introduction objectives and content of the program roll-out action 1 action 2 action 3 action 4...

Introduction

Objectives and content of the program

Roll-outAction 1Action 2Action 3Action 4Action 5

Qtr 1 Qtr 2 Qtr 3 Qtr 4

Introduction

Conclusion

Module I

Module II Module III Module IV

Module V

Module VI

2IntroductionA.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING

Contents

Administrative issues

Strategy and its importance for A.T. Kearney

Defining strategy and how business unit strategy compares to other types of strategy

Objectives of A.T. Kearney’s Business Unit Strategy Training Program

Content of A.T. Kearney’s Business Unit Strategy Training Program


Welcome to the Business Unit Strategy Training Program

Source: A.T. Kearney

Develop skills in strategic analysis

Share and test experiences with others

Think about business issues from a strategic perspective

Network with like-minded colleagues

Help make ATK strategy capable

Goals of the Business Unit

Strategy Training Program



About the creation of this program


• The program was conceived and developed by the Global Strategy Initiative

(GSI), an initiative begun in 1997 to raise A.T. Kearney’s strategy capability.

The program is one of several deliverables resulting from the GSI

• The program materials were developed by a team of A.T. Kearney

consultants from around the world over the course of 9 months

• The program was created using a “bottom-up” approach, in which sources

from around the firm and academia were gathered and with time filtered into

the “finished product”

• This is the first version of the business unit training program. It will be

updated and improved on a regular basis by a new team of A.T. Kearney

consultants



Personal introductions


• Name

• Office

• Experience with A.T. Kearney

• Experience before A.T. Kearney

• Specific strategy highlights



What is your perspective on strategy, and what are your expectations of the course?

• What is your view on business unit strategy in general?

• What is your view on A.T. Kearney and business unit strategy?

• What are your expectations with regard to this training program?




Dinner

Schedule for the A.T. Kearney Business Unit Strategy Training Program



Monday Tuesday Wednesday Thursday Friday

Introduction

Module II

Lunch

Final presentation

Conclusion

Module III

Case presentation Case preparation

Dinner

Case preparation

DinnerDinner

Module V

Case preparation

Lunch

Module I

Lunch Lunch

Dinner

Case preparation

Case presentation

Guest Speaker

Strategy literature review

Module VI

Lunch

Module IV Guest Speaker

Case presentation

8-9

9-10

10-11

11-12

12-1

1-2

Time

2-3

3-4

4-5

6-7

8-9

9-10

10-?

7-8

5-6


What are our expectations of you?


Attentive Give your attention and participate

Punctual Be punctual to ensure efficient time management - we have a lot of material to cover

Curious Ask questions - there are no bad ones

Team-oriented Work within teams to reinforce concepts and enhance learning - and give it your full effort

Resourceful Draw upon what you have learned in the course and knowledge you have gained through project experiences and other schooling to augment analyses, presentations and group learning

Helpful Provide feedback so we can make the course even better


Expectation Comments


Contents







19981990-1997

The consulting industry has undergone continuous change during the past two decades

1980-1989

•Globalization of markets

•Building strategy capabilities•Cost reduction•Organizational design

•McKinsey•BCG•Bain•Booz•Allen & Hamilton

•Problem solving capabilities

•Deregulation•Convergence of industries•Dismantling of conglomerates•Downsizing

•Industry knowledge/insights•Process facilitators on operations/IT

•McKinsey•A.T. Kearney•BCG•Bain•Booz•Allen & Hamilton•Big six

•International office network•Industry practices

•Digital world•Virtual companies•Outsourcing•Regionalization (EU, NAFTA, APEC)

•Concentration of industries

•End-to-end capabilities

•McKinsey•A.T. Kearney•Big six (Big four)

•CEO control•Integrated solutions

External trends

Consultants’ value proposition

Key players

Key factors for success

Note: BCG, Bain, and Booz•Allen & Hamilton are not considered as key players of the future, based on with their present strategy focusedoffering. Shifts in focus or mergers and acquisitions can make these players more viable competitors in the future




A.T. Kearney must improve its strategy capability to become end-to-end capable



Strong capabilities

Weak capabilities

Strategy OperationsInformation technology

A.T. Kearney’s end-to-end capabilities

Need for improvement on a global

basis

A.T. Kearney’s current value proposition

2

5

5 5

1


Introduction to A.T. Kearney’s Strategy Practice



Strategy practice mission statement

We seek to build the premier capability in developing value and growth

strategies for major corporations worldwide and in driving implementation

to measurable results

We shall broaden our service offerings to include greater perception, ideas, frameworks and methodologies for solving corporate and business unit issues

We shall broaden our focus to strengthen current account relationships, while building relationships with the leaders of the future

We shall achieve the image as a great strategic consulting company based on delivering superior contributions

