Alexander Consulting Enterprise 10/15/2015 Strategic Planning

Alexander Consulting Enterprise 10/15/2015 Strategic Planning Xenophon “Strategy is the Art of Maintaining one’s Ability to Make Proactive Decisions”.

Alexander Consulting Enterprise 10/15/2015 “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

Alexander Consulting Enterprise 10/15/2015 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

Alexander Consulting Enterprise 10/15/2015 Basic Questions of Strategic Planning: 1. Where are We? 2. Where Do We Want to be? 3. How Do We Get There?

Alexander Consulting Enterprise 10/15/ Where are We? Analysis of:  Present Environment - Industry Environment  Size, Growth, Maturity  Fragmented versus Concentrated  Profitability of Industry  Target Market  Positioning - Competitive Environment - Legal Environment - Political Environment - Socioeconomic Environment - Technical Environment  Technical Innovations  Technology driven versus Image and Service driven

Alexander Consulting Enterprise 10/15/2015 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..)

Alexander Consulting Enterprise 10/15/ Where are We? (cont..) Analysis of:  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

Alexander Consulting Enterprise 10/15/2015 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

Alexander Consulting Enterprise 10/15/2015 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

Alexander Consulting Enterprise 10/15/2015 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

Alexander Consulting Enterprise 10/15/ 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

Alexander Consulting Enterprise 10/15/2015 Product Design PurchasingMarketingLogisticsRetailingDistribution Applied Competencies Competitive Advantages Value Chain Support Activities

Alexander Consulting Enterprise 10/15/2015 Product/Segment Growth Matrix New Existing Segments Products Product Development Market Penetration Market Development Diversification

Alexander Consulting Enterprise 10/15/2015 Wants/Customer Model „The Customer is always right“ “The Customer does not know what she does not know”

Alexander Consulting Enterprise 10/15/2015 Not Articulated NewExisting Articulated Customer Wants Wants/Customer Model

Alexander Consulting Enterprise 10/15/2015 New Existing Market Core Competence Competence/Market Matrix

Alexander Consulting Enterprise 10/15/ Were do We Want to be?  Vision  Company Mission  Company Objectives Setting of: Corporate Identity

Alexander Consulting Enterprise 10/15/2015 “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..

Alexander Consulting Enterprise 10/15/2015 Vision Company Mission Strategy - Company - Strategic Units Operative Direction Organization Implementation Company Culture 3. How do We Get There?

Alexander Consulting Enterprise 10/15/ 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?

Alexander Consulting Enterprise 10/15/ 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

Alexander Consulting Enterprise 10/15/2015  Supply Chain  Human Resources  Financial Evaluation  Sales Forecast  Break Even Analysis  Pro Forma Financial Statement 3. How do We Get There? (cont..)