BSBMGT 616 Develop and implement strategic plans

Activity 1a

Objective: To provide you with an opportunity to check with stakeholders that

organisational vision and mission are still held to be current and are supported
make any changes or refinements to vision or mission statement as required,
Review or develop organisational values to support the vision and mission
statement and gain support for strategic planning process from all relevant
stakeholders.

1. Ensure you have completed Table A.

Table A

What does your organisation do? Australian Hardware supplies hardware

How do you achieve it?
Who are your customers/clients?
What is the measurement of your
organisation success?
and home improvement products and
provide expert advice and service.
Australian Hardware takes a two-
pronged strategic approach
characterized by product and service
differentiation along with select
targeted marketing activities.
The market has been divided into three
target markets or segments: Home
improvers; DYIs; tradespersons.
Australian Hardware operations and
investment activity are financed
through reinvested profits from
previous years’ operational activities
and investments.

2. Then complete the following

Workplace example What changes could be What process could be

made?
Mission statement Australian Hardware is in
business to homeware
and hardware that meet
the efficiency, reliability
and sustainability needs
of our Australian
Hardware customers
who, in turn, reward us
with profits that will allow
our stakeholders and the
communities in which we
operate to prosper.
adopted?
 Join with YYY in co-
branding cups and
café banners.
 Set up innovation and
reward programs for
reducing waste use.
 Develop and
implement energy use
awareness campaign.
 Audit of preferred
supplier product
quality
 Audit of local supplier
 product quality
 Performance
management of staff
Vision statement Within the next five  Sign, action and
years, Australian establish the strategic
hardware will become a alliance agreement
national brand, and will with YYY.
be accepted as an  Establish an
integral part of the Australian Hardware
hospitality industry, Melbourne warehouse.
perceived as a key  Set up agents in other
component in the states and outsource
success of homeware and maintenance
hardware stores, both contracts.
large and small.  Review of national
budgetary
performance and
quarterly financial
management reports
 Review of store
budgets and quarterly
financial management
reports
 Review of preferred
suppliers to negotiate
price reductions
 Review of local
suppliers to negotiate
price reductions
Core Values Australian Hardware  Instigate bulk buying
values have been the negotiations to reduce
same for as long as the supplier price.
organisation has existed.  Operate all
For our stakeholders, it departments at
has always been about optimum capacity and
stewardship and about productivity.
adhering to professional  Establish social,
and moral standards of internet and
conduct in all that we do. networking marketing.
For our people, we are  Join with YYY in co-
committed to branding cups and
encouraging self-directed café banners.
wise environment  Set up innovation and
practices and offering reward programs for
meaningful value to our reducing waste use.
customers.  Develop and
implement energy use
 awareness campaign.
 Determination of
staffing requirements
and sales skills
assessment for stores
 Employee product and
sales training
 Recruitment of skilled
staff
 Research innovation,
exciting products and
suppliers to drive
custom
Activity 2a

Objective: To provide you with an opportunity to clarify determine information

requirements and undertake or commission research to deliver relevant
information.

Demographics  Male and female, ages 20-60

 Full-time employment
 An average income of %60,000
Economics  Sluggish growth and moderate
increase in the Australian
unemployment figures may present
an opportunity for hardware and
home-improvement retailers such
as Australian Hardware. This
opportunity exists despite other
retailers suffering from low
consumer confidence, poor sales
and overseas competition
particularly through e-commerce.
Hardware retailers have benefitted
from the sense among
homeowners that now is the time
to choose renovation and home
improvements rather than selling
and moving to an already
renovated house.

 The trend towards home

improvements is linked to the
increase in residential housing
prices, which is due to the housing
shortage and easier access to
finance and government
incentives, amongst other factors.
 Current trends continue, the
industry is expected to grow by
23% over the next five years to
reach$14.2 billion in 2016-17.
Internal research  Household income survey indicates
a 23% decline in disposable income
due to an increase in interest rates
 Political and legal findings indicate
that Australian Hardware
employees are working longer
hours
 There is new legislation relating to
labelling requirements on all
products delivered to Australian
Hardware customers
 World industry report finding
indicate that large supermarket
chains such as Bunnings and
Masters are planning take over
most smaller chains such as
Australian Hardware
 The world industry report has
reported an evolving need for
satisfaction being sought by
buyer’s in the hardware and home
ware areas
 Market world research shows that
57% of Australian Hardware
customers now prefer to order
products online
 Visits to bricks-and-mortar stores
for products are declining and in-
store sales have dropped by 37% in
the past quarter
 Market world research has reported
a 28% material shortage due to
overseas completion, making 23%
of Australian Hardware products
temporarily unavailable
 The industry report shows an 18%
expansion by other competitors –
both interstate and internationally
 Strategies adopted by each major
competitor have created a price
war
 Overall sales have decreased by
22% as a result for the fight for
 market share
Market segmentation The market has been divided into three
target markets or segments: home
improvers (3 million); DYIs (2 million) ;
tradespersons – owners and managers
of small to medium sized business and
individual contractors (up to 2 million).
Number of customers estimated to be
up to seven million people.
Political  Relevant legislation may include
 More stringent packaging laws may
allow Australian Hardware to
highlight its environmentally
sustainable approach to business.
 Environmental legislation may
allow Australian Hardware to
promote its low impact approach to
advertising while also
disadvantaging the competition,
which may need to alter their
practices to comply.
 Australian Hardware anticipates
that the Australian Government’s
focus in future legislative direction
and fiscal policy will be centred on
promoting growth in the face of the
continuing international debt crisis,
poor growth and subdued
consumer confidence.

Product  Timber
 Hardware
 Tools
 Paint
 Housewares
 Outdoor
 Garden
Social  Consumers are increasingly aware
of the impact of business activity
on the local community.
Consumers demand that business
consider the impact of their
activities and work to promote
healthy community involvement.
Consumers are also becoming
more aware of working conditions
in other countries want to
 contribute to better global social
and economic outcomes.
 Consumers are also concerned
about the environment. Australian
Hardware will endeavour to
promote itself as environmentally
and socially responsible and
conduct business operations
accordingly. In this way, Australian
Hardware will offer value to the
socially and environmentally aware
consumer and position itself as a
leader in social and environmental
responsibility.
Technological Internet, information and social
networking technologies continue to
evolve and provide new challenges and
opportunities for marketing. Australian
Hardware will continue with its
effective use of its website to promote
and sell products and social networking
to reach its target markets.

Activity 2b

Objective: To provide you with an opportunity to analyse political, economic,

social, and technological developments in a global context

1. What workplace examples can you provide to describe the importance of

exploring issues with a global context, rather than domestic?

Your workplace example

 Highlight its environmentally sustainable approach to business.
 Hardware retailers have benefitted from the sense among homeowners that
now is the time to choose renovation and home improvements rather than
selling and moving to an already renovated house.
 Promote itself as environmentally and socially responsible and conduct
business operations accordingly.
 Offer value to the socially and environmentally aware consumer and position
itself as a leader in social and environmental responsibility.
 Continue with its effective use of its website to promote and sell products
and social networking to reach its target markets.
The importance of global context in this example considering the PEST analysis
 Household income survey indicates a 23% decline in disposable income
due to an increase in interest rates
 Political and legal findings indicate that Australian Hardware employees
are working longer hours
 There is new legislation relating to labelling requirements on all products
 delivered to Australian Hardware customers
 World industry report finding indicate that large supermarket chains such
as Bunnings and Masters are planning take over most smaller chains such
as Australian Hardware
 The world industry report has reported an evolving need for satisfaction
being sought by buyer’s in the hardware and home ware areas
 Market world research shows that 57% of Australian Hardware customers
now prefer to order products online
 Visits to bricks-and-mortar stores for products are declining and in-store
sales have dropped by 37% in the past quarter
 Market world research has reported a 28% material shortage due to
overseas completion, making 23% of Australian Hardware products
temporarily unavailable
 The industry report shows an 18% expansion by other competitors – both
interstate and internationally
 Strategies adopted by each major competitor have created a price war
 Overall sales have decreased by 22% as a result for the fight for market
share

Activity 2c

Objective: To provide you with an opportunity to seek advice from appropriate

experts wherever necessary

What is your workplace experience in seeking information from an expert?

