普华永道战略分析框架

Strategy Practitioner ToolsCore ToolsOctober 19990 1998,PricewaterhouseCoopers L.L.P.DRAFT:FOR DISCUSSION ONLY/Version:660_w3/ppt/sfSC111898KR-Sydney1 1998,PricewaterhouseCoopers L.L.P.Table of Contents1ANALYSIS PLAN2BREAKTHROUGH MODEL3COMPETITIVE BENCHMARKING4COMPETITIVE POSITIONING5CORE COMPETENCTY ANALYSIS6CUSTOMER SEGMENTATION7EXPERIENCE CURVE8FINANCIAL MODELING9FIT VS.ATTRACTIVENESS MODEL10FIVE FORCES ANALYSIS11GANTT CHART12GAP ANALYSIS13GROWTH SHARE MATRIX14INDUSTRY VALUE CHAIN ANALYSIS15ISSUE TREE/ISSUE MAP16KEY PERFORMANCE INDICATORS17MARKET PROFITABILITY 18PORTFOLIO ANALYSIS19REAL OPTIONS/STRATEGIC OPTION20SCALE CURVE21SCENARIO ENVISIONING22SENSITIVITY ANALYSIS23SEVEN S FRAMEWORK24STAKEHOLDER ANALYSIS25SWOT26VALUE BASED MANAGEMENT27VALUE CHAIN ANALYSIS28VALUE TREE29 VOICE OF THE CUSTOMERSC111898KR-Sydney2 1998,PricewaterhouseCoopers L.L.P.Analysis Plan SummaryThe analysis plan details a problem-solving process and 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 PlanCLIENT EXAMPLE:HYPOTHESIS/ANALYTICAL PLANHypothesisAnalysisInfo.RequiredInfo.SourceEnd ProductsOverall HypothesisOrganizational philosophy needs to be modifiedSupporting HypothesisExisting organization does not adequately support the business strategy Define business system,operating environment Define CSFs,organizational requirements along business system Define how existing organization supports business system,CSFs Key activities,processes by LOB CSFs along business system by LOB Existing organizational elements impacting business system Management interviews Secondary research HR documentsBusiness System DiagramsActivityCSFEven after adjusting for asset write-up,financial performance has not met corporate expectations or competitive standards due to an inappropriate organization(and cost)structure Financial performance petitors,budget/plans Overview of cost structure(e.g.,fixed vs.variable costs)ROA,NI adjusted for asset write-ups Historic and projected financial data Asset write-up information Summary cost,volume info for production units Annual reports,10Ks,10Qs,etc.Company financial reports Financial department interviewsFinancial MetricsThe increasing complexity of business and the evolving importance of,and coordination required between specialized expertise requires changes in the decision-making process and information flows Define actual vs.perceived vs.“real”organization chart,decision-making process/responsibilities;identify gaps Define expertise,info required to make decision,organizational requirements Define evolving nature of organization and information flows Key decisions Key individuals involved in decision-making process Information flows Management interviews Organization charts Memos/documents on management processes System flow chartsData/Info FlowsOrg ChartsSC111898KR-Sydney3 1998,PricewaterhouseCoopers L.L.P.ApproachAnalysis PlanWhen To ApplyWhen it is necessary to lay out 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”question Establish a hypothesis:a statement of likely resolution of the issue including 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 hypothesis Identify the likely location or means of obtaining data to accomplish the analysis Develop end products(presentations)to graphically represent the output of the analysisSC111898KR-Sydney4 1998,PricewaterhouseCoopers L.L.P.Citations-Client and Industry ExperienceAnalysis Plan Compaq/Technology/Vasu Krishnamurthy Galileo/Travel/Spencer Lin&Vasu Krishnamurthy Post Office Counters Ltd./Transportation Services/KIT database PwC MCS/Consulting/Vasu Krishnamurthy United Airlines/Travel/Vasu Krishnamurthy Robert M.Grant,“Contemporary Strategy Analysis”,3rd EditionSource ListSC111898KR-Sydney5 1998,PricewaterhouseCoopers L.L.P.Breakthrough Model SummaryThe Breakthrough model focuses attention on most substantial opportunities for creating value for customers and shareholders.Breakthrough ModelExternalInternalIndustryCompanyTrends in theeconomicenvironment inwhich the marketsexistBest practicesacross this andsimilar industriesMarket/productstrategy and basisfor competitionCapabilities of the companyspeople,processes,technology,systems andstructure1234Market/ProductRepositioningIndustryTransformationEnterpriseAlignmentBest PracticePerformanceSC111898KR-Sydney6 1998,PricewaterhouseCoopers L.L.P.ApproachBreakthrough ModelWhen To ApplyUtilize 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 considered:Summarize all opportunities to improve business performance from other analyses Categorize them into four groups:Enterprise alignment Best practice performance Market/product repositioning Industry transformation Determine approximate economic value of each type of strategySC111898KR-Sydney7 1998,PricewaterhouseCoopers L.L.P.Citations-Client and Industry ExperienceBreakthrough ModelNon-PwC:Toyota:the lean production system Frito-Lay:end-to-end supply chain management and the use of advanced technology Intel:high velocity product development A:Internet based channels of distribution on behalf of shareholders.Paul Elkin,“Mastering Business Planning and Strategy:The Power and Application of Strategic Thinking”Source ListSC111898KR-Sydney8 1998,PricewaterhouseCoopers L.L.P.Competitive Benchmarking SummaryCompetitive 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 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 BenchmarkingAverage Speed of Answer(seconds)Call Abandon(%)Calls Handled In One Session(%)Average Calls/Rep/DayCompanyICSABench-markingStudyGEAnswerCenterTARP800-Number Survey(median)34651005376GeorgiaPowerCompany(AdvertiserSurvey)ICSABench-markingStudy with89%ofrespondentsGEAnswerCenterGTEAcmePowerCompanyestimateICSABench-markingStudyBostonEdison TARP800-NumberSurvey(median)GeorgiaPowerDellComputer 90%within Company95%greaterthanICSABench-markingStudyApexPower&Light80%withinTARP800-Number Survey(median)AcmePower20%3%30 10060 1750%100%6250857098193.75.06.07.01720284560MonthsHome GoodsPerishablesApparel Average=6.7 =Maximum#=Average or Most Common =Minimum02468101214161820ABCDEFGIJKLMNNEW PRODUCT DEVELOPMENT CYCLE TIMEBest Practices 3.55.04.56.513.55.06.09.07.06.010.56.04.5SC111898KR-Sydney9 1998,PricewaterhouseCoopers L.L.P.ApproachCompetitive BenchmarkingWhen To ApplyWhile not a comprehensive comparison,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 and 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 benchmarked Identify key performance variables and determine 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),or other measurements Establish data collection methodology(industry sources,on-line databases,on-site visits,phone interviews,survey questionnaires,competitors,etc.)Measure client company performance Measure performance of competitors and best practice leaders Illustrate the spectrum of performances on an appropriate graph Determine gaps and reasoning Develop action plans/recommendation to address gaps Implement actions and monitor progressSC111898KR-Sydney10 1998,PricewaterhouseCoopers L.L.P.Citations-Client and Industry ExperienceCompetitive Benchmarking Ball Corporation/Packaging/Vasu Krishnamurthy&Mike Weiss Motorola/Technology/Vasu Krishnamurthy PwC MCS/Consulting/Vasu Krishnamurthy United Airlines/Travel/Vasu Krishnamurthy 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”,3rd Edition Michael Gould,Andrew Campbell,Marcus Alexander,“Corporate-Level Strategy:Creating Value in the Multibusiness Company”Source ListSC111898KR-Sydney11 1998,PricewaterhouseCoopers L.L.P.Competitive Positioning SummaryCompetitive Positioning analysis shows how a company is positioned in its industry relative to its competitorsPositioning MapExample:EntertainmentStudio EStudio GStudio AStudio HStudio BStudio DStudio CStudio FHighLowLowHighChannel StrengthContent StrengthIntellectual property strengthProduct strengthLowMediumHighMarket StrengthCompetitive PositioningSC111898KR-Sydney12 1998,PricewaterhouseCoopers L.L.P.ApproachCompetitive PositioningWhen To ApplyTo show clients that you understand their market and position.Can also be used to develop strategic recommendations.STEPDATA REQUIREDSOURCE(S)1.Choose axes that are relevant to customer decision-making(first)and those which differentiate suppliers(second)2.Illustrate where competitors lie on map(s)3.Interpret map for strategic implications(e.g.,clusters or open spaces)Information on industry as a whole Information on competing companies strategies and positioning Trade associations Trade periodicals and publications Information services Analyst reports Various companies annual reports and other public information Interviews with competitor management Industry expertsSC111898KR-Sydney13 1998,PricewaterhouseCoopers L.L.P.Citations-Client and Industry ExperienceCompetitive Positioning Barclays Global Investors(BGI)/Banking/KIT database Blue Cross/Insurance/Mike Weiss Boots/Retail/KIT database Galileo/Travel/Spencer Lin&Vasu Krishnamurthy Giddings&Lewis/Machine Tool/Vasu Krishnamurthy Osh Kosh B Gosh?SP/Retail/Mike Weiss PwC MCS/Consulting/Vasu Krishnamurthy Save&Prosper/Banking/KIT databasePaul 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 Process:Concepts,Contexts,Cases”Source ListSC111898KR-Sydney14 1998,PricewaterhouseCoopers L.L.P.Core Competency Analysis SummaryCore 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 AnalysisMarketingExample:McDonaldsCustomerRefill SupportSales/DistributionOtherCustomer ServiceCritical Strategic Capabilities(SC)-The capabilities in which a company is a leader.These capabilities are the source of competitive advantage.Critical Enabling Capabilities(EC)-The capabilities in which a company is competitively equivalent to other market leaders.These capabilities are often the source of a barrier to entry.Strategic/Financial PlanningTechnologyDevelopmentProductDevelopmentMfg/JointVentureCore Competence(CC)-A competence which delivers a sustainable competitive advantage in current markets,provides access to a wide variety of markets,and makes a significant contribution to the perceived customer benefits of the end product.Primary Capabilities(PC)-Minimum functional and technical requirements necessary to participate.COMPETENCIES MODEL-FRAMEWORKFast,affordable,fun,family dining experience Marketing and brand mgmt.Training Franchise mgmt.Product innovation BigMac recipe High quality,low price product sourcing Efficient operation Hamburger preparation Menu selectionEssentially about catching upGives unique advantageHard to copyEasy to copyCapabilitiesCore CompetenciesStrategic RequirementSC111898KR-Sydney15 1998,PricewaterhouseCoopers L.L.P.ApproachCore Competency AnalysisWhen To ApplyEmploy 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 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-prioritization 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 management Define companys business system and activities performed within each function-Based on the total range of capabilities 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 capability,or a core competence,based on the degree to which the activity provides competitive advantage and can be leveraged Note 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 attention and reflection in a systematic and structured mannerSC111898KR-Sydney16 1998,PricewaterhouseCoopers L.L.P.Citations-Client and Industry ExperienceCore Competency Analysis Galileo/Travel/Spencer Lin&Vasu Krishnamurthy Giddings&Lewis/Machine Tool/Vasu Krishnamurthy MetLife/Insurance/KIT database PwC MCS/Consulting/Vasu Krishnamurthy Save&Prosper/Banking/KIT database David A.Aaker,“Developing Business Strategies”,5th Edition Robert M.Grant,“Contemporary Strategy Analysis”,3rd Edition Michael Gould,Andrew Campbell,Marcus Alexander,“Corporate-Level Strategy:Creating Value in the Multibusiness Company”Henry Mintzberg,Bruce Ahlstrand,Joseph Lampel,“Strategy Safari:A Guided Tour Through the Wilds of Strategic Management”Henry Mintzberg,James Brian Quinn,Sumantra Ghoshal,“The Strategy Process”Henry Mintzberg,James Brian Quinn,“The Strategy Process:Concepts,Contexts,CasesSource ListSC111898KR-Sydney17 1998,PricewaterhouseCoopers L.L.P.What are the objectives of the segmentation?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 variables 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 segment customer base.Utilize the data on an ongoing basis to improve performance and continually reward the better performing customers.Customer Segmentation MethodologyHigh level work flow for a customer segmentationCustomer Segmentation Methodology SummarySC111898KR-Sydney18 1998,PricewaterhouseCoopers L.L.P.Customer Segmentation SummaryCustomer 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 Hold inventory Credit problem Basic fabrics“Opportunistic”Strategy Specialty products Narrow customer baseNiche Strategy(specialized product to narrow customer base)Sell to manufacturers before fabric purchase Established credit Broad customer base Basic fabricsLow-Cost Strategy Sell to manufacturers before fabric purchase Established credit Focused customer base Novel fabrics(“fashion forward”)Differentiation Strategy(specialized product to broad customer base)Economic Risk Inventory position Credit status Product mix Customer baseFabric Innovation Percent novelties Order size Number of collectionsHighLowHighLowCustomer SegmentationSC111898KR-Sydney19 1998,PricewaterhouseCoopers L.L.P.ApproachSTEPDATA REQUIREDSOURCE(S)1.Identify segmentation variables and segment the marketa)Survey Stage:Conduct interviews/focus groups with consumers to gain insight into motivations,attitudes,and behaviorb)Analysis Stage:Apply factor analysis to data to remove highly correlated variables;apply cluster analysis to create a number of maximally different segments2.Form segments by looking at consumer characteristics as well as consumer responsesa)Geographic Segmentationb)Demographic Segmentationc)Psychographic Segmentationd)Behavioral Segmentation Results from focus groups,interviews,and surveys Customer characteristics:demographics,statistics,etc.Focus groups,interviews,surveys Company dataWhen To ApplyApplicable 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 the most efficient manner possible.Customer SegmentationSC111898KR-Sydney20 1998,PricewaterhouseCoopers L.L.P.Citations-Client and Industry ExperienceCustomer Segmentation Galileo/Travel/Spencer Lin&Vasu Krishnamurthy General Mills/CIP/Johan Sauer Giddings&Lewis/Machine Tool/Vasu Krishnamurthy The Littlewoods Organization/Retail/KIT database PwC 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 ListSC111898KR-Sydney21 1998,PricewaterhouseCoopers L.L.P.The Experience Curve forecasts 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 SummaryThe Experience CurveEXPERIENCE CURVE FOR WIDGETS-PROJECTIONS5040302010200400600800100020004000Unit Volume(Thousands)Unit Cost($)197419751976 1977 1978197919801981 1982 19831984Slope 20%SC111898KR-Sydney22 1998,PricewaterhouseCoopers L.L.P.ApproachExperience CurveCreating 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 agencies,trade associations,and from internal company data.Step 1Plot 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 labor.)Step 2Add 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,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