Documente Academic
Documente Profesional
Documente Cultură
DEVELOPING A
STRATEGIC BUSINESS
PLAN
Strategic Planning
…is the managerial process of
developing and maintaining a strategic
fit between the organization's
objectives and resources and its
changing market opportunities.
Changing Environment
The Role of Strategy
Corporate Strategy:
Mission & •Corporate Operating
Objectives •Business Plans
•Functional
Vision and Strategy
Sun Tze on Strategy
SWOT Analysis
Strategy
Implementation
+ +
• How does your current • What are the expected
Internal business emphasis fit Financial financial returns of your
assessment with industry projections strategy?
opportunity and
competitive +
landscape?
Risk/contingen- • What strategic alternatives
cies & strategic have you considered?
alternatives
The Usual Business Planning
Hierarchy
Vision
Mission
Objectives
Strategies
Tactics
Plans
Strategic Planning – Many Sub
Plans
Vision Mission
Strategic
Plan
State Sales
Plans
Vision is a Critical Driver
To succeed in the long
term, our business
VISION
needs a vision of how
we will change and
Consistently
improve in the future. Provides future
followed and
direction
measured
―without a vision, the
people perish‖
The vision of the
business gives its
energy. Must be fully
Expresses a
consumer
◦ It helps motivate us. communicated
benefit
◦ It helps set the
direction of corporate
and marketing
strategy.
Is motivating Is realistic
Values underpin all we do
Values form the foundation of a business’ management style.
Values provide the justification of behaviour and, therefore, exert significant influence on
marketing decisions.
An example is provided by BT Group - defining its values:
BT's activities are underpinned by a set of values that all BT people are asked to
respect:
◦ We put customers first
◦ We are professional
◦ We respect each other
◦ We work as one team
◦ We are committed to continuous improvement.
These are supported by our vision of a communications-rich world - a world in which
everyone can benefit from the power of communication skills and technology.
A society in which individuals, organisations and communities have unlimited access to
one another and to a world of knowledge, via a multiplicity of communications
technologies including voice, data, mobile, internet - regardless of nationality, culture,
class or education.
Our job is to facilitate effective communication, irrespective of geography, distance, time
or complexity.
Source: BT Group plc website
Has the Company got a strong
Clear Mission?
The Business Mission
is important to our
PURPOSE – why
sales & marketing the business exists
planning
It provides an outline of
how the marketing plan
should seek to fulfil the
mission STRATEGY & VALUES &
SCOPE – what CULTURE – what
It provides a means of business are we in management
evaluating and screening and how? believes in
the marketing plan; are
marketing decisions
consistent with the
mission?
STANDARDS &
It provides an incentive to BEHAVIOUR – the
rules that guide
implement the marketing how we operate
plan
"Strategy is the direction and
scope of an organisation over
the long-term: which achieves
advantage for the organisation
through its configuration of
resources within a challenging
environment, to meet the
needs of markets and to fulfil
stakeholder expectations".
Strategic Audit
- ensuring that the Company resources and
competencies are understood and evaluated
Resource Audit
Performance Analysis
Portfolio Analysis
• Existing Funds
• New Funds
Physical
• Production
• Marketing
• Sales
• R&D & Technical
• Information Technology
Human
• Existing Staff
• Future Staff Requirements
• Training & Development
Intangible
• Goodwill
• Reputation
• Brands
• Intellectual Property
Objectives - Corporate &
Functional
• Examples might include:
Primary Description
Activity
Inbound All those activities concerned with receiving and storing externally sourced
logistics materials
Operations The manufacture of products and services - the way in which resource inputs
(e.g. materials) are converted to outputs (e.g. products)
Outbound All those activities associated with getting finished goods and services to buyers
logistics
Marketing and Essentially an information activity - informing buyers and consumers about
sales products and services (benefits, use, price etc.)
Service All those activities associated with maintaining product performance after the
product has been sold
Support Activities
Support activities include:
Secondary Description
Activity
Procurement This concerns how resources are acquired for a business (e.g. sourcing
and negotiating with materials suppliers)
Human Resource Those activities concerned with recruiting, developing, motivating and
Management rewarding the workforce of a business
Infrastructure Concerned with a wide range of support systems and functions such as
finance, planning, quality control and general senior management
Steps in a Value Chain Analysis
Provides potential The key core competencies are those that enable the creation of new
access to a wide products and services.
variety of markets
Makes a significant Core competencies are the skills that enable a business to deliver a
contribution to the fundamental customer benefit - in other words: what is it that causes
perceived customer customers to choose one product over another? To identify core
benefits of the end competencies in a particular market, ask questions such as "why is the
product customer willing to pay more or less for one product or service than
another?" "What is a customer actually paying for?
Broad
Target Cost
Differentiation
Leadership
Scope
Differentiation
Narrow Cost Focus
Target Focus
Other Characteristics of
Competitive Advantage
Substantiality
◦ Is it substantial enough to make a
difference?
Sustainability
◦ Can it be neutralized by competitors
quickly?
