Business Unit Strategy Training - Gazhoo

Business Unit Strategy TrainingReference guideVersion 1.22Company XY BUSINESS UNIT STRATEGY TRAINING This material is proprietary and is intended for the sole use of Company XY internal training.Any duplication,distribution,or other use without the expressed written authorization of Company XY,Inc.is strictly prohibited.3Company XY BUSINESS UNIT STRATEGY TRAININGPagePreface:About the business unit strategy training programIntroduction to Company XY s perspective on business unit strategy Module 1:Identification of the key issues of the engagementModule 2:Structure and dynamics of the industryModule 3:Characteristics and dynamics of the individual companiesModule 4:Execution capacity of the clientModule 5:Definition and evaluation of strategic alternativesModule 6:Implementable recommendationsProgram referencesTable of contents 38141631444859614Company XY BUSINESS UNIT STRATEGY TRAININGBackground and objectives of the programStrengthen Company XYs overall strategy consulting delivery capabilitiesRaise Company XY consultants strategy skills to a higher levelTeach Company XY consultants techniques likely to be applied in many future strategy engagementsTeach Company XYs unique and execution-oriented perspective on strategy Establish a common vocabulary and point-of-departure for all Company XY strategy engagementsCompany objectivesAdd to portfolio of consulting skillsOffer broader career possibilities within Company XYSatisfy intellectual curiosityBroaden ones perspective towards consulting engagementsIndividual objectivesThe program was conceived and developed by the Global Strategy Initiative(GSI),an initiative begun in 2010 to raise Company XYs strategy capability.This program is one of several deliverables resulting from the GSIThe program materials were developed by a team of Company XY consultants from around the world over the course of 9 monthsThe course materials were created using a“bottom-up”approach,in which a large number of sources,both academic and internal,were first gathered and then 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 Company XY consultants5Company XY BUSINESS UNIT STRATEGY TRAININGStructure of the training program8-99-1010-1111-1212-11-2TimingMonday2-33-44-56-78-99-1010-?7-8TuesdayWednesdayThursdayFridayIntroductionModule IILunchFinal presentationConclusionModule III5-6Case presentationCase preparationCase preparationDinnerDinnerModule VCase preparationLunchModule ILunchLunchDinnerCase preparationCase presentationCase presentationGuest SpeakerStrategy literature reviewModule VILunchModule IVGuest SpeakerThe programs modular design is accounted for in the schedule.The training course includes instruction,exercises,presentations,a literature review,and a case study to supplement the written program materialsThe case study,which requires participants to employ the techniques taught in the program,is introduced Monday afternoon,and runs the entire program,culminating in the presentation of a business unit strategy on Friday morningMonday through Thursday,coursework concludes at dinner time,8:00 p.m.On Thursday,participants will require extra time in the to evening prepare for the case which is to be presented the following dayParticipants will be required to use some free time in the evening of Monday-Wednesday,reading and preparing a brief presentation about selected literature about strategyDinner6Company XY BUSINESS UNIT STRATEGY TRAININGFrequently asked questionsQ:Why is business unit strategy an important service offering for Company XY?A:In Company XYs ever increasing focus on key accounts,our ability to assist CEOs in the overall strategic management and development of entire business units will be key in building our client relationships.It is also a key element in building Company XYs end-to-end service capability,allowing the company to offer premier consulting service across every level of the client organization,from strategy to operations,to organization and IT.Q:What is the difference between business unit strategy and other types of strategy?A:Business unit strategy focuses primarily on the“where and how to compete”of individual business units.This differs from(i)the higher level corporate strategy that primarily focuses on how to allocate resources between different activities/business units and(ii)the lower level functional strategies,e.g.,in finance or marketing,that focuses on how to meet specific goals within certain functions of the business unit.Q:What does a typical strategy project look like?A:There is no typical strategy project.What primarily distinguishes strategy projects from other types of projects is the issue-driven approach where thorough up-front analysis and evaluation of the key issues that face the client guides the entire problem solving approach and flight planning for the project.Q:What is the focus of the training program?A:The purpose of the training program is to teach participants the ability to apply analytical techniques in specific client situations.Hence,the focus of the program is those analytical techniques that will most likely be applied in 80%of our business unit strategy projects.Overall strategy frameworks or approaches are not the focus of the program as they are likely to vary from client to client,and from project to project.Q:How can I get on the training program?A:Talk to your mentor,your local staffing coordinator,and/or your local training coordinator.These people will be able to help you assess whether you should sign up for participation and when the next open slots are available in your region.Q:Who in Company XY know a lot about strategy?A:A good place to meet strategists throughout the firm is via the strategy affinity groups.These groups are composed of experienced strategists as well as consultants with some experience who are very interested in strategy work.7Company XY BUSINESS UNIT STRATEGY TRAININGGeneral comments about the training program and this reference guidePurpose of the reference guideThe purpose of this reference guide is twofold:Firstly,the guide can serve as a quick reference for consultants who have already participated in the Business Unit Strategy Training Program and who want to apply one or more of the techniques in a client situation.And secondly,the guide can help potential future participants gain a quick overview of the contents of the training program,and thereby better understand whether this program is right for him/her at that point in time.How to use this reference guide and the training program materialsThis pocket guide as well as the materials from the training program are intended to provide consultants with a basic understanding of the selected techniques.They are by no means complete in terms of the quantity of material covered.Many of the techniques require further study and extensive experience to execute properly.The hope is that this training program will:provide users with a common a point-of-departure,stimulate thought about the analyses and their application,provide ideas for presentation formats,and serve as a place to seek further references.Online accessYou can access this reference guide as well as the entire training program online via Globalink.Simply go to the Practices section and enter the Global Strategy Practice.You will be guided from there.CommentsWe are eager to receive your comments,either about this guide or to the training program as such.Please direct your comments to Professional Development.8Company XY BUSINESS UNIT STRATEGY TRAININGPagePreface:About A.T Kearneys business unit strategy training program Introduction to Company XY s perspective on business unit strategyModule 1:Identification of the key issues of the engagementModule 2:Structure and dynamics of the industryModule 3:Characteristics and dynamics of the individual companiesModule 4:Execution capacity of the clientModule 5:Definition and evaluation of strategic alternativesModule 6:Implementable recommendationsProgram referencesTable of contents 38141631444859619Company XY BUSINESS UNIT STRATEGY TRAININGAreas of strategic and organizational consultingThe program focuses on strategy at the business unit level.This addresses the where,and how to compete of a business unit.The“when”to compete is another aspect of business unit strategy that is concerned with the timing of strategic activities,and this is touched upon in module 4,5,and 6.Other types of strategy include corporate strategy and functional strategy.Corporate strategy mainly addresses issues of resource allocation between business units while functional strategy is concerned with the details of specific operational activities and goals within a business unit IndustryCorporateBusiness unitCorporate strategy defines the scope of the company in terms of the industries and markets in which its various business units competeStrategies for industry restructuringBusiness unit strategy defines how the company competes within a particular industry or market“How to compete”“Where to compete”Business unitR&DPersonnelFinanceProductionSales and marketingFunctional strategy defines the detailed deployment of resources at the operational levelCorporate strategy and financeM&A&DDesign of the corporation and corporate centerResource allocationMarket and competitive strategies10Company XY BUSINESS UNIT STRATEGY TRAININGDefining business unit strategy and its main elementsIterative processProduct/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”Capability?Competitor reaction?Action?Critical path?At what time and in which sequence should a strategy be executed?ServiceS&MManuf.DesignR&DA strategically and functionally distinct execution-oriented entity that is usually a subset of a corporationA unit that has a:Well-defined market(or market segments)Well-defined group of competitorsWell-defined business system that serves the marketA unit grouped as such to optimize the collective organizational capabilities among its constituent entitiesDefinition of an SBUIt 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 unitsIt has its own competitors,which it is trying to surpassIt has a manager who is responsible for strategic planning,profit,and performanceSome traditional characteristics11Company XY BUSINESS UNIT STRATEGY TRAININGCompany XYs definition of business unit strategyA Business Unit Strategy is about.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 clients business customer oriented?Does the customer perceive sufficient value?Is the clients 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-termAn integrated set of actions Means that the components parts of a strategy must complement one another,and must be executed at the proper time-a reference to the“when to compete”To design the entire value system Refers to the industry supply chain,the company value chain,and the competitive structure therein with respect to the defined where to compete-a reference to the“where and how to compete”To continuously create and redefine competitive actions Means that true competitive advantage must be lastingThrough superior customer value Implies that the definition of competitive advantage over a competitor is providing superior value to the customer relative to the cost requiredan integrated set of actions.12Company XY BUSINESS UNIT STRATEGY TRAININGThe rationale behind the modular structure of the program The point-of-departure for the program is that there is not one single approach to strategy,rather each strategy engagement requires a different approach and perspective that is issue driven.Thus,the program is designed to teach techniques consultants will find most useful in strategy engagements Strategy assignments are issue-driven,hypothetical in nature,and have unique requirements for success,hence module 1 is taught first,as it is always the first step in an engagementThe analysis phase of a strategy engagement involves two levels:the industry and the individual company.Module 2 and 3 cover these two levels,respectively.We emphasize that there is no correct sequence in carrying out these analyses in an actual engagementIn Module 4 we teach the distinguishing characteristics of Company XYs strategic approach.It involves concurrently relating the fundamental analyses learned in Modules 2-3 to the execution capacity of the clientThe next phase of the a business unit strategy engagement requires the synthesis of the findings into strategic options for the client.This is the subject of Module 5The final step in the engagement is the implementation process.Module 6 presents a technique for creating implementation plans Module II Structure and dynamics of the industryModule III Characteristics and dynamics of the individual companiesModule IV Execution capacity of the clientModule VI Implementable recommendationsModule V Definition and evaluation of strategic alternativesRoll-outAction 1Action 2Action 3Action 4Action 5Qtr 1 Qtr 2 Qtr 3 Qtr 4Module I Identification of the key issues of the engagement13Company XY BUSINESS UNIT STRATEGY TRAININGA key objective of the training program is to distinguish Company XYs unique strategy methodology by focusing on execution capacity1.The consideration of the execution capacity of the organization in every step of the strategy process2.The iterations between the execution capacity along every step of the strategy process allowing degrees of freedom(execution case)for highly rewarding strategies to be increased3.The commitment to aiding the client in execution of the elected strategyThe three distinguishing characteristics of the Company XY strategy methodologySituation assessmentOption generationand evaluationImplementationAssessment of degrees of freedom to executeOptions for improving execution capacityImplementationStrategyAnalysisExecution-focusedAnalysisIntegratedevaluationand planningConcurrentprocessesPowerfulContributionsIterationsIterations14Company XY BUSINESS UNIT STRATEGY TRAININGProgram organization and listing of analytic techniquesThe program is organized into modules,deliverables,and techniques.Each module is composed of one or more deliverables,and each deliverable is composed of one or more techniques.The rationale behind the modular structure has already been discussedA deliverable is a collection of techniques that together answer an issue or sub-issue A technique is a specific analysis performed to test hypotheses It is important to keep in mind that not all the techniques will be employed in every engagement.Furthermore,there will be no ideal,set sequence to their usage.Rather,the issues that drive the engagement will determine which techniques are required,and at which times.The program,in this way,is to serve as a toolkit that can be accessed as required,not as a recipe book for strategy engagementsMany of these techniques will be relevant and useful to other types of Company XY engagementsKey issues of the engagementIndustry structure Development of the industryProduct/market analysisDemand and supply economicsIndustry analysis frameworksOverall company profileProduct/market focusOverview of the value chainFinancial resources and performanceCompany analysis frameworksAssessment of execution capacityDecision-makingLong-term scenariosGeneric strategy frameworksImplementable recommendationsIssue analysisPlayers analysisStrategic group analysisSubstitution analysisSupply chain analysisExit and entry barrier assessmentIndustry strategic era analysisLife cycle analysisTrends analysisSize and growth of the marketProduct/market segmentationDemand and supply economicsStructure-Conduct-PerformanceThe Five ForcesThe Strategic TrianglePurpose of the organizationStakeholder analysisStrategic era analysisStrategic planning frameworkEvaluation of product/market segmentsValue chain analysisCost and margin driver analysisDevelopment over timeFinancial ratios7SBenchmarkingSWOTOperational capacity assessmentOrganizational capacity assessment Information technology capacity assessmentDecision treeGame theoryScenario planningEnd gameThree generic strategiesGaining strategic advantageThe growth matrixImplementation plans ModuleDeliverableTechniqueI.Identification of the key issues of the engagementII.Structure and dynamics of the industryIII.Characteristics and dynamics of the individual companiesIV.Execution capacity of the clientV.Definition and evaluation of strategic alternativesVI.Implementable recommendationsPage151718192021222324252627282930323334353637383940414243454647495051525354-57586015Company XY BUSINESS UNIT STRATEGY TRAININGPagePreface:About A.T Kearneys business unit strategy training Introduction to Company XY s perspective on business unit strategyModule 1:Identification of the key issues of the engagementModule 2:Structure and dynamics of the industryModule 3:Characteristics and dynamics of the individual companiesModule 4:Execution capacity of the clientModule 5:Definition and evaluation of strategic alternativesModule 6:Implementable recommendationsProgram referencesTable of contentsIdentifying the key issues of the engagementIssue analysis 381416314448596116Company XY BUSINESS UNIT STRATEGY TRAININGIssue analysisDefining the key issues of the engagement via issue analysis is the first step in the consulting processA disciplined technique of translating a client brief into a set of logically related questions that required clear answers.It is an iterative process that runs through the entire engagementIssue analysis entails defining the situation,complication,and overriding question of a client case,and from that identifying issues to be addressed,formulating hypotheses for those issues and deriving a project plan 1.SITUATIONAL ANALYSIS.Study client and industry.Seek consensus with client about understanding of situation.Define complication using components of the situation,and then define the overriding question2.BRAINSTORM AND ISSUE BREAKDOWN.Brainstorm to uncover all possible questions and issues.From this identify issues and sub-issues.Make certain that answers to issues would solve the overriding question3.HYPOTHESIS GENERATION.Provide testable explanations that answer each issue and sub-issue,using“best-educated guess”(best-informed decision)4.FORMULATE PROJECT PLAN.Determine analyses required to test hypotheses.Then,delegate responsibilities,and establish timing A dynamic/iterative technique which should be applied during the entire consulting processBrainstorming is a key step in the issue breakdownShould be the first step in every BU strategy engagementFundamental in managing an engagement:Managing a team Managing upwards Managing the clientUseful in many aspects of the engagement:To define key issues in the proposal process To structure tasks and control quality To clarify the focus of project work and to define team member roles and focus accordingly To prioritize client problems/challenges/uncertaintiesMust to be worded and presented carefully when achieving consensus with the clientClient request for proposal(RFP)Annual reportsClient interviewsKey notesWeaknessesStrengthsSubissuesHypothesesAnalysesSourceResponsibilityIssuesTimingIs it an attractive segment?No!Projected new plants will