Advantages
 Additional skills.
The usual reason to hire a
consultant is to get access to some
of their skills that are scarce or
nonexistent in your own company.
Beware that the more narrowly a
consultant defines himself or
herself (e.g. "I develop mail-order
catalog website back-ends with
Ruby on Rails"), the less helpful
they will be. When you hire a
button-pusher, don't expect
miracles — expect buttons to be
pushed.
 Intelligent advice.
This is the original and best reason
to hire a consultant, and where
'miracles' can occur. Real
consultants are people you
can consult. Sadly, the art of asking
good questions, gathering
information about problems and
Disadvantages
 Cost.
Consultants can be expensive, but
usually this is only a problem when
you are hiring a consultant to be
doing something that an employee
should be doing. Most of the value
you will get from consultants is
from their advice, observations
and some focus work, so a couple
hours from a consultant could save
you months of wasted
employee/contractor time.
 Quality control.
If you're hiring a stranger, you
really know nothing about whether
their skills will help or hinder your
project. And consultants often work
on their own time, in their own
way. This lack of visibility,
necessary for good consulting (and
a legal requirement for
independent consultants), can also
 giving advice based on experience hide shoddy work. Hire consultants
and observations has almost based on referrals and give them
become a lost art among today's smaller initial projects so that you
see of 'consultants', who can judge them based on results
technically should call themselves rather than marketing glitz.
independent contractors, not
consultants.
 Outsider perspective.
The imaginative user of outsiders
can encourage each of the types of
mindfulness just mentioned. Just
as a traveler to a foreign culture
notices what people indigenous to
that culture take for granted, an
outsider in a company may notice
when the corporate natives are
following what may now be
irrational traditions or destructive
myths.

Activity 2d

Objective: To provide you with an opportunity to identify and consider strengths

and weaknesses of existing and potential competitors and allies and analyse
organisation’s strengths, weaknesses, opportunities and threats

SWOT
Strengths
 Excellent staff, highly skilled at
sales, product demonstrations and
explaining product features
 Great locations
 Product offerings that meet or
exceed competitors’ offerings in
quality and innovation
 Strong marketing budget
 Consistent brand recognition across
Australia
 8% market share
 Secured real estate to limit growth
of competitors
 E-commerce developed with online
store for most products
Weaknesses
 High cost of sales associated with
environmental and socially
PEST
Political and legal environment
The political environment includes
legislation and government legislative
direction.
The last two types of legislation may be
particularly important for Australian
Hardware’s business and marketing
activities. As noted, sustainable
business practices are becoming more
important to customers. More stringent
packaging laws may allow Australian
Hardware to highlight its
environmentally sustainable approach
to business.
In a similar way, environmental
legislation may allow Australian
Hardware to promote its low impact
approach to advertising while also
 responsible choices
 Low customer loyalty to brands
Opportunities
 Strong market potential; a
significant percentage of the target
market still not visiting Australian
Hardware on a daily basis
 Extension of business hours
 Expansion of e-commerce to
consolidate online advantage
 New partnerships with suppliers of
innovative suppliers
 Opportunity to bulk buy and reduce
prices through economies of scale
 Opportunities to market and
differentiate Australian Hardware
on the basis of training, product
range, product innovation
Threats
 Competition from new entrants into
market, especially e-commerce
 Uncertainty of worldwide economic
climate and impact on Australian
spending
 Growth of international e-
commerce (exacerbated by strong
Australian dollar)
 Potential lack of prime locations for
large warehouses where Bunnings
has already secured prime real
estate
disadvantaging the competition, which
may need to alter their practices to
comply.
Finally, Australian Hardware anticipates
that the Australian Government’s focus
in future legislative direction and fiscal
policy will be centred on promoting
growth in the face of the continuing
international debt crisis, poor growth
and subdued consumer confidence.
Economic environment
Interestingly, sluggish growth and
moderate increase in the Australian
unemployment figures may present an
opportunity for hardware and home-
improvement retailers such as
Australian Hardware. This opportunity
exists despite other retailers suffering
from low consumer confidence, poor
sales and overseas competition
particularly through e-commerce.
Hardware retailers have benefitted
from the sense among homeowners
that now is the time to choose
renovation and home improvements
rather than selling and moving to an
already renovated house.
According to IBISWorld, the trend
towards home improvements is linked
to the increase in residential housing
prices, which is due to the housing
shortage and easier access to finance
and government incentives, amongst
other factors. F current trends
continue, the industry is expected to
grow by 23% over the next five years
to reach$14.2 billion in 2016-17.
Social and cultural environment
Consumers are increasingly aware of
the impact of business activity on the
local community. Consumers demand
that business consider the impact of
their activities and work to promote
 healthy community involvement.
Consumers are also becoming more
aware of working conditions in other
countries want to contribute to better
global social and economic outcomes.

Consumers are also concerned about

the environment. Australian Hardware
will endeavour to promote itself as
environmentally and socially
responsible and conduct business
operations accordingly. In this way,
Australian Hardware will offer value to
the socially and environmentally aware
consumer and position itself as a
leader in social and environmental
responsibility.

Technological environment
Internet, information and social
networking technologies continue to
evolve and provide new challenges and
opportunities for marketing. Australian
Hardware will continue with its
effective use of its website to promote
and sell products and social networking
to reach its target markets.

Activity 2e

Objective: To provide you with an opportunity to consider cooperative ventures

that supported by risk and cost-benefit analyses, are consistent with the
organisational vision, mission and values, and provide for due diligence

Areas Your answers/comments

I understand what is a cooperative or Master Traders
joint venture Description of joint venture – Shared
space in four trade shows per year.

XXXXX
Description of joint venture – Share in
the cost of outdoor advertising for
products, with shared branding.

YYY
Description of joint venture – YYY
provides Australian Hardware products

I understand what is required with a
risk and cost-benefit analysis in the
context of a cooperative or joint
venture
I understand the measurement of
consistencies with the organisational
vision, mission and values as they
would relate to considering a
cooperative or joint venture
I understand the details required for
due diligence and what that entails
to client at no charge. YYY pays
Australian Hardware cost price for the
delivery and installation of the
machine, then pays the remainder of
the purchase price on a 12-month
repayment program
Master Traders
Venture Risks –
1. Partner not fulfilling their
financial commitment
2. Association with a non-industry
partner may have a negative
effect on Australian Hardware
customer base
3. Partner access to Australian
Hardware trade secrets
Venture: Cost-benefit analysis – Costs
of the shows are $2,500 each. Four
shows costing $10,000, selling 10
machines per show at $500. Each
would see a profit of $10,000 for the
year and a break-even after two shows.
XXXXX
Venture: Risks –
1. Risks with poor brand
association
2. Long-term commitment in
signage
YYY
Venture: Risks – Concern-benefit
analysis – Potentially 200 products
implemented in the first year. Interest
costs $40,000 p.a., profit $100,000.
Break-even after 80 products sold
Venture: Trend analysis
Venture: Financials
 Copies of other strategic alliance
agreements
 Statement of Financial Position
from last tax return
 Full personal contact details of all
directors
  Supporting data for trends, and
cost-benefit analysis

Activity 2f

Objective: To provide you with an opportunity to check that analysis of internal

and external environment is consistent with the perspectives of other informed
people

Example used SWOT analysis

Analysis process In the organization
Existing and potential competitors
Existing and potential allies

Activity 3a

Objective: To provide you with an opportunity to document relevant research and

background for inclusion in the strategic plan, formulate strategic objectives and
strategies needed for the future, detail each strategy with an assigned priority, a
timeframe, responsible parties and measurable performance indicators and
circulate strategic plan for comment, support and endorsement

Areas you have Your workplace Other examples

addressed experience
Documenting relevant
research and background
data
Formulating strategic
objectives and strategies
Detailing each strategy
with an assigned priority,
a timeframe and
responsibility
Detailing measurable
performance indicators
Circulating the strategic
plan for comment,
support and
endorsement

Workplace experience

Activities The audience Timeframes

Resources
Communicate the All employees in Fourth quarter of
strategic plan to all the organization. A summary of the this year
employees through overall strategic
vision for the
company magazine,
newspaper or fliers. company

Celebrate success The persons who Fourth quarter of

taking those Remuneration to this year
responsibilities celebrate success

Evaluate the CEO, CFO, COO, Early of next year

communication board of directors, Update company’s
efforts, and Store general SWOT analysis and
Developing and managers, HR competitor analysis.
Consider assigning
completing general manager,
each planning team
strategic plan FARM (finance, member a competitor
accordingly. audit and risk to analyze as pre-
management work.
committee),
Marketing general
manager
Develop a strategic
plan includes critical
skill sets and staff
positions needed to
successfully execute
the plan.

The application of
how the strategic plan
applies to the
particular group that
is being addressed
should be discussed
in some detail.

The specific
objectives that have
come out of the
planning process
should be conveyed
to the employees,
with particular
emphasis on the
objectives that are
most relevant to their
work.
 Draft a set of talking
points that you and
your team can use to
communicate
progress and
direction.

Create a feedback
loop where the
general staff can
share ideas and feel
part of the process.

Implement the CEO, CFO, COO, First quarter of

strategic plan. board of directors, Measure and track next year
Store general implementation
managers, HR throughout the
executive timeline.
general manager,
FARM (finance,
audit and risk
management
committee),
Marketing general
manager

Review and CEO, CFO, COO, Second quarter of

evaluate the board of directors, Review the strategic next year
strategic plan. Store general plan often and use it
managers, HR to gauge new
opportunities against
general manager,
strategic initiatives to
FARM (finance, keep your company
audit and risk on track.
management
committee),
Marketing general
manager

Other examples

Activities The audience Timeframes

Resources
Functional area Project team Weekly
dependencies Project schedule
Status of key
project deliverables Issues log

Launch checklist
Summary of Project sponsor Weekly and
progress Project report card monthly for
Stopping critical financials
tasks Schedule summary
Issues
Issues log
Risks
financials
Escalation list

Launch checklist

Project review

Budget summary
Summary of Functional directors Weekly and
progress Functional status monthly for
Functional issues financials
Functional risks Project report card
Functional
Stakeholder review
financials

Milestone progress Executive team Monthly/quarterly

Cross-functional Executive review
risks
Financials

Activity 4a

Objective: To provide you with an opportunity to communicate strategic plan to

all relevant parties, brief people with a specific role in relation to strategies, use
performance indicators to monitor progress in implementing plan, make
necessary refinements to plan. Evaluate achievement of objectives at agreed
milestones and review effectiveness of plan and consider methods for improving
strategic planning processes

Details of the example used

 Objective
 Strategy
 KPI progress
 Milestone progress
 Overall progress
 Improvement
Details in particular detail implementing:

Objective 1 – To sell and service Australian Hardware products in every state of

Australia in the next five years. All states have homeware and hardware, apart
from the Northern Territory, where it took some time to get an agent.

 Strategy (a) – Sign, action and establish the strategic alliance agreement
with YYY.
KPI progress 200 machines installed p.a.
Milestone Agreement signed within the time limit and auctioned,
progress but only 180 machines installed in the past 12 months.
Overall progress There was a slower uptake in Northern Territory and
North Queensland, due to the tourist slump with the
strong Australian dollar.
Improvements Monitor plan and commitment through periodic updates.

 Strategy (b) – Establish an Australian Hardware Melbourne warehouse.

KPI progress Australian Hardware opens in Melbourne within two years
after Sydney opens for business.
Milestone Melbourne warehouse is still not open.
progress
Overall progress It is currently being run on the more expensive agency
model.
Improvements Use the company’s core project management skills to
maintain the schedule, to drive completion and to
manage competitive cost.

 Strategy (c) – Set up agents in other states and outsource maintenance

contracts.
KPI progress Agent agreements and outsource maintenance contracts
for South Australia, Western Australia, northern Territory,
Tasmania , ACT.
Milestone Still no service contractor for Northern Territory.
progress
Overall progress All others met the deadline, although agents in Western
Australia, Tasmania and northern territory were very
expensive.
Improvements Adapt plan and manage cost to meet the objectives

Objective 2 – To increase profit margins by 5% from our benchmark in the next

five years. Profit margins have improved by 2% in the last two financial years.
Some agent contracts and outsourcing contracts are very expensive.

 Strategy (d) – Instigate bulk buying negotiations to reduce supplier price.

KPI progress 100% of purchase by the container load.
Milestone 100% Volumes have increased to the point that all orders
progress fill a container.
Overall progress KPI achieved in quicker time due to the initial increase in
 demand.
Improvements Continue implement this strategy.

 Strategy (e) – Operate all departments at optimum capacity and

productivity.
KPI progress Wages to turnover ratio of 12.5%.
Milestone 13.8%. Some states still underperforming.
progress
Overall progress Strategy still in line with timetable.
Improvements Continue implement this strategy.

Objective 3 – To establish the Australian Hardware brand recognition in key

markets over the next five years. After two fiscal years, 50% of our target market
recognise the brand and 87% of those responding said the brand reaction was
very positive.

 Strategy (f) – Establish social, internet and networking marketing.

KPI progress 10,000 clicks per day on the website.
Milestone 12,000 clicks per day.
progress
Overall progress Achieved in half the time allocated. SEO specialist
contractor very experienced.
Improvements Continue implement this strategy and increase target
number of clicks.

 Strategy (g) – Join with YYY in co-branding cups and café banners.
KPI progress 100% of cafes with our machine, using our cups.
Milestone Survey reveals only (50%) uptake.
progress
Overall progress Design and colours not attractive. Strategy introduced
within timeframe.
Improvements Create a new design with incorporating the customers in
this campaign.

Objective 4 – To reduce our waste and energy use by 10% within the next five
years. After two fiscal years, the reduction is 8% lower than original financial
year benchmarks.

 Strategy (h) – Set up innovation and reward programs for reducing waste
use.
KPI progress 25 suggestions per year; 6 new innovations introduced
per year in relation to reducing waste.
Milestone 30 suggestions and 8 new innovations, leading to a
progress significant reduction in waste.
Overall progress Introduced within designated timeframe.
Improvements Continue implement this strategy.

 Strategy (i) – Develop and implement energy use awareness campaign.

 KPI progress kW per use person to drop to 10kW.
Milestone 12kW per person.
progress
Overall progress Introduced too late in the year and not rolled out across
the whole organization.
Improvements Improve communication plan in the organization and
implement plan since early of next year, also monitor
plan through periodic updates.

Activity 4b

To understand and demonstrate the processes involved in creating a strategic

plan.

 Moving into the new Sydney market, where the bulk of products are sold
each year, and from which a major (but ineffective) competitor has
withdrawn
 Other opportunities could be found in strategic alliances with homeware
and hardware suppliers, where market penetration could easily be
achieved and costs of advertising and service could be shared
 There was also concern about the rising Australian dollar having a severe
long-term impact on tourism, which was a major category buyer of
homewhere. Raising interest rates that are predicted for the coming years
could impact negatively on the disposable income of customers
 The concerns of the group were centred on a global corporation, Bunnings,
becoming a one stop shop. The resources they would have at their
disposal in marketing, finance, and human resources could be a serious
threat to Australian Hardware plans. However, they would still struggle to
gain a foothold in a market that already has strong supplier/buyer
allegiances, with most stretching over many years. Global players like
Bunnings have difficulty being adaptable to the needs of niche market
buyers
 Another competitor of note was Masters a large homeware and hardware
chain that had recently started importing products for their customers.
There was talk of them selling the products as wholesalers. They certainly
had easy access to markets with their homeware and hardware trade, but
they had no established service arm to help wholesale clients maintain the
products that they purchased
 Australian Hardware has been keen to pursue strategic alliances as part of
its strategy to achieve its objectives. It called for tenders from interested
parties, who were asked to complete a tender application from that
provided information relating to the tender requirements. Some notes
have been included by senior managers who assessed some of the
information

Organisational structure
Activities Date/timelin Person Measurable
es responsible performance
indicators
To sell and service Australian Hardware products in every state of
Australia.
Sign, action and Quarterly Marketing general Machines installed
establish the manager p.a.
strategic alliance
agreement with YYY.
Establish an Quarterly Store general Australian Hardware
Australian Hardware managers, general opens in Melbourne.
Melbourne operations
warehouse. managers, HR
general manager
Set up agents in Monthly Marketing general Agent agreements
other states and manager; HR and outsource
outsource general manager maintenance
maintenance contracts.
contracts.
To increase profit margins by 5% in the next five years.
Instigate bulk Monthly Store general Number of purchase
buying negotiations managers, FARM by the container load.
to reduce supplier (finance, audit and
price. risk management
committee)
Operate all Quarterly CEO, CFO, board of Wages to turnover
departments at directors, Store ratio.
optimum capacity general managers,
and productivity. HR general
manager, FARM
(finance, audit and
risk management
committee)
To establish the Australian Hardware brand recognition in key markets in
the next five years
Establish social, Monthly Marketing general Clicks per day on the
internet and manager website.
networking
marketing.
Join with YYY in co- Monthly Marketing general Number of cafes with
branding cups and manager, Store our machine, using
café banners. general managers our cups.
To reduce our waste and energy use by 10% within the next five years
Set up innovation Monthly Store general Number of
and reward managers, general suggestions per year
programs for operations and new innovations
managers, HR
reducing waste use. introduced per year in
general manager,
COO. relation to reducing
 waste.
Develop and Monthly Store general kW use reduction.
implement energy managers, general
use awareness operations
managers, HR
campaign.
general manager,
COO.

Strategic Action Plan

Objective 1 – To sell and service Australian Hardware products in every state of

Australia in the next five years. All states have homeware and hardware, apart
from the Northern Territory, where it took some time to get an agent.

 Strategy (a) – Sign, action and establish the strategic alliance agreement
with YYY.
KPI progress - 200 machines installed p.a.

 Strategy (b) – Establish an Australian Hardware Melbourne warehouse.

KPI progress - Australian Hardware opens in Melbourne within two years
after Sydney opens for business.

 Strategy (c) – Set up agents in other states and outsource maintenance

contracts.
KPI progress - Agent agreements and outsource maintenance contracts for
South Australia, Western Australia, northern Territory, Tasmania , ACT.

Objective 2 – To increase profit margins by 5% from our benchmark in the next

five years. Profit margins have improved by 2% in the last two financial years.
Some agent contracts and outsourcing contracts are very expensive.

 Strategy (d) – Instigate bulk buying negotiations to reduce supplier price.

KPI progress - 100% of purchase by the container load.

 Strategy (e) – Operate all departments at optimum capacity and

productivity.
KPI progress - Wages to turnover ratio of 12.5%.

Objective 3 – To establish the Australian Hardware brand recognition in key

markets over the next five years. After two fiscal years, 50% of our target market
recognise the brand and 87% of those responding said the brand reaction was
very positive.

 Strategy (f) – Establish social, internet and networking marketing.

KPI progress - 10,000 clicks per day on the website.

 Strategy (g) – Join with YYY in co-branding cups and café banners.
KPI progress - 100% of cafes with our machine, using our cups.
Objective 4 – To reduce our waste and energy use by 10% within the next five
years. After two fiscal years, the reduction is 8% lower than original financial
year benchmarks.

 Strategy (h) – Set up innovation and reward programs for reducing waste
use.
KPI progress - 25 suggestions per year; 6 new innovations introduced per
year in relation to reducing waste.

 Strategy (i) – Develop and implement energy use awareness campaign.

KPI progress - kW per use person to drop to 10kW.

Skills and Knowledge Activity

1. How can your analytical skills be used when developing and

implementing strategic plan?
Analytical skills be used when Analyze Your Organization. It's much easier to
achieve your objectives and help you think about how you can set yourself
apart from your competitors. Analyze Your Environment to predict where
things are moving and exciting opportunities that you should pursue. Analyze
Your Customers and Stakeholders will help you uncover these needs and
preferences. Analyze Your Competitors helps you identify ways in which you
can compete effectively.

2. What financial implications exist when proposing new strategies?

Pro forma statements that demonstrate the possible future financial impact of
the various courses of action available. For examples; budgets, income
statements, balance sheets, and cash flow statements.

3. Why is it important that research is accurate and up-to-date?

Updating your database helps you comply with the rules, but also benefits
you by avoiding wasting resources contacting someone who has 'gone away'.
They can also screen customer data against a range of files, including the
national change of address file, and register of the deceased.

4. How can the requirement of due diligence be assessed?

- Finance: Accounting, cash flow, accounts receivable, quality of earnings,
financial trends, in place financial systems, financial organization and
internal audits
- Operations: Assess current employee structure and roles; review facilities,
review of intellectual property and current contracts
- Information Systems: Assessment of organization, software lifecycles, third
party contracts or services and information security
- Compliance: Assess whether or not regulations and industry requirements
are being met

5. What relevant legislation does your organisation adhere to that

could affect strategic planning?

The primary legislation that may need to be considered

- Governance
- Human resources
- Practice issues
- Other commitments

6. What is the purpose of a SWOT and PEST analysis?

The purpose of a SWOT analysis is to create lists of all of the internal and
external strengths, weaknesses, opportunities and threats to inform strategic
planning decisions.

The purpose of a PESTLE analysis is to identify all of the various external

political, economic, social, technological, legal and environmental factors that
might affect a business.

7. Why is it important to have knowledge of the competitors?

- Knowing who your competitors are, can help you to make your products,
services and marketing stand out. It will enable you to set your prices
competitively and help you to respond to rival marketing campaigns with
your own initiatives.

- You can use this knowledge to create marketing strategies that take
advantage of your competitors' weaknesses, and improve your own
business performance. You can also assess any threats posed by both new
entrants to your market and current competitors. This knowledge will help
you to be realistic about how successful you can be.

- If your competition is changing then it gives you a free insight into what’s
happening with their customers, your customers and within the industry
as a whole. The changes they make are also important because they can
show you different ways of doing things - give you new ideas on how to
run your own business.

- Finally, and most importantly, you know what choices your customers or
clients have elsewhere; if you understand what they offer, you can be
ready when customers start to compare the choices on offer and you’ll
know how to answer the difficult questions before they’re asked by your
clients. You can sell-in your services or products much more successfully if
 you’re confident you offer the best value and quality. Only with this
knowledge can you offer a better, more cost-effective service or product
range.

Major Activity

1. How can you check the vision and mission of the organisation is
supported and why is this useful?
Reviewing strategic plan and evaluating activities move the company toward
its vision and mission; it may need to be revised.

Well-written vision and mission statements ensure that each element of the
strategic management process is aligned to the company's long-term goals.
Managers use clear and concise vision and mission statements to
communicate their aspirations to stakeholders. Employees understand where
to focus their efforts if they align their daily work with the vision and mission.
Clear vision and mission statements allow customers, suppliers and
shareholders to choose whether or not they want to do business with the
company.

2. How can you gain support from stakeholders for strategic

planning?

- Communicate. The first rule of engagement is all about sharing

information in a purposeful and consistent way.

- Actively involve stakeholders in the process. Ask for input about

strategic planning in meetings, through surveys, with targeted
suggestion boxes, in employee newsletters.

- Make sure people know what the strategic plan is and where they fit in
it. Engaging employees in the planning process itself helps build
ownership within the organization.

3. What is the importance of using experts when strategically

planning?
Using outside experts to facilitate strategic planning will lead to the greatest
results. Effective CEOs understand their personal limitations so they build
alliances with experts who can help them navigate the path to the future. By
establishing these alliances they create the results and success they desire.
They ensure that they have available best thinking based on the experience,
education and perspective of the management team.

4. How would you analyse the following:

- Internal environment
 SWOT analysis

- External environment
PEST analysis

- Competitors
Define the industry
Find out your competitors
Determine the customers
Key success factors
Rank those factors
Rate your competitors

5. Why is due diligence required when strategically planning?

Accounting - it is always money well spent to have an accountant review the
business' bookkeeping process and records.
Site Inspection - this is your area of expertise and passion, then this function
of investigating the operation of the business should be a slam-dunk for you.
Employees - This aspect of taking over a business can sometimes be a
problem, especially if the seller had few rules or expectations of the
workforce.
Customers - Contacting and interviewing a sampling of customers would be a
good idea so you can get a good idea of what customers think of the business
and the people they are normally in contact with.
Vendors - Certain key vendors should also be contacted to determine how
business was conducted in the past and if there were any problems that need
to be addressed.
Government - Be sure to check out any license or permit requirements from
the government. There should at least be a valid business license, and
documentation on any corporations, and payments of fees. These are often
overlooked, and can cause problems down the line.

6. How is research regarding strategic planning documented within

your organisation?
- Every board member and member of management should get a copy of
the plan.
- Consider distributing all (or highlights from) the plan to everyone in the
organization.
- Post your mission and vision and values statements on the walls of your
main offices.
- Publish portions of your plan in your regular newsletter, and advertising
and marketing materials (brochures, ads, etc.).
- Train board members and employees on portions of the plan during
orientations.
- Include portions of the plan in policies and procedures, including the
employee manual.
- Consider copies of the plan for major stakeholders, for example,
funders/investors, trade associations, potential collaborators,
vendors/suppliers, etc.
7. Why is it important to record strategic changes for the future?
Without records there can be no rule of law and no accountability. Records
provide a reliable, legally verifiable source of evidence of decisions and
actions. They document compliance or non-compliance with laws, rules, and
procedures. Governments can no longer justify taking action with little or no
reference to past performance or future goals. Nor can they justify parallel or
duplicate services when they can combine services and reduce costs. Client
service, quality performance of tasks, and measurable outcomes are
increasingly important responsibilities, and these aspirations all depend on
accessible and usable records.

8. How is information regarding strategic plans circulated within

your organisation?

- Keep the message simple, but deep in meaning.

- Build behavior based on market and customer insights

- Use the discipline of a framework.

- Think broader than the typical CEO-delivered message. And don’t

disappear.

- Put on your “real person” hat.

- Tell a story.

- Use 21st-century media and be unexpected.

- Make the necessary investment.

9. Why is it important to communicate details of the plan and why is

this useful?

1. Employees understand the big picture and how they fit in.

2. Employees are more productive and there is meaning to their work.

3. Better leaders.

4. Vigilant managers who have an ear to the ground.

5. A culture of communication.

Organizations that understand the benefits of good communication,

prioritize and constantly strive to achieve better internal
communication are a breed apart. They achieve trust and credibility. They
 enable employees to do their jobs better. They create a constructive
workplace that encourages growth and a common sense of purpose.

10. What performance indicators could be used to assess the

success of a strategic plan?
Financial Metrics – Profit, Cost, LOB Revenue Vs. Target, Cost Of Goods Sold,
Day Sales Outstanding (DSO), Sales By Region, LOB Expenses Vs. Budget
Customer Metrics - Customer Lifetime Value (CLV), Customer Acquisition Cost
(CAC), Customer Satisfaction & Retention, Net Promoter Score (NPS), Number
Of Customers
Process Metrics - Customer Support Tickets, Percentage Of Product Defects,
LOB Efficiency Measure
People Metrics - Employee Turnover Rate (ETR), Percentage Of Response To
Open Positions, Employee Satisfaction

11. What is the purpose of reviewing a strategic plan at agreed

milestones and after implementation?
- Summaries of how the strategic plan is progressing, and description of
changes to program activities based on evaluation findings.
- Achieving its aims and objectives
- Showing progress towards its mission/purpose
- Meeting the needs of its beneficiaries
- Able to demonstrate the impact it is having
- Using its resources effectively and to the greatest effect
- Complying with law
- Working within its policy framework