Ken Johnson

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Business Strategy Planning

• Ken Johnson
• 24 March 2003

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Why Plan?

• Cheshire Puss she (Alice) began would you
  please tell me which way I ought to go from
  here?
• That dependes on where you want to get!, said
  the cat.
• Lewis Carroll, Alice in Wonderland

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Why have a strategy?

• To be in hell is to drift, to be in heaven is to
  steer
• George Bernard Shaw
• Plans are nothing, but planning is everything
• Eisenhower

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Why have a stratgey?

• Sets direction for the business
• On going analytical process that encourages you
  to take a step back and see wood from trees
• Consultative process ? fresh ideas and innovation
  to the table
• Forces you to challenge assumptions others will
• Underpins your structure, marketing and your
  people
• Ad hoc approach to business development no longer
  appropriate

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Strategic Planning Framework
VISION
MISSION STATEMENT
KEY STRATEGIC OBJECTIVES
EXTERNAL REVIEW Opportunitites Threats
INTERNAL APPRAISAL Strengths Weaknesses
GAP ANALYSIS
STRATEGY FORMULATION
STRATEGIC PLAN
STRATEGY IMPLEMENTATION
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The Planning Process External Review

• What industry are you in?
• What are industrys dominant economic traits?
• How strong are the competitive forces?
• What are industry change drivers?
• What are key success factors?
• Is the industry attractive?

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The Planning Process External Review
Technology
The Organisation
Economic/ Demographic Features
Socio-psychological Cultural Forces
Legal and Government Influences
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The Planning Process External Review
FIRMS IN OTHER INDUSTRIES OFFERING SUBSTITUTE
PRODUCTS
Competitive pressures coming from the market
attempts of outsiders to win buyers over to their
produts
Competitive pressures growing out of ability
to exercise bargaining power and leverage
Competitive pressures growing out of ability
to exercise bargaining power and leverage
RIVALRY AMONG COMPETING SELLERS
SUPPLIER OF KEY INPUTS
BUYERS
Competitive forces created jockeying for better
market and competitive advantage
Competitive pressures coming from the threat of
entry of new rivals
POTENTIAL NEW ENTRANTS
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The Planning Process - Internal Appraisal

• Analyse success of current strategy
• Strengths and weaknesses
• Value chain analysis
• Organisational structure
• Core competencies

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The Planning Process - Internal Appraisal

• Success of current strategy
• Market share ranking in industry
• Profit margins increasing or decreasing and
  relativity with competitors
• Trends in net profits and ROI
• Companys credit rating
• Sales growing faster or slower than the market
• Image and reputation with customers
• Perception of company as a leader in technology
  adoption, product innovation etc

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The Planning Process - Internal Appraisal
Strengths and Weaknesses

• Strengths
• Core competence
• Financial resources
• Good reputation
• Strong brand
• Proprietary technology
• Superior manufacturing
• Low-cost leader
• Good management

• Weaknesses
• No strategic direction
• Lack of good management
• Weak market image
• Insufficiently financed
• Higher costs than competitors
• No RD
• Skills gap
• Obsolete manufacturing
• Me-too product

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The Planning Process - Internal Appraisal
Value Chain Analysis
Purchasing supplies inbound logistics
Profit Margin
Outbound logistics
Sales Marketing
Operations
Service
Product RD, Technology and Systems
Development Human Resources Management General
Administration
What opportunities can be unlocked and what
competitve advantages be gained?
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The Planning Process - Internal Appraisal

• Evaluate skill sets required vis-à-vis existing
• Structure follows strategy
• People for key positions

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The Planning Process - Internal Appraisal

• Core Competencies
• something that underpins your activities
• critical to the business
• something you do better than the competition
• something which gives you a first mover advantage
  over competition
• something which gives you a sustainable
  competitive advantage over the competition

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The Planning Process Strategy Formulation

• Key Long Term Objectives
• Actions Required
• Change Process Required
• Timetable
• Monitor Performance

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Our Role

• Facilitators
• Research
• Presentation
• Funding

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Contacts

• Ken Johnson Partner
• Ken.m.johnson_at_ie.pwcglobal.com
• 091 764620
• Ann Lavin Senior Manager ann.lavin_at_ie.pwcglobal.
  com
• 091 779506
• Alan Luby Senior Manager
• alan.luby_at_ie.pwcglobal.com
• ? 091 779
• PricewaterhouseCoopers
• Harr-Mack House, IDA Small Business Centre, Tuam
  Road, Galway.
• Tel [phone] Fax [phone]

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