cpsp the generic approach part 1
TRANSCRIPT
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A Generic Approach to Strategic Management
Creating and Presenting Strategic Plans
Part 1
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Case study: Company X
Year 2013 2014 ScoreInformation about its competitive positionSales (£Mn) 9.15 10.12Market Share (%) 10 10Market Share Largest Competitor (%) 15 17RMS BCG 0.67 0.59Relative Quality (%) Inferior InferiorPrice Relative to Competition (%) 112 112New Product/Sales (%) 5 5R&D/Sales (%) 0 0Marketing/Sales (%) 0.5 0.5Competition Aggressive Aggressiv
eInformation about how it uses its assetsPlant and Equipment (£k) 1,200 1,500Sales/Total Assets 7.62 6.75Number of Employees 45 52Sales/Employees (£k) 203 195Capacity Utilisation (%) 80 80Degree of Integration (%) High HighInformation about leadership and behaviourLeadership skill Good GoodLabour Turnover (%) 0 0Information about its marketsMarket size (£Mn) 90 102Volume growth rate (%) 12.5 12.5No. of Immediate Customers accounting for 50% of Sales
150 140
% of Market held by 4 largest Companies
45 50
Typical Purchase Amount (£k) 30 33Life cycle of product in market Mature Mature% Employees in Trade Unions Nil NilProfitabilityROCE (%) 50 48
Question: What is your strategic assessment of this company and would you invest in it?
Answer: Yes or no.
Additional information
Quality: relative to competitors can only be superior, equivalent
or inferior.
Price: Equal to competitors is 100, 10% above competitors is
110 and 10% below competitors is 90.
Industry: Company X is in a construction related market - that’s all you need to know.
+ = Good, 0 = Neutral, - = Poor
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•Only interested in winners
Sport and Business
•Need to pick winners
•Need to be a winner
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Sport: Horse Racing
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My Horse
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Frankie’s Horse
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Frankie Dettoriand
cart horsesand
Throroughbreds
and
You!
Business
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Sport and Business
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•Only interested in winners: Rory
Sport and Business
•Need to pick winners: Rory
•Need to be a winner:Rory
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Par
Strokes
Above
Par
Handi
-cap
Time
Below
Par
Actual
Actual below par
Actual above par Actual above
par
Handicap Returns to Part Over Time
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•Long term factors determine a player’s success
Natural ability, age, dedication, coaching,(4 majors) These determine your handicap
•Short term factors influence performance on the day
Hangover, mental attitude, fitness, health hunger etc. These determine if you play above or below par
Golf and Business
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ROCE
AbovePar
Par ROCE
Time
BelowPar
Actual Par
Actual below par
Actual above parActual above par
ROCE Returns to Part Over Time
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•Long term factors determine every business’s profits
There are 4 major generic factors
These determine every business’s par ROCE
• Short term factors influence every business’s current profits
Management quality, motivation, competition, etc.
These determine if your profitability is above or below par
Winning in Business: Assumptions
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•Apply the 4 long term generics - key
•Examine the short-term influences
Before the rules, a crucial consideration
How to always win in every business
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•Surely every business is different
Yes....and.....No
The Winning Rules for Every Business
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The End
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