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1、CONFIDENTIAL,BU Strategic Plan Template Book,1,STRATEGY PLANNING INSTRUCTIONS,The objective of these templates is to provide completeness and consistency of BU strategic plan submissions.These templates are not intended to replace or constrain BU strategic thinking and should be adapted to reflect a
2、 particular BUs sectoral context as requiredEach section begins with a summary that is based on a synthesis of questions and analyses that follow.The suggested approach would be to first complete the relevant back-up analyses and then work towards the overall synthesis,2,TABLE OF CONTENTS,I.Executiv
3、e summaryII.Environmental and internal assessmentA.Industry dynamics and its implicationsB.Competitive assessmentC.Internal assessmentIII.Strategic definition and implicationsA.Strategy articulationB.Strategic initiativesC.Financial projectionD.Risks/contingencies and strategic alternativesIV.Exhibi
4、ts,3,BU STRATEGIC PLAN DEVELOPMENT,Industry dynamics and implications,Environmental and internal assessment,Competitive assessment,Internal assessment,What are the major changes in industry dynamics and resulting opportunities and risks?,What are your competitive strengths and weaknesses?,How does y
5、our current business emphasis fit with industry opportunity and competitive landscape?,Strategy articulation,Strategic definition and implications,Strategic initiatives,Financial projections,What strategy will your BU pursue over the next 3 years?,What will be the impact of major strategic initiativ
6、es?,What are the expected financial returns of your strategy?,+,+,+,+,Risk/contingen-cies&strategic alternatives,What strategic alternatives have you considered?,+,4,I.EXECUTIVE SUMMARY,Instructions:The Executive Summaryprovides a synthesis of theEnvironmental and InternalAssessments and theresultan
7、t BU Strategic Plans,5,II.ENVIRONMENTAL AND INTERNAL ASSESSMENT,6,IIA.INDUSTRY DYNAMICS AND IMPLICATIONS SUMMARY,A.What are the major changes in industry dynamics and the resulting opportunities and risks?,A.2How is industry structure changing(demand,supply,and industry chain economics)?What are the
8、 resulting opportunities and risks?,A.3What is the expected competitor conduct?What are the resulting opportunities and risks?,A.4What are the present and future external factors that could present new opportunities and risks?,A.1What industry are you competing in?What are the various segments in th
9、e industry?,Instructions:The answer to thisoverarching questionrequires a recapitulationof the sections mainfindings,Instructions:These subsectionscontain a 1-2 sentencesummary of the relevantfindings,7,IIA.INDUSTRY DYNAMICS AND IMPLICATIONS BACK-UP 1,A.1What industry are you competing in?What are t
10、he various segments in the industry?,Industry definitionIndustry segmentationDefinitionSizing,Instructions:Exhibit 1 could providea useful framework foranswering this question,Industry definition:,Industry segmentation:,8,IIA.INDUSTRY DYNAMICS AND IMPLICATIONS BACK-UP 2,A.2How is industry structure
11、changing with respect to demand,supply,and industry chain economics?What are the resulting opportunities and risks?,Economics of demandBy segmentSubstitutes,ability to differentiateVolatility,cyclicalityEconomics of supplyProducer concentration and diversityImport competitionCapacity utilizationEntr
12、y/exit barriersCost structure(fixed and variable)Industry chain economicsCustomer and supplier bargaining power,Instructions:Exhibit 2,3 or 4 could providea useful framework foranswering this question,9,IIA.INDUSTRY DYNAMICS AND IMPLICATIONS BACK-UP 3,A.3What is the expected competitor conduct?What
13、are the resulting opportunities and risks?,Major industry competitor movesMarketing initiativesIndustry capacity changesM&As,divestituresVertical integration/disaggregationAlliances and partnershipsCost control and efficiency improvements,Instructions:Exhibit 2,3 or 4 could providea useful framework
14、 foranswering this question,10,IIA.INDUSTRY DYNAMICS AND IMPLICATIONS BACK-UP 4,A.4What are the present and future external factors that could present new opportunities and risks?,Impact and likelihood of major industry discontinuitiesChanges in regulation/government policyTechnological breakthrough
15、s,Instructions:Exhibit 2,3 or 4 could providea useful framework foranswering this question,11,IIB.COMPETITIVE ASSESSMENT SUMMARY,B.What are your competitive strengths and weaknesses?,B.1What are the capabilities required to succeed in this industry?,B.2How do you compare against these necessary capa
16、bilities?,Instructions:The answer to thisoverarching questionrequires a recapitulationof the sections mainfindings,Instructions:These subsectionscontain a 1-2 sentencesummary of the relevantfindings,12,IIB.COMPETITIVE ASSESSMENT BACK-UP 1,B.1What are the capabilities required to succeed in this indu
17、stry?,Privileged assets that create competitive advantage,e.g.physical assets,location/”space”,distribution/sales network,intangible assets(intellectual capital,network,brands,talents)Distinctive skills/competencies that create competitive advantage,e.g.innovation,talent development,Instructions:Exh
18、ibit 5 could providea useful framework foranswering this question,13,IIB.COMPETITIVE ASSESSMENT BACK-UP 2,B.2How do you compare against these necessary capabilities?,Strengths and weaknesses of your competitive position vs.necessary capabilitiesBenchmark performance against the industrys relevant ke
19、y performance indicators(KPIs)*,with margin and market share as the required minimum,Strengths and weaknesses of your competitive position vs.necessary capabilities:,Benchmark performance against the relevant industrys KPIs:,Instructions:Exhibits 6 and 7 couldprovide a useful frameworkfor answering
20、this question,Instructions:Exhibit 8 could providea useful framework foranswering this question,*KPIs are a handful of levers that drive the value of the industry/business,14,IIC.INTERNAL ASSESSMENT SUMMARY,C.How does your current business emphasis fit with the industry opportunities and the competi
21、tive landscape?,C.1Which segments of the business are providing the highest returns?,C.2What have been the performance trends along major BU KPIs?,C.3Which intangible assets*could be near-term potential sources of value?,Instructions:The answer to thisoverarching questionrequires a recapitulationof
22、the sections mainfindings,Instructions:These subsectionscontain a 1-2 sentencesummary of the relevantfindings,*Please refer to Exhibit 12 for further description,15,IIC.INTERNAL ASSESSMENT BACK-UP 1,C.1Which segments of the business are providing the highest returns?*,Relevant BU segments(based on c
23、ustomer,product,geography,channel)Operating contribution estimates for each segment,Instructions:Exhibit 9 could providea useful framework foranswering this question,*Based on latest available,1-2 year historical financial statements,16,IIC.INTERNAL ASSESSMENT BACK-UP 2,C.2What have been performance
24、 trends along major BU KPIs?,KPI performance trends over the last 3-5 years,e.g.return on capital employed(ROCE),operating income,margins,capital employedAssessment of underlying trend driversExpected evolution,Instructions:Exhibits 10 and 11 couldprovide a useful frameworkfor answering this questio
25、n,ROCE=Operating income x(1-tax rate)All interest bearing debt(short and long)+minority interest+stockholders equity,17,IIC.INTERNAL ASSESSMENT BACK-UP 3,C.3Which intangible assets could be near-term potential sources of value?,Identification of in-house intellectual property,talent,networks,brand/i
26、mageConversion into sources of value,Instructions:Exhibit 12 could providea useful framework foranswering this question,18,III.STRATEGIC DEFINITION AND IMPLICATIONS,19,IIIA.STRATEGY ARTICULATION SUMMARY,A.What strategy will your BU pursue over the next 3 years?,A.1Where to compete?,A.2What is your c
27、ustomer value proposition for the different segments you are going to serve?,A.3What is your business model?,Instructions:The answer to thisoverarching questionrequires a recapitulationof the sections mainfindings,A.4How does your chosen strategy exploit industry opportunities and address industry/c
28、ompetitive threats?,Instructions:These subsectionscontain a 1-2 sentencesummary of the relevantfindings,20,IIIA.STRATEGY ARTICULATION BACK-UP 1,A.1Where to compete?,Where are you going to compete along these dimensions and why:Target marketDistribution channelsProduct(breadth and depth)Geographic sc
29、ope,Instructions:Exhibit 13 could providea useful framework foranswering this question,21,IIIA.STRATEGY ARTICULATION BACK-UP 2,A.2What is your customer value proposition for the different segments you are going to serve?,Target customer definitionBenefits that you will offer the customersProduct pri
30、cingPosition against competition vis-vis the benefits provided and the price charged,Who is your target customer?What are the explicit benefits you provide to your customers?What perceived value do you provide to the customer better than competition?How much value do your customers attach to the ben
31、efits you provide?,22,IIIA.STRATEGY ARTICULATION BACK-UP 3,A.3What is your business model?,Delivery and communication of customer value proposition(value delivery system)Competitive advantage in delivering these benefits to the customer,How will the value proposition be provided and communicated?Whi
32、ch of your BUs existing strengths can be leveraged?What skills/capabilities do you need to build?,Instructions:Exhibit 15 could providea useful framework foranswering this question,23,IIIA.STRATEGY ARTICULATION BACK-UP 4,A.4How does your chosen strategy exploit the industry opportunities and address
33、 the industry/competitive threats?,Industry attractiveness and implication reviewAlignment of strategy and environmental realities,24,IIIB.STRATEGIC INITIATIVES SUMMARY,B.What will be the impact of major strategic initiatives?,B3.How much value will be created from each strategic initiative?,B4.What
34、 resources willeach strategic initiativerequire?,Instructions:The answer to thisoverarching questionrequires a recapitulationof the sections mainfindings,B1.What major strategic initiatives are required to successfully implement your selected business model?,B2.What are the sources of value created
35、from each strategic initiative?,Instructions:These subsectionscontain a 1-2 sentencesummary of the relevantfindings,25,IIIB.STRATEGIC INITIATIVES BACK-UP 1,B.1What major strategic initiatives are required to successfully imple-ment your selected business model?,Possible strategic initiatives list,26
36、,IIIB.STRATEGIC INITIATIVES BACK-UP 2,B.2What are the sources of value created from each strategic initiative?,Sources of value from each strategic initiative(e.g.,EBIT,capital employed),Category of initiatives,Volume increase,EBIT impact via,Price increase,Cost reduction,Other,Invest-ment,Capital e
37、mployed impact via,Divest-ment,Capitalefficiency*,Other,*E.g.improved working capital employment,increased asset utilization,changes to asset ownership,Specific actionable initiatives,27,IIIB.STRATEGIC INITIATIVES BACK-UP 3,B.3How much value will be created from each strategic initiative?,one-time E
38、BIT impact=one-time costs=,Financial impact from each strategic initiativeExpected financial outlay for each initiative,+,+,+,=,+,=,28,IIIB.STRATEGIC INITIATIVES BACK-UP 4,B.4What resources will each strategic initiative require?,Resources required to make strategy workAvailability of resources in t
39、he organizationPlan for filling resource gaps,Categories of initiatives,Specific actionable initiatives,People/skills,Resource requirements,Funding,Ex-Com involvement,29,IIIC.FINANCIAL PROJECTIONS SUMMARY,C.What are the expected financial returns of your strategy?,C.3What is your expected cash gener
40、ation ability over the medium term?,C.4What is your expected capital productivity?,C.2What is your projected net income in the next few years?,C.1What are the key assumptions?,Instructions:The answer to thisoverarching questionrequires a recapitulationof the sections mainfindings,Instructions:These
41、subsectionscontain a 1-2 sentencesummary of the relevantfindings,30,IIIC.FINANCIAL PROJECTIONS BACK-UP 1,C.1What are the key assumptions?,Profit and loss(e.g.revenues,costs,margin)Balance sheetCorporate center directivesCorporate center assumptions,Instructions:These are the minimumrequired assumpti
42、ons.Feel free to add otherassumptions relevant to your BU,31,IIIC.FINANCIAL PROJECTIONS BACK-UP 2,C.2What is your projected net income in the next few years?,Income statement forecast,Instructions:These are the minimum required income statement accounts and analyses.Feel free to add other accounts a
43、nd analyses relevant to your BU,32,IIIC.FINANCIAL PROJECTIONS BACK-UP 3,C.3What is your expected cash generation ability over the medium term?,Cash flow forecast,Instructions:These are the minimum required cash flow statementaccounts.Feