results in significant cost savings.
35. Invest in Total Quality Management: Total Quality
Management (TQM) reflects a process around quality improvement,
which can mean doing things more efficiently or effectively. This
objective is used in organizations that have implemented (or are
implementing) TQM.
36. Reduce error rates: This objective applies for organizations
that have many repeatable processes. Sometimes this results in Six
Sigma projects, and other times the result is just a focus on defining
processes so that staff can adhere to these processes.
37. Improve and maintain workplace safety: If your organization
uses heavy equipment, chemicals, mechanical parts, or machinery,
focusing on workplace safety is a good objective. Improving it can
reduce costs and improve job satisfaction.
38. Reduce energy usage per unit of production: If your
organization uses a significant amount of energy, making a goal to
reduce this can be an effective and important strategy.
39. Capitalize on physical facilities: In retail organizations, this
could mean focusing on an appropriate storefront location. Or it could
mean finding underutilized assets and either using them or
selling/leasing them to others for use.
40. Streamline core business processes: Many complex
organizations have very long, drawn-out processes that have
developed over many years. If your organization is looking at these
processes, this could be a key objective for you.
41. Increase reliability of operations: If your organization has
poor reliability, having an objective like this will encourage
management to look at investments and changes in processes that
could increase this reliability.
Regulatory (Optional)
42. Ensure compliance: In a regulated environment, there may be
a lot of rules that you need to follow, even if they dont seem
strategic. They are often called strategic objectives to ensure no
one cuts corners.
43. Increase recycling: This is a self-explanatory objective, but
can sometimes apply to all aspects of waste. Depending on the
organization, there are compliance rules around making this happen.
44. Improve reporting and transparency: Organizations just
entering a regulatory environment or that are trying to change their
business model to meet contract needs may find that they need to
improve or change the way they report in order to do better cost
accounting or just be more clear about their actions.
45. Increase community outreach: For some organizations, it is
important to be seen as part of the community. This is especially true
for organizations that are either selling a necessity in the community
or are creating any kind of negative externality (like pollution).
46. Optimize control framework: If youre a regulated
organization in an incentive environment, you may need to make
sure you have the proper controls in place to avoid one-off or
systematic cheating.