1. Alexander Consulting Enterprise 2/5/2016 Strategic Planning

2. Alexander Consulting Enterprise 2/5/2016 Strategic Planning Xenophon “Strategy is the Art of Maintaining one’s Ability to Make Proactive Decisions”.

3. Alexander Consulting Enterprise 2/5/2016 “Strategy is a System of Improvisations. It is the ongoing evolution of the central idea under constant changing conditions, it is the art of acting under difficulties and pressure” Helmuth Karl Bernhard von Moltke “Moltke’s beliefs brought us to a series of questions that were much more useful for me over the years than all the data crunching in strategic plans”. Jack Welch

4. Alexander Consulting Enterprise 2/5/2016 Strategic Thinking Strategic ThinkingOperative Thinking -Deals with Important Issues-Deals with Pressing Issues -Contains Irrational and subjective-Contains Rational and Elements Objective Elements -Is Based on Holistic-Is Based on Incremental Thinking -Anticipates the Incalculable- Is Based on the Calculable -Reflects General Knowledge- Reflects specific Knowledge and Intuition and Skills

5. Alexander Consulting Enterprise 2/5/2016 Basic Questions of Strategic Planning: 1. Where are We? (Situation Analysis) 2. Where Do We Want to be? (Objectives) 3. How Do We Get There? (Plan)

6. Alexander Consulting Enterprise 2/5/2016 1. Where are We? Analysis of Present Environment: Industry Environment -Analysis of Industry  Define Industry from broad to narrow  Size, Growth, Maturity  Fragmented versus Concentrated  Profitability of Industry  Trajectory of changes (new inventions, new market entrants, business practices, new customer preferences etc.)

7. Alexander Consulting Enterprise 2/5/2016 Industry Environment -Analysis of Customers in Industry Define Target Market from broad to narrow in Terms of: o Demographics o Psychographics o Lifestyle o Ethnographics o Geographics Analysis of Present Environment: 1. Where are We?

8. Alexander Consulting Enterprise 2/5/2016 Analysis of Present Environment: Industry Environment -Competitive Environment  Define Competitors from Distant to Close  Positioning of Main Competitors  Competitive Advantage of Main Competitors  Strength and Weaknesses of Main Competitors 1. Where are We?

9. Alexander Consulting Enterprise 2/5/2016 Analysis of Present Environment: 1. Where are We? Industry Environment -Analysis of Legal Environment o Which Laws, Regulations have Impact on Doing Business? o How Reliable is the Legal System? o How Efficient is the Legal System?

10. Alexander Consulting Enterprise 2/5/2016 Analysis of Present Environment: 1. Where are We? Industry Environment -Analysis of Cultural Environment -Analysis of Political Environment -Technical Environment o Technical Innovations o Technology driven versus Image and Service driven

11. Alexander Consulting Enterprise 2/5/2016 Analysis of Company Resources - Financial - Human - R & D - Sources of Supply - Alliances and Strategic Networks - Synergies - Company specific Know How and Skills - Connections with Customers, Politicians, Governmental Agencies, Related Companies 1. Where are We? (cont..)

12. Alexander Consulting Enterprise 2/5/2016 1. Where are We? (cont..) Analysis of Company:  Core Competencies  Outsourcing versus Transaction Cost  Competitive Advantage  Cost Leadership  Differentiation  Strength and Weaknesses  Critical Factors of Success  Benchmarking  Product Life Cycle  Portfolio Theory  BCG Model  GE Model  SWOT Present Situation

13. Alexander Consulting Enterprise 2/5/2016 BCG Model Relative Competitive Advantage HighLow High Low Market Attractiveness Star DogCash Cow ? Cash Cow = Invest to Keep Operation Running Dog = Divest Star = Invest to stay Market Leader ? = Either Divest or heavily Invest to become better Competitor

14. Alexander Consulting Enterprise 2/5/2016 BCG Model Market Attractiveness  Growth  Size  Competition  Environment  Legal  Political  Socioeconomic  Quality  Profitability  Fragmentation  Price Elasticity  Market Entry Barriers  Risk of Substitution  Negotiation Power  Risk of Unions  Sourcing Possibilities Relative Competitive Advantage  Market Share  Production Efficiency  Cost  Capacities  Accesses to Input Factors  Image  R&D Efficiency  Management Efficiency  Core Competencies  Alliances and Joint Ventures  Synergies

15. Alexander Consulting Enterprise 2/5/2016 Why should you Become a Leading Competitor?  Economies of Scale  Economies of Scope  Economies of Information  Experience Curve Relative Market Share ROI Relative Market Share = Market Share Market Share of Strongest Competitor

16. Alexander Consulting Enterprise 2/5/2016 1. Where are We? (cont..) Analysis of:  How to Create Value for the Customer? - Value Chain  Product/Segment Growth Model - New Products - New Segments  Wants/Customer Model - Articulated Wants - New Customer  Competency/Market Model - New Markets - New Core Competencies Potential for Future

17. Alexander Consulting Enterprise 2/5/2016 Product Design PurchasingMarketingLogisticsRetailingDistribution Applied Competencies Competitive Advantages Value Chain Support Activities

18. Alexander Consulting Enterprise 2/5/2016 Product/Segment Growth Matrix New Existing Segments Products Product Development Market Penetration Market Development Diversification

19. Alexander Consulting Enterprise 2/5/2016 Wants/Customer Model „The Customer is always right“ “The Customer does not know what she does not know”

20. Alexander Consulting Enterprise 2/5/2016 Not Articulated NewExisting Articulated Customer Wants Wants/Customer Model

21. Alexander Consulting Enterprise 2/5/2016 New Existing Market Core Competence Competence/Market Matrix

22. Alexander Consulting Enterprise 2/5/2016 2. Were do We Want to be?  Vision  Company Mission  Company Objectives Setting of: Corporate Identity

23. Alexander Consulting Enterprise 2/5/2016 “Fantasy is more important than knowledge. Knowledge is always limited. Fantasy can capture the whole world.” Albert Einstein Company Vision 2. Were do We Want to be? Cont..

24. Alexander Consulting Enterprise 2/5/2016 Vision Company Mission Strategy - Company - Strategic Units Operative Direction Organization Implementation Company Culture 3. How do We Get There?

25. Alexander Consulting Enterprise 2/5/2016 3. How do We Get There? Strategic Marketing/Business Plan (some minimum requirements):  Market Segmentation - Demographics - Psychographics - Geographics - Ethnographics  Select Target Market - Volume Potential - Margin Potential - Persuasion Potential  Product Positioning - How is the Product Perceived Relative to Competitors’ Offerings? - Company and Brand Image - Country of Origin Effect?

26. Alexander Consulting Enterprise 2/5/2016 3. How do We Get There? (cont..)  Marketing Mix - Product  Physical Attributes  Packaging  Me Too versus Innovation - Price  Elasticity  Skimming versus Penetration - Placement - Promotion  Advertising  Personal Selling  Public Relation  Promotion

27. Alexander Consulting Enterprise 2/5/2016  Supply Chain  Human Resources  Financial Evaluation  Sales Forecast  Break Even Analysis  Pro Forma Financial Statement 3. How do We Get There? (cont..)