We shall focus on further developing the growth potential across industries, particularly as it relates to information and technology


A.T. Kearney’s value proposition in strategy

“A.T. Kearney’s Strategy Practice helps clients turn strategy into action. It sees

strategy as the design of the entire business system and an integrated set of actions to

continuously create and redefine competitive advantage. This is done through superior

customer value with the aim of maximizing shareholder value in the long term”




Contents







Some strategy definitions

Source: Want, R.L. (1988); A New Translation of Sun Tzu’s Classic “The Art of War”;Chandler, A.D. (1960); Strategy and Structure; Ohmae, K. (1976); Mind of the Strategist; Quinn, J.B. (1988); Strategies for Change; Porter, M.E. (1980); Competitive Strategy; Johnson, G. & Scholes, K. (1993); Exploring Corporate Strategy

• Strategy is the great work of the organization. In situations of life or death, it is the Tao of survival or extinction. Its study cannot be neglected

• The determination of the long run goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals

• Strategy is the way in which a corporation endeavors to differentiate itself positively from its competitors, using its relative corporate strengths to better satisfy customer needs

• Strategy is the pattern or plan that integrates an organization's major goals, policies, and action sequence into a cohesive whole. A well-formulated strategy helps to marshall and allocate an organization’s resources into a unique and viable posture based on its relative internal competencies and shortcomings, anticipated changes in the environment, and contingent moves by intelligent opponents

• Strategy is the matching of a company’s strengths and weaknesses to the opportunities and threats in the environment

• Strategy is the direction and scope of an organization over the long term: ideally, which matches its resources to its changing environment, and in particular its markets, customers or clients so as to meet stakeholder expectations

Sun Tzu

Alfred D. Chandler, Jr.

Kenichi Ohmae

James Brian Quinn

Michael Porter

Gerry Johnson & Kevan Scholes

DefinitionAuthor(s)



A.T. Kearney’s business unit strategy definition enables consultants to carry out an “acid test” as to whether the client has a clear strategy that can enable the company to achieve success

A Business Unit Strategy is about ...

an integrated set of actions . . .

to design the entire value system . . .

to continuously create and rede-fine competitive advantage . . .

throughsuperiorcustomer value . . .

• Does thecompany have a key strategicobjective?

• Is the company maximizing shareholder value?

• Is the client's business customer oriented?

• Does the customer perceive sufficient value?

• Is the client's business competition oriented?

• Is the competitive advantage sustainable?

• Is the delivery mechanism inplace to meetstrategicobjectives?

• Is the value system effectively structured?

• Does the clientmanage thevalue chain in an integrated way?

• Does its plan include all of the needed actions?

with the aim of maximizing shareholder value in the long-term




The A.T. Kearney definition of BU strategy reflects the importance that the firm places on strategy for the future success of the company

an integrated set of actions . . .

to design the entire value system . . .

to continuously create and redefine competitive advantage . . .

through superior customer value . . .

with the aim of maximizing shareholder value in the long-term

A program of specified organizational, manufacturing, financial, and managerial actions aimed at integrating all resources of a BU towards a common goal

The sequence of steps and their respective elements (technology, production design, sales, distribution, etc.) by which companies in a given business produce their goods or services and deliver to the customer

Competitive advantage is what a company possesses when it earns or has the potential to earn a higher ratio of profit than its competitors. Competition without an advantage for any particular competitor results in a totally competitive market. The market’s forces will not allow any company to realize any returns beyond the cost of equity

Competitive advantage needs to be sustainable in a way that competitors cannot copy or nullify the particular advantage

The “value” that an end-user receives from the product, which could be economic (low price through cost reduction) or perceived benefit (qualitative) contributed by the product

By maximizing profits, companies maximize shareholder value (the economic value received by owners of equity through dividend payments and/or increases in share price). Shareholder value maximization is widely seen as the appropriate goal of a company and the primary yardstick for measuring performance




Although strategy can encompass corporate, business unit and functional strategy, the focus of this training program is on the business unit

Industry

Corporate

Business unit

• Corporate strategy defines the scope of the company in terms of the industries and markets in which its various business units compete

• Strategies for industry restructuring

• Business unit strategy defines how the company competes within a particular industry or market

“How to compete”“Where to compete”


Business unit

R&D

Personnel

Finance

Production

Sales and marketing

• Functional strategy defines the detailed deployment of resources at the operational level

• Corporate strategy and finance• M&A&D• Design of the corporation and

corporate center• Resource allocation

• Market and competitive strategies



What is a strategic business unit (SBU)?

Source: A.T. Kearney; Kotler, P. (1997); Marketing Management

• A strategically and functionally distinct execution-oriented entity that is usually a subset of a corporation

• A unit that has a:– Well-defined market (or market

segments)– Well-defined group of competitors– Well-defined business system that

serves the market

• A unit grouped as such to optimize the collective organizational capabilities among its constituent entities

Definition of an SBU

• It is a single business, often with its own P&L responsibilities, or collection of related businesses that can be planned separately from the rest of the corporation/other business units

• It has its own competitors, which it is trying to surpass

• It has a manager who is responsible for strategic planning, profit, and performance

Some traditional characteristics



Iterative process

The main elements of a business unit strategy


Product/market“Where to compete”

In which segments should the company compete?

Business system“How to compete”

How should the business system be designed?

Strategic roadmap“When to compete”

Capabilities?

Competitor reaction?

Action?Critical

path

?

?

At what time and in which sequence should a strategy be executed?

R&D ServiceS&MManuf.Design



Strategy projects differ from other types of engagements in several ways


• Unique to each engagement and therefore issue-driven and more flexibly structured

• There is not one approach that will work for every situation. However, for every company in every situation, there will be an ideal approach

• Broader in scope

• More long-term oriented in nature and results might often be intangible for several years

• Characterized by ambiguity and a high degree of uncertainty as consultants often don’t know where the project will “end up”

• Characterized by many iterations throughout the project due to new findings which can result in changes to the scope and the nature of the project

• Characterized by a process and not a single approach



Strategy projects differ from other consulting projects in their process approach

Mechanical systems thinking Intuition Strategic thinking

Problem prototype

Process of thought

Solution

Rearrangement of elements

Local optimization, or seeing the tree, not the forest

Transformation or changed configuration

Source: Ohmae, K. (1976); The Mind of the Strategist



Contents







The main objectives of the program



• Strengthen A.T. Kearney’s overall strategy consulting delivery capabilities

• Raise A.T. Kearney consultants’ strategy skills to a higher level

• Teach A.T. Kearney consultants techniques likely to be applied in many future strategy engagements

• Teach A.T. Kearney’s unique and execution- oriented perspective on strategy

• Establish a common vocabulary and point-of-departure for all A.T. Kearney strategy engagements

Company objectives

• Add to portfolio of consulting skills

• Offer broader career possibilities within A.T. Kearney

• Satisfy intellectual curiosity

• Broaden one’s perspective towards consulting engagements

Individual objectives


Take-away objectives from the “instruction” and “case” sections of the program



• Understanding of the fundamental strategy analysis techniques

• Familiarization with strategy concepts that consultants are most likely to apply

• Endowment of knowledge that enables consultants to “know where to go,” when asked to use the techniques

• Ability to practically apply the knowledge gained from the course in strategy engagements

The “instruction” section

• Reinforce the concepts taught during the class

• Understand when, how, and to what extent to apply the techniques - realizing that use of the analyses will vary with each engagement

• Realize that other project-specific strategy techniques are also required in a consulting engagement

• Understand how to structure a logical and methodical game plan when approaching a strategy project

• Be prepared to “hit the ground running” when staffed on an assignment

The “case” section


ExampleA specific illustration or application of a deliverable, technique, or tool, generally drawn from a client engagement butsanitized so that the client is unrecognizable

Tool A spreadsheet, model, database, survey or software used as part of a technique to produce a deliverable

Technique A method, model, or calculation that produces a deliverable

DeliverableA result or insight necessary for the client to reach its objective; that which A.T. Kearney delivers to our client (or tointernal clients within A.T. Kearney) as a result of our proposed solutions and engagement efforts

Approach A logical structure or sequence of deliverables that might span frameworks. There is no one “approach” to strategy

A question which expresses the client’s concern or the uncertainties which must be resolved to achieve the client’sobjective. Issue questions are not rhetorical, they should have clear alternative solutions and significant consequences associated with the answer

FrameworkA way of looking at a client’s business issue; a set of building blocks, planks or beliefs that determine at a high levelhow we might approach a client issue; that ultimately translates to a collection of deliverables

Business issue

The objective of the training program is to teach a set of techniques that form the building blocks of analysis in strategy engagements and not to teach an approach

Issue/clientobjective

Approach Deliverable Technique

Tool

Uses

Contains

Framework

Example

ShowsShows

Source: A.T. Kearney, Centres of Excellence


Solved by Defines


This program focuses on teaching techniques because there is not a standard approach to strategy



• Be flexible in modeling analyses after issues instead of being confined to rigid approaches that may not be relevant in all engagements

• Think with a strategic perspective

• Adapt skills to other types of consulting engagements

Techniques allow consultants to:

Overall strategy frameworks and

approaches are not the focus of this program as they vary greatly from

client to client and project to project


The training program focuses intensively on exercises and examples to ensure that the theoretical knowledge can be practically applied


Module Example Exercise Case

Motorola

Oil and gas services company

Food and beverage industry

Copier company

n.a.

Automotive industry

n.a.

Big Kahuna Company/ Cessna Aircraft Company

Airline industry

Coca Cola

n.a.

Petroleum industry

n.a.

I

II

III

IV

V

VI


The techniques taught in this program do not cover all of the areas that might be relevant in strategy projects

Illustrative

• The techniques which are taught in the program are the most commonly used techniques in BU strategy engagements

• However, some techniques are not described, because they either are covered by other training programs or do not specifically relate to BU strategies

BU strategy program

Finance(CEO Agenda)



Change Management

(Enterprise Transformation

)

Purchasing(Strategic Sourcing)


This program is complementary to A.T. Kearney’s other major training programs

BUS: Business Unit Strategy

CEO: CEO Agenda

ET: Revised version of “Transforming the Enterprise”

LSPD: Lead Strategy and Proposal Development

MS: VP- Mind setting program

NCO: New Consultant Orientation (including Pyramid and Consultant Process Workshop)

SS: Strategic Sourcing



Targetaudience

Businessprocess

Orientation

Engagement execution

Engagement management

Business development

Account management

Leadership

BA

Ass

ocia

te

Man

ager

Pri

ncip

al

Off

icer

CEOET

NCO

BUS/SS

LSPD

MS


This program can be viewed as A.T. Kearney’s “chess book”

If A.T. Kearney were a chess club, it would want to establish a set of commonly used, advanced and structured techniques to “play its own game”

To help clarify these techniques and their use, we are putting them in a “chess book” for the use of all club members

The goal of the chess book is not to develop

new or proprietary techniques, but to collect

and explain the most commonly used ones to ensure coherent and

successful chess playing




Contents







The structure of the Business Unit Strategy Training Program

Module II Structure and

dynamics of the industry

Module III Characteristics and

dynamics of the individual companies

Module IV Execution

capacity of the client

Module VI Implementable

recommendations

Module V Definition and

evaluation of strategic alternatives

Roll-outAction 1Action 2Action 3Action 4Action 5

Qtr 1 Qtr 2 Qtr 3 Qtr 4



Module I Identification of the key

issues of the engagement

Note: The order of presentation of the curriculum elements should not be interpreted as a sequential guideline for a strategy engagement. Different elements of the program may be referenced at different times in the engagement


The content of the program is structured such that related techniques are categorized into deliverables and related deliverables into modules


* Exercises are located separately in a workbook

Module: A collection of deliverables that together address a key issue

Deliverable: A collection of techniques that address specific issues or sub-issues

Technique: A specific analysis performed to test hypotheses

Description:

Usage:

Methodology:

Example:

Exercise*:

Conclusion:

A technique put into context through a definition and/or a description

Why, how, and when the technique is applied

The process for using the technique

A “real-life” presentation of a technique as it would be presented in its completed form

A short exercise that requires the participants to employ the technique

A summary of key points, strengths, weakness, and references



Modules I and II: Deliverables and Techniques

Module Deliverable Technique

I. Identification of the key issuesof the engagement

II. Structure and dynamics of theindustry

• Key issues of the engagement

• Industry structure

• Development of the industry

• Product/market analysis

• Demand and supply economics

• Industry analysis frameworks

• Issue analysis

• Players analysis

• Strategic group analysis

• Substitution analysis

• Supply chain analysis

• Exit and entry barrier assessment

• Industry strategic era analysis

• Life cycle analysis

• Trends analysis

• Size and growth of the market

• Product/market segmentation

• Demand and supply economics

• Structure-conduct-performance

• The five forces

• The strategic triangle




Modules III and IV: Deliverables and Techniques

III. Characteristics and dynamics of the individual companies

IV. Execution capacity of the client

• Overall company profile

• Product/market focus

• Overview of the value chain

• Financial resources and performance

• Company analysis frameworks

• Assessment of execution capacity

• Purpose of the organization

• Stakeholder analysis

• Strategic era analysis

• Strategic planning framework

• Evaluation of product/market segments

• Value chain analysis

• Cost and margin driver analysis

• Development over time

• Financial ratios

• 7S

• Benchmarking

• SWOT

• Operational capacity assessment

• Organizational capacity assessment

• Information technology capacityassessment




Modules V and VI: Deliverables and Techniques

V. Definition and evaluation of strategic alternatives

VI. Implementable recommendations

• Decision-making

• Long-term scenarios

• Generic strategy frameworks

• Implementable recommendations

• Decision tree

• Game theory

• Scenario planning

• End game

• Three generic strategies

• Gaining strategic advantage

• The growth matrix

• Implementation plans


introduction objectives and content of the program roll-out action 1 action 2 action 3 action 4...

Documents

business unit training

kearney n

business issues

kearney experience

kearney attentivegive

kearneys strategy capability

module v module

introduction conclusion