Ability to be leveraged into visible
business attributes that will influence
customers
(Source: Strategic Marketing Management, Aakers)
Seeking Competitive Advantages
Positions of advantage
◦ Superior customer value
◦ Lower relative total cost
Performance advantages
◦ Customer satisfaction, Loyalty, Market
Share, Profit
Sources of advantages
◦ Superior skills & knowledge, Superior
resources, Superior business process
WHERE TO COMPETE?
Target customers and segments
• Which customers are you trying to target or attract?
• Which are you willing to serve, but will not spend
resources to attract?
• Which would you prefer not to serve?
Customers
Geographical scope
of business activities How does the entity
• Geographic limits to the reach its target
business? Geographic customers
• Local, regional, multi- Channels
markets • Which distribution channels
local, national,
will you use?
international, or global
• What customer segments
player?
can they reach?
• If local, which localities?
Products
Brand/reputation • Coca-Cola
Segments
BU Overall A B C
Physical asset
Location/"space"
Privileged
assets Distribution/sales network
Brand/reputation
Necessary
capabilities in Patent
order to
succeed in the Relationship with "license"
industry allocator
Innovation
Cross-functional
Distinctive coordination
competencies
Market positioning
Cost/efficiency
management Talent
development
Step 2: Assess your overall position relative to
Step 1: Ensure that these are the
the capabilities required to succeed in the industry.
capabilities required to succeed in the
Also, determine if these capabilities are relevant to
industry. Use this list as a thought
the segments you serve
starter, add and delete as you see
appropriate
Competitor capability comparison
Competitors
BU Overall A B C
Physical asset •
•
Location/"space"
Privileged
•
assets Distribution/sales network •
Brand/reputation
Necessary
capabilities Patent
in order to
succeed in Relationship with "license"
the allocator
Innovation
industry
Cross-functional
Distinctive coordination
competencies
Market positioning
Cost/efficiency
management Talent
development
New Market
Entrants
Supplier Competitive
Buyer Power
Power Rivalry
Product &
Technology
Development
Porter 5 Forces
Porter’s 5 Forces of Competitive
Position version #2
Porter’s 5 Forces of Competitive
Position #3 Entry Barriers
Economies of Scale
Brand Identity
Capital Requirements Rivalry Determinants
Industry Growth
Fixed Costs
New Product Differences
Determinants of Supplier Power Entrants Brand Identity
Switching Costs Exit Barriers
Supplier Volume
Impact
Forward Integration
Industry
Competitors
Suppliers Buyers
Intensity
of Rivalry Determinants of Buyer Power
Buyer Concentration
Determinants of Buyer Volume
Substitution Threat
Backward Integration
Relative Price
Performance Substitutes
Switching Costs
Forces at work framework
1. Determinants of supplier power 2. Determinants of barriers to entry
• Differentiation of inputs • Economies of scale
• Switching costs of suppliers and firms in the • Proprietary product differences
industry • Brand identity
• Presence of substitute inputs • Switching costs
• Supplier concentration • Capital requirements
• Importance of volume to supplier • Access to distribution
• Cost relative to total purchases in the industry 2. New entrants • Absolute cost advantages
• Impact of inputs on cost or differentiation – Proprietary learning curve
• Threat of forward integration relative to threat – Access to necessary inputs
of backward integration by firms in the industry – Proprietary, low-cost product design
5. Industry competitors • Government policy
• Expected retaliation
1. Suppliers
3. Buyers
Intensity of rivalry
3. Determinants of buying power
5. Rivalry determinants • Bargaining leverage
• Industry growth – Buyer concentration vs. firm
• Fixed (or storage) cost/value added concentration
• Intermittent overcapacity 4. Substitutes – Buyer volume
• Product differences – Buyer switching costs relative to firm
• Brand identity switching costs
• Switching costs 4. Determinants of – Buyer information
• Concentration and balance substitution threat – Ability to backward integrate
• Informational complexity • Relative price performance of – Substitute products
• Diversity of competitors substitutes – Pull-through
• Corporate stakes • Switching costs • Price sensitivity
• Exit barriers • Buyer propensity to substitute – Price/total purchases
– Product differences
– Brand Identity
– Impact on quality perception
– Buyer profits
– Decision makers' incentives
Ninety ways to measure
demand (6 x 5 x 3)
Geographical World
Level Region
Country
Territory
Client
Total sales
Sector sales
Company’s sales
Product
Level Product lines
Product config
Product items
Short Medium Long
term term term
Timing Level
Strategic Planning Link with
Marketing Planning
Businesses that succeed do so by creating and keeping customers.
They do this by providing better value for the customer than the competition.
Marketing management constantly have to assess which customers they are
trying to reach and how they can design products and services that provide
better value (―competitive advantage‖).
The main problem with this process is that the ―environment‖ in which
businesses operate is constantly changing.
So a business must adapt to reflect changes in the environment and make
decisions about how to change the marketing mix in order to succeed.
This process of adapting and decision-making is known as marketing
planning.
Key
Strategic Business Marketing Regional Industry
Sales Plan State Plan Account
Plan Plan Plan Plan Plan
Plan
Strategic vs. Marketing Plans
Strategic planning is concerned about the overall direction of the
business.
◦ It is concerned with marketing, of course.
◦ But it also involves decision-making about production and operations, finance,
human resource management and other business issues.
External Environment
Opportunities Threats
Water & Energy crises Competitors market share
Environment awareness Euro X Dollar
Productivity improvement Technology development
SWOT ANALYSIS
Opportunities/Threats
◦ Political
◦ Economic
◦ Social
◦ Technological
PEST Analysis - market, business, proposition, etc.
POLITICAL ECONOMIC
• ecological/environmental issues • home economy situation
• current legislation home market • home economy trends
• future legislation • overseas economies and trends
• European/international legislation • general taxation issues
• regulatory bodies and processes • taxation specific to product/services
• government policies • seasonality/weather issues
• government term and change • market and trade cycles
• trading policies • specific industry factors
• funding, grants and initiatives • market routes and distribution trends
• home market lobbying/pressure groups • customer/end-user drivers
• international pressure groups • interest and exchange rates
• wars and conflict • international trade/monetary issues
SOCIAL TECHNOLOGICAL
• lifestyle trends • competing technology development
• demographics • research funding
• consumer attitudes and opinions • associated/dependent technologies
• media views • replacement technology/solutions
• law changes affecting social factors • maturity of technology
• brand, company, technology image • manufacturing maturity and capacity
• consumer buying patterns • information and communications
• fashion and role models • consumer buying mechanisms/technology
• major events and influences • technology legislation
• buying access and trends • innovation potential
• ethnic/religious factors • technology access, licencing, patents
• advertising and publicity • intellectual property issues
• ethical issues • global communications
PEST or SWOT
A PEST analysis most commonly measures a market; a
SWOT analysis measures a business unit, a proposition
or idea.
Generally speaking a SWOT analysis measures a business
unit or proposition, whereas a PEST analysis measures the
market potential and situation, particularly indicating growth
or decline, and thereby market attractiveness, business
potential, and suitability of access - market potential and 'fit' in
other words.
PEST analysis uses four perspectives, which give a logical
structure, in this case organized by the PEST format, that
helps understanding, presentation, discussion and decision-
making.
PEST analysis can be used for marketing and business
development assessment and decision-making, and the
PEST template encourages proactive thinking, rather than
relying on habitual or instinctive reactions.
Structure-conduct-performance (SCP)
model
Industry Producers
External
shocks
S tructure C onduct P erformance
Feedback
• Technology Economics of demand Marketing Finance
breakthroughs • Availability of substitutes • Pricing • Profitability
• Changes in • Differentiability of products • Volume • Value creation
government • Rate of growth • Advertising/promotion Technological progress
policy/regulations • Volatility/cyclicality • New products/R&D Employment objectives
– Domestic Economics of supply • Distribution
– International • Concentration of producers Capacity change
• Import competition • Expansion/contraction
• Diversity of producers • Entry/exit
• Fixed/variable cost structure • Acquisition/merger/ divestiture
• Capacity utilization Vertical integration
• Entry/exit barriers • Forward/backward integration
Industry chain economics • Vertical joint ventures
• Bargaining power of input • Long-term contracts
suppliers Internal efficiency
• Bargaining power of customers • Cost control
• Logistics
• Process R&D
• Organization effectiveness
Definition of risks
Definition
Team Learning:
◦ Group interaction.
◦ Through techniques like dialogue and skillful discussion,
teams transform their collective thinking, learning to
mobilize their energies and actions to achieve common
goals, and drawing forth an intelligence and ability greater
than the sum of individual members' talents.
Five disciplines – Peter Senge
Systems Thinking:
◦ People learn to better understand
interdependency and change, and thereby to
deal more effectively with the forces that shape
the consequences of our actions.
◦ Systems thinking is based upon a growing body
of theory about the behavior of feedback and
complexity - the innate tendencies of a system
that lead to growth or stability over time.
◦ To help people see how to change systems more
effectively and how to act more in tune with the
larger processes of the natural and economic
world.
Project management - processes
Project management – a process
Project management – process
chain
Project management – risk
analysis
Success Keys - Deployment
Deployment - Completing the Plan
Success Failure
>Assign roles and responsibilities >No accountability for deployment
>Make careful choices about the >Not being thorough-glossing over the
contents of the plan and form it will details
take
Success Keys - Communication
Deployment - Communicating
Success Failure
Assign roles and responsibilities No accountability
Implementing - II
Success Failure
Allocate resources for Focus only on short term need for
implementation resources
Strategic Measurement - I
Success Failure
Assign roles and responsibilities No accountability
Strategic Measurement - II
Success Failure
Use measurement to communicate Use measurement to control
policy (new strategic direction)
Recognize when to update the plan Poor timing and not recognizing
external forces
Achieving Agility Through a New Approach to Forecasting In today’s turbulent economy, rolling forecasts are proving to be an
important new tool in changing the way budgeting and planning has traditionally been handled. Mary Brandel
Benefits of Rolling Forecasts