1、Strategy Practitioner Tools,Core Tools October 1999,0, 1998, PricewaterhouseCoopers L.L.P.,DRAFT: FOR DISCUSSION ONLY /Version: 660_w3/ppt/sf,Table of Contents,1 ANALYSIS PLAN 2 BREAKTHROUGH MODEL 3 COMPETITIVE BENCHMARKING 4 COMPETITIVE POSITIONING 5 CORE COMPETENCTY ANALYSIS 6 CUSTOMER SEGMENTATIO
2、N 7 EXPERIENCE CURVE 8 FINANCIAL MODELING 9 FIT VS. ATTRACTIVENESS MODEL 10 FIVE FORCES ANALYSIS 11 GANTT CHART 12 GAP ANALYSIS 13 GROWTH SHARE MATRIX 14 INDUSTRY VALUE CHAIN ANALYSIS 15 ISSUE TREE/ISSUE MAP,16 KEY PERFORMANCE INDICATORS 17 MARKET PROFITABILITY 18 PORTFOLIO ANALYSIS 19 REAL OPTIONS/
3、STRATEGIC OPTION 20 SCALE CURVE 21 SCENARIO ENVISIONING 22 SENSITIVITY ANALYSIS 23 SEVEN S FRAMEWORK 24 STAKEHOLDER ANALYSIS 25 SWOT 26 VALUE BASED MANAGEMENT 27 VALUE CHAIN ANALYSIS 28 VALUE TREE 29 VOICE OF THE CUSTOMER,Analysis Plan Summary,The analysis plan details a problem-solving process and
4、specific analysis which must be developed to assess a hypothesis. The analysis plan must be flexible and that the analyses to be conducted and the deliverables to be produced may change during the course of the project.,Analysis Plan,Approach,Analysis Plan,When To Apply,When it is necessary to lay o
5、ut problem-solving process in depth/detail and identify the analyses which need to be undertaken to validate the selected hypotheses,Define an issue on which a specific action depends and phrase it as a “yes” or no” questionEstablish a hypothesis: a statement of likely resolution of the issue includ
6、ing the reasons for answering “yes” or “no”Develop an analysis statement that outlines the “models” that will be explored in order to prove or disprove the hypothesisIdentify the likely location or means of obtaining data to accomplish the analysisDevelop end products (presentations) to graphically
7、represent the output of the analysis,Citations - Client and Industry Experience,Analysis Plan,Compaq/Technology/Vasu KrishnamurthyGalileo/Travel/ Spencer Lin & Vasu KrishnamurthyPost Office Counters Ltd./Transportation Services/KIT databasePwC MCS/Consulting/Vasu KrishnamurthyUnited Airlines/Travel/
8、Vasu Krishnamurthy,Robert M. Grant, “Contemporary Strategy Analysis”, 3rd Edition,Source List,Breakthrough Model Summary,The Breakthrough model focuses attention on most substantial opportunities for creating value for customers and shareholders.,Breakthrough Model,External,Internal,Industry,Company
9、,Trends in the,economic,environment in,which the markets,exist,Best practices,across this and,similar industries,Market/product,strategy and basis,for competition,Capabilities of the companys,people, processes,technology, systems and,structure,1,2,3,4,Market/Product,Repositioning,Industry,Transforma
10、tion,Enterprise,Alignment,Best Practice,Performance,Approach,Breakthrough Model,When To Apply,Utilize the Breakthrough model to identify and categorize all opportunities to create substantial incremental shareholder value.,When creating a Breakthrough model, the following criteria should be consider
11、ed:Summarize all opportunities to improve business performance from other analysesCategorize them into four groups:Enterprise alignmentBest practice performanceMarket/product repositioningIndustry transformationDetermine approximate economic value of each type of strategy,Citations - Client and Indu
12、stry Experience,Breakthrough Model,Non-PwC:Toyota: the lean production system Frito-Lay: end-to-end supply chainmanagement and the use ofadvanced technology Intel: high velocity productdevelopment A: Internet basedchannels of distributionon behalf of shareholders.,Paul Elkin, “Mastering Business Pla
13、nning and Strategy: The Power and Application of Strategic Thinking”,Source List,Competitive Benchmarking Summary,Competitive Benchmarking is used to identify and measure the factors that determine why a process has specific cost, quality or timing attributes and incorporate the best practices into
14、an actionable change plan. It does so in part, by comparing a companys performance in key areas with respect to its competitors performance. Examples of presenting Competitive Benchmarking findings:,Competitive Benchmarking,Approach,Competitive Benchmarking,When To Apply,While not a comprehensive co
15、mparison, Competitive Benchmarking illustrates the efficiency of specific processes in comparison to a companys competitors. Select companies to benchmark against carefully - remember that companies outside the clients industry may be the best candidates. Ensure that data collected are comparable an
16、d the the right processes are benchmarked; those which have the biggest impact on customer service/satisfaction/value.,Examine the issues most important to the companys situation to determine whether roles, processes, or strategic issues should by benchmarkedIdentify key performance variables and de
17、termine which companies to use for comparison (both within companys industry and outside the industry)For process benchmarking, determine the metrics to be measured; these can be key performance indicators (KPIs), orother measurementsEstablish data collection methodology (industry sources, on-line d
18、atabases, on-site visits, phone interviews, survey questionnaires, competitors, etc.)Measure client company performanceMeasure performance of competitors and best practice leadersIllustrate the spectrum of performances on an appropriate graphDetermine gaps and reasoningDevelop action plans/recommend
19、ation to address gapsImplement actions and monitor progress,Citations - Client and Industry Experience,Competitive Benchmarking,Ball Corporation/Packaging /Vasu Krishnamurthy & Mike WeissMotorola/Technology/Vasu KrishnamurthyPwC MCS/Consulting/Vasu KrishnamurthyUnited Airlines/Travel/Vasu Krishnamur
20、thy,Paul Elkin, “Mastering Business Planning and Strategy: The Power and Application of Strategic Thinking”Liam Fahey, Robert M. Randall, “The Portable MBA in Strategy”Robert M. Grant, “Contemporary Strategy Analysis”, 3rdEditionMichael Gould, Andrew Campbell, Marcus Alexander, “Corporate-Level Stra
21、tegy: Creating Value in the Multibusiness Company”,Source List,Competitive Positioning Summary,Competitive Positioning analysis shows how a company is positioned in its industry relative to its competitors,Positioning Map Example: Entertainment,High,Low,Low,High,Channel Strength,Content Strength Int
22、ellectual property strength Product strength,Competitive Positioning,Approach,Competitive Positioning,When To Apply,To show clients that you understand their market and position. Can also be used to develop strategic recommendations.,Citations - Client and Industry Experience,Competitive Positioning
23、,Barclays Global Investors (BGI)/Banking/KIT database Blue Cross/Insurance/Mike WeissBoots/Retail/KIT databaseGalileo/Travel/ Spencer Lin & Vasu KrishnamurthyGiddings & Lewis/Machine Tool/Vasu KrishnamurthyOsh Kosh B Gosh?SP/Retail/Mike WeissPwC MCS/Consulting/Vasu KrishnamurthySave & Prosper/Bankin
24、g/KIT database,Paul Elkin, “Mastering Business Planning and Strategy: The Power and Application of Strategic Thinking”Robert M. Grant, “Contemporary Strategy Analysis”Henry Mintzberg, James Brian Quinn, Sumantra Ghoshal, “The Strategy Process” Henry Mintzberg, James Brian Quinn, “The Strategy Proces
25、s:Concepts, Contexts, Cases”,Source List,Core Competency Analysis Summary,Core Competency Analysis provides a practical and systematic process to identify a companys core competencies and assess key competitive advantages.Examples of Core Competency Models:,Core Competency Analysis,Approach,Core Com
26、petency Analysis,When To Apply,Employ Core Competency analysis to evaluate a companys capabilities in each function of the value chain with a hierarchical model which identifies capabilities and the degree to which they provide competitive advantage and can be leveraged. Please note that there is a
27、risk of defining too narrowly the market in which the client competes, thus focusing on the wrong competency requirements or a subset of the competencies required to effectively compete. It is key that those projects and programs that aim at developing core competencies should not be open to re-prio
28、ritization at a later stage.,Adhere to the following guidelines when analyzing core competencies and developing a Competencies Model - Framework:Interview company senior management and business line management as well as competitor managementDefine companys business system and activities performed w
29、ithin each function - Based on the total range ofcapabilities identified, ask the questions:Which ones do we have to be “good at”?Which ones do we have to be “market/world leading at”?Determine whether each activity is a primary capability, a critical enabling capability, a critical strategic capabi
30、lity, or a core competence, based on the degree to which the activity provides competitive advantage and can be leveragedNote that while all the identified capabilities will be critical to achieve the vision and strategy, the questions will help distinguish core from non-core by invoking management
31、attention and reflection in a systematic and structured manner,Citations - Client and Industry Experience,Core Competency Analysis,Galileo/Travel/ Spencer Lin & Vasu KrishnamurthyGiddings & Lewis/Machine Tool/Vasu KrishnamurthyMetLife/Insurance/KIT database PwC MCS/Consulting/Vasu KrishnamurthySave
32、& Prosper/Banking/KIT database,David A. Aaker, “Developing Business Strategies”, 5th Edition Robert M. Grant, “Contemporary Strategy Analysis”, 3rdEditionMichael Gould, Andrew Campbell, Marcus Alexander, “Corporate-Level Strategy: Creating Value in the Multibusiness Company”Henry Mintzberg, Bruce Ah
33、lstrand, Joseph Lampel, “StrategySafari: A Guided Tour Through the Wilds of StrategicManagement”Henry Mintzberg, James Brian Quinn, Sumantra Ghoshal,“The Strategy Process”Henry Mintzberg, James Brian Quinn, “The Strategy Process:Concepts, Contexts, Cases,Source List,What are the objectives of the se
34、gmentation? Better ROI, redistribute spending, change sales efforts?,What data is needed to meet the objectives? How much of that data can be obtained internally? externally? What data is essential to the segmentation? What data can be a focus for further improvement in the future?,Define the variab
35、les of the model with accessible data? Develop an analytical tool that utilizes the variables to determine a customer ranking or grouping (ie most ideal partner to most inefficient partner). Refocus internal efforts based on segmentation outcome.,Establish a way to capture the key data needed to seg
36、ment customer base. Utilize the data on an ongoing basis to improve performance and continually reward the better performing customers.,Customer Segmentation Methodology,High level work flow for a customer segmentation,Customer Segmentation Methodology Summary,Customer Segmentation Summary,Customer
37、segmentation is a division of a market into distinct groups of buyers who might require separate products and/or marketing mixes.,THE CONVERTER MARKET CAN BE SEGMENTED USING TWO VARIABLES: ECONOMIC RISK AND FABRIC INNOVATION,Economic Risk Inventory position Credit status Product mix Customer base,Fa
38、bric Innovation Percent novelties Order size Number of collections,High,Low,High,Low,Customer Segmentation,Approach,When To Apply,Applicable when it is useful to better identify marketing opportunities, to develop the right offering for each target market, or to be able to reach the target market in
39、 the most efficient manner possible.,Customer Segmentation,Citations - Client and Industry Experience,Customer Segmentation,Galileo/Travel/ Spencer Lin & Vasu KrishnamurthyGeneral Mills/CIP/Johan SauerGiddings & Lewis/Machine Tool/Vasu KrishnamurthyThe Littlewoods Organization/Retail/KIT databasePwC
40、 MCS/Consulting/Vasu Krishnamurthy,Paul Elkin, “Mastering Business Planning and Strategy: The Power and Application of Strategic Thinking” Robert M. Grant, “Contemporary Strategy Analysis” Henry Mintzberg, James Brian Quinn, Sumantra Ghoshal, “The Strategy Process”,Source List,The Experience Curve f
41、orecasts future trends in cost/labor and determines the relative cost position of various competitors. The tool quantifies cost savings, theoretically achieved through experience gained in conducting a process.,Experience Curve Summary,The Experience Curve,EXPERIENCE CURVE FOR WIDGETS - PROJECTIONS,
42、Approach,Experience Curve,Creating the Experience Curve requires yearly accumulated production volume for the entire indicative and individual competitors, and the unit cost for the entire industry and competitors (use price data if cost data is not available.) Data can be secured from government ag
43、encies, trade associations, and from internal company data.Step 1 Plot accumulated volume for different years against unit cost on a log/log scale (unit cost should be deflated by using a general index such as the GNP deflator, or specific indices for the various pars of cost such as materials and l
44、abor.) Step 2 Add a standard regression line to the graph.,CAVEATS: Cost figures must be defined in the same manner by all sources of data. If company cost-accounting data is used, it may need to be adjusted for overhead allocations and other costs not considered to be part of the activity, process,
45、 or product under study. If price data is used pricing behavior of participants needs to be considered Innovation within any functional area (e.g., product, process, distribution) can render the current experience curve useless as a strategy tool. Therefore, it is important to understand the environ
46、mental and customer trends in order not to rely too heavily on this analysis The experience curve is only an analytical concept, and there is no guarantee that costs will actually decrease according to it. The company must actively manage costs down,When to Apply,The Growth Share Matrix may be overl
47、y simplistic, market share does not always correlate with profitability and not all businesses have the same asset intensity. Conclusions are sensitive to business and market definitions; where lines are drawn. Practitioners must be creative, careful and consistent with market data.,Citations - Clie
48、nt and Industry Experience,Experience Curve,Source List,David A. Aaker, “Developing Business Strategies”, 5th EditionThe Boston Consulting Group, “Perspectives on Strategy”Robert M. Grant, “Contemporary Strategy Analysis”, 3rdEditionHenry Mintzberg, Bruce Ahlstrand, Joseph Lampel, “StrategySafari: A
49、 Guided Tour Through the Wilds of StrategicManagement,Financial Modeling Summary,Financial Modeling,The financial model will allow us to test management assumptions and understand how different actions may affect performance on some key competitive dimensions.,Approach,When To Apply,Financial Modeling is effective in analyzing how a companys performance, in core areas of business, will be affected by pursuing different courses of action. This tool facilitates an understanding of various cause-effect and provides a model by which to test various “what if“ statements.,
