1、STRATEGIC PLANNING AND ORGANIZATION CLARITY Case Study, Concepts and Debatable IdeasKenny Ong CNI Holdings Berhad,Intro: CNI,20 years old Core Business: MLM Others: Contract Manufacturing, Export/Trading, eCommerce Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy,
2、Taiwan, Oman, United States, Vietnam Staff force: 500 Distributors: 200,000 Products: Consumer Goods and Services,“The digital watch didnt come from established watch companies, the calculator didnt come from slide rule or adding machine companies, video games didnt come from board-game manufacturer
3、s Parker Bros or Mattel, the ballpoint pen didnt come from fountain pen manufacturers, and Google didnt come from the Yellow Pages“ Bob Seidensticker, Futurehype,Whats wrong with Strategic Planning Today?,Long-term Plans Objectives Strategies Enablers Resources,Also known as L.O.S.E.R.,Whats wrong w
4、ith Strategic Planning Today?,Biggest Threats often come from OUTSIDE your normal industry Planning from the base of an Existing organization vs. zero-based Traditional Analysis (e.g. SWOT) based only on known or existing assumptions or knowledge Spending too much time in market research and analysi
5、s Defining the company from a Product/Service perspective vs. Category vs. JTBD (e.g. Coca-cola) Wrong Benchmark already successful vs. what made them successful New strategy, same people,Todays Agenda,Summary: Todays presentation,1. Business Model Clarity,2. Strategy Clarity,3. Execution Clarity,Wh
6、at is the Business Model?,USP,Market Discipline,Profit Model,Business Model: USP,Unique Selling Proposition (USP) = Targeted Customer = Core Buying Purpose/ Customer Value Proposition/ Job To Be Done (JBTD),Business Model: USP,“The Product is Not the Product” What is the customer really buying?What
7、is the “Core Buying Purpose”?What is the “Job To Be Done”?,Business Model: USP,Obstacles to JBTD: Insufficient WEALTH Insufficient ACCESS Insufficient SKILL Insufficient TIME,What is the Business Model?,USP,Market Discipline,Profit Model,Business Model: Profit Model,Business Model: Profit Model,Prof
8、it Model Examples: Gillette Shaver iPod and iTunes IBM and Lenovo GM and GM Finance Google and Ad Revenue McD and Drive-thru revenue, Subsidizing Hire Purchase Loan vs. reduce price to protect brand Oracle Project Financing over 4 years covering even non-Oracle components SaaS PAYU e.g. Siebel/Sales
9、force,Who Killed Disney?,Profit Model vs. Competition: DVD vs. video games and online movies car sales vs. car leasing newspaper vs. online news client server systems vs. SaaS,Bussinessweek, February 19 2009, “Hollywood Is Worried as DVD Sales Slow”,your greatest competitor for market share is often
10、 a different profit model,What is the Business Model?,USP,Market Discipline,Profit Model,Intro: Market Discipline,Mamak stall,Intro: Market Discipline,“They are the most innovative“ “Constantly renewing and creative“ “Always on the leading edge“,“A great deal!“Excellent/attractive priceMinimal acqui
11、sition cost and hassleLowest overall cost of ownership “A no-hassles firm“Convenience and speedReliable product and service,“Exactly what I need“Customized productsPersonalized communications “Theyre very responsive“Preferential service and flexibilityRecommends what I need “Im very loyal to them“He
12、lps us to be a success,Product Leadership,Operational Excellence,Customer Intimacy,Operational Excellence (low cost producer),Ref: The Discipline of Market Leaders, Michael Treacy 1995,Product Leadership (best product),Customer Intimacy (best total solution),Strategy: Value Disciplines,www.myCNI.com
13、.my,www.OOBEY.com,Operational Excellence (low cost producer),Ref: The Discipline of Market Leaders, Michael Treacy 1995,Product Leadership (best product),Customer Intimacy (best total solution),Strategy: Value Disciplines,www.myCNI.com.my,www.OOBEY.com,Operational Excellence (low cost producer),Ref:
14、 The Discipline of Market Leaders, Michael Treacy 1995,Product Leadership (best product),Customer Intimacy (best total solution),Strategy: Value Disciplines,www.myCNI.com.my,www.OOBEY.com,Operational Excellence (low cost producer),Ref: The Discipline of Market Leaders, Michael Treacy 1995,Product Le
15、adership (best product),Customer Intimacy (best total solution),Strategy: Disciplines,HP well-balanced portfolio, mass customization,Acer super lean cost structure, aggressive pricing,Apple powerful products, premium pricing, limited range,Still Doing well in 2009,Business Model vs. Competition,Comp
16、etitor Anchoring vs. Business Model: Air Asia vs. Busses & Trains Tata Nano vs. Motorbikes iPod vs. Sony BMG Kindle (Amazon) vs. iPhone (Apple) Google vs. Newspaper (Ads) vs. Yahoo (Search) vs. Microsoft (Software) McD vs. Toys R Us,Shift your Business Model, and your Competitor will change,Operatio
17、nal Excellence Competitive price Error free, reliable Fast (on demand) Simple Responsive Consistent information for all Transactional Once and Done,Customer Intimacy Management by Fact Easy to do business with Have it your way (customization) Market segments of one Proactive, flexible Relationship a
18、nd consultative selling Cross selling,Product Leadership New, state of the art products or services Risk takers Meet volatile customer needs Fast concept-to- counter Never satisfied - obsolete own and competitors products Learning organization,Strategy: Value Disciplines,www.myCNI.com.my,www.OOBEY.c
19、om,The McPlaybook*,Make it easy to eat 50% drive-thru Meals held in one hand,Make it easy to prepare High Turnover Tasks simple to learn & repeat,Make it quick “Fast Food” Tests new products for Cooking Times,Make what customers want Prowls market for new products Monitored field tests,*Adapted from
20、: Businessweek , Februrary 5th 2007,www.myCNI.com.my,www.OOBEY.com,Operational Excellence (low cost producer),Ref: The Discipline of Market Leaders, Michael Treacy 1995,Product Leadership (best product),Customer Intimacy (best total solution),Strategy: Disciplines,Business Model,1. change one, effec
21、t three,2. change one, change model,Summary: Todays presentation,1. Business Model Clarity, Done,2. Strategy Clarity,3. Execution Clarity,2. Strategy Clarity,Hope is not a strategy,What is Strategic Planning?,Strategic Planning,Variables: Research Growth Risks Stakeholders Constraints SWOT Misc.,Out
22、put: Plans Priorities KPIs,Before we start,Which comes first? Strategies - KPI? KPI - Strategies?,Before we start,Which comes first? Strategies - KPI? KPI - Strategies?,already know our priorities, aware of all strategy options available creating something UNIQUE, INNOVATIVE and DISRUPTIVE e.g. Air
23、Asia conducting a business Turnaround e.g. MAS,Before we start,Which comes first? Strategies - KPI? KPI - Strategies?,want to find out possible strategies, determine our priorities first thru selection of important KPIs; growing through normal business, not a Turnaround.,Business Situation vs. Focus
24、,Upturn,Flat,Downturn,Fight Complacency Sharpen Edge Keep Momentum Conquer,Change mgmt Reduce Fat Continuity Everyone Happy,Innovation Acquire Profits Build momentum,Sales Cash Flow,Talent Mgmt Innovation/R&D Early wins Slow Down HR Costs,Top Talent focus Sales, Sales, Sales Increase attrition,www.m
25、yCNI.com.my,www.OOBEY.com,Business Situations vs. Focus,Upturn,Flat,Downturn,Fight Complacency Sharpen Edge Keep Momentum Conquer,Change mgmt Reduce Fat Continuity Everyone Happy,Innovation Acquire Profits Build momentum,Sales Cash Flow,Talent Mgmt Stack R&D Early wins Slow Down HR Costs,Top Talent
26、focus Stack Sales Increase attrition,Many times, you need a different CEO/Leader/Management Team for each business situation,www.myCNI.com.my,www.OOBEY.com,What is your Goal?,Cost Reduction Growth Both?,Growth Strategy,“Double-Digit Growth”, Michael Treacy,www.myCNI.com.my,www.OOBEY.com,How Markets
27、determine Growth Strategies (1),Growth Rate,www.myCNI.com.my,www.OOBEY.com,Churn Rate,How Markets determine Growth Strategies (2),www.myCNI.com.my,www.OOBEY.com,How Markets determine Growth Strategies (3),Example: XYZ Sector,www.myCNI.com.my,www.OOBEY.com,Downturn Strategy,Downturn Strategy,Downturn
28、 Strategy,Downturn Strategy,Side Notes on Cost Reduction Strategy,Cost Reduction,5% - 30%,30% - 80%,Business Situation vs. Sales,Upturn,Flat,Downturn,Fight Complacency Sharpen Edge Keep Momentum Conquer,Change mgmt Reduce Fat Continuity Everyone Happy,Innovation Acquire Profits Build momentum,Sales
29、Cash Flow,Talent Mgmt Innovation/R&D Early wins Slow Down HR Costs,Top Talent focus Sales, Sales, Sales Increase attrition,www.myCNI.com.my,www.OOBEY.com,Optimize customers current assets Offset customers costs Focus market share CEO and Sr. Mgmt in the field Sell up the buyer chain Motivate troops
30、Add extra services Control troop emotions Specialized vs. general teams, i.e. sell support services, sell equipment, existing customers etc. (e.g. Xerox),Marketing Clarity:,Goods Return Policy “I dont care if they return a Goodyear tire. If they said they paid $200, pay them $200.”,Nordstrom does no
31、t sell tires,Marketing Clarity: CNI,“CNI is more than business. We strongly believe that every individual has the opportunity to attain a better living through CNI.”,Marketing Clarity: Segment & Target,Who?,Experience,Swing,Former,Opposition,Branding Clarity: Segment & Target,Who are you attracted t
32、o?,Branding Clarity: Basics & Differentiators,Segments,Targets,Targets,Basics,Differentiators,Experience = Branding,Swing Loyalty,Swing Customers are “loyal” because: Individual Relationships Convenience (at that point in time) Tied-up Product Uniqueness Promotions No better alternative Downlines No
33、 known alternative Psychologically lazy,Swing = Best alternative at the current moment until I find another alternative,“Swing” Marketing,Increase switching costs Mega packages Community Reward programs (Points) Membership Subscription Email communication,Newsletters Personalized alerts Survey Sugge
34、stion Box Switching Techniques (e.g. Balance Transfer of credit cards),R&D Clarity: The “Old” Days,Invent,R&D,R&D Clarity: The “New” Days,Invent,Build,Market,Sell,R&D Clarity: Marketing 101,R&D Clarity: Marketing & R&D,Features,Brand,Target,Logistics,R&D Clarity: Marketing & R&D,Features,Brand,Targe
35、t,Logistics,Price,Promotion,Place,Product,IKEA Apple Nestle Asus,R&D Clarity: RD&D,Garnier Digi,Design Point 1: Designed to SELL Design Point 2: Before-After R&D,R&D Clarity: RD&D,CNI Waterlife,Design Point 1: Designed to SELL Design Point 2: Before-After R&D,R&D Clarity: RD&D,Research, Development
36、& DESIGN,Features Benefits Differentiation,R&D Clarity: RD&D,Research, Development & DESIGN,Function Aesthetics Logistics,Design Point 1: Designed to SELL Design Point 2: Before-After R&D,Innovation Clarity,Product/ Service,Process,Business Model,Break-through,Sub-stantial,Incre-mental,Summary: Toda
37、ys presentation,1. Business Model Clarity, Done,2. Strategy Clarity,3. Execution Clarity, Done,3. Execution Clarity,Accountability, Benchmarking, BSC, KPIs and other evils,“in the past 18 months, we have heard that profit is more important than revenue, quality is more important that profit, people
38、are more important than profit, customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our performance is inconsistent“,CEO, Anonymous,Wrong KPIs,“What is the moral of the story?”,KPIs and Behavior,Bef
39、ore: “Handle Time” Per Call Motivated Call Centre staff to transfer callers, getting rid of complainers, making them someone elses problem Callers at 45% chance of being transferred 7,000 customers each week suffered transfers 7 times or more,KPIs and Behavior,After: “Minutes Per Resolution” of a pr
40、oblem Resolution in ONE CALL become the core goal Reduced probability of call transfers from 45% to 18%,Why BSC?,Reason 1: Balanced Reason 2: Cause-and-Effect,www.myCNI.com.my,www.OOBEY.com,Financial “To satisfy our stakeholders, what Financial objectives must we accomplish?”,Cause and Effect,Revenu
41、e Growth,Base Retention,Share Gain,Positioning,Adjacent Market,New Business,Operational Excellence,Product Leadership,Customer Intimacy,Competencies,Information Systems,Motivation, empowerment, alignment,Financial,Learning & Growth,Internal Process,Customers,Investment Strategy,Productivity,Market V
42、alue,Linking BSC to Strategy,Financial,Learning & Growth,Internal Process,Customers / Distributors,Cause and Effect: An Example,Example: Selection of KPIs for BSC,Customer satisfaction Customer loyalty Market share Customer complaints Complaints resolved on first contact Return rates Response time p
43、er customer request Price relative to competition Total cost to customer Average duration of customer relationship Customers lost Customer retention Customer acquisition rates Percentage of revenue form new customers Number of customers Annual sales per turnover,Win rate (sales closed/sales contact)
44、 Customer visits to the company Hours spent with customers Marketing cost as a percentage of sales Number of ads placed Number of proposals made Brand recognition Response rate Number of trade shows attended Sales volume Share of target customer spending Sales per channel Average customer size Custo
45、mers per employee Customer service expense per customer Customer profitability Frequency (number of sales transactions),Financial,Learning & Growth,Internal Process,Customers / Distributors,Example: 1st Level BSC & KPIs,Profit after Tax. Revenue. Cash-to-cash cycle. Operating cash flow,Average Reven
46、ue Per User (ARPU), Customer Complaints. Customer Acquisition Rate. Product Availability. Product Quality & Service. Renewal Annual Subscription. No. of Active Members. No. Retail Points.,Customer Database Availability. Accuracy of Forecast Planning. Continuous Improvement. Response Time to Customer
47、 Needs. Perfect Order Fulfillment. Inventory Turnover. Number of Effective Loyalty Programs. On Time Delivery. Number of Effective A&P,% of staff evaluated on Core Competency Framework. % of staff with Career Development Plans. No. of training hours completed per staff. % of staff with access to str
48、ategic information. Q12 Index. % staff evaluated on Culture alignment,Sample: Other 1st Level KPIs across industries,Lagging and Leading KPIs,Historical, Outcome, Results, 1st Level, Usually Financial or tangible, Quarterly and Annually,Current, Indicators, Drivers, 2nd Level onwards, usually non-fi
49、nancial or intangible, Weekly, Monthly and Quarterly,Developing Driver KPIs,What is the Objective?,Do-or-Die KPIs for CNI Revenue ARPUSponsoring RetentionCommission Plan (BDP) Product Corporate Image,Operational Excellence (low cost producer),Ref: The Discipline of Market Leaders, Michael Treacy 1995,Product Leadership (best product),Customer Intimacy (best total solution),Strategy: Disciplines, Priorities, and KPIs,Operational Excellence Competitive price Error free, reliable Fast (on demand) Simple Responsive Consistent information for all Transactional Once and Done,
