A Generic Approach to Strategic Management

Creating and Presenting Strategic Plans

Part 1

Case study: Company XYear 2013 2014 Score

Information 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

•Only interested in winners

Sport and Business

•Need to pick winners

•Need to be a winner

Sport: Horse Racing

My Horse

Frankie’s Horse

Frankie Dettoriand

cart horsesand

Throroughbreds

and

You!

Business

Sport and Business

•Only interested in winners: Rory

Sport and Business

•Need to pick winners: Rory

•Need to be a winner:Rory

Par

Strokes

AbovePar

Handi

-cap

Time

BelowPar

Actual

Actual below par

Actual above par Actual above

par

Handicap Returns to Part Over Time

•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

ROCE

AbovePar

Par ROCE

Time

BelowParActual

Par

Actual below par

Actual above parActual above par

ROCE Returns to Part Over Time

•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

•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

•Surely every business is different

Yes....and.....No

The Winning Rules for Every Business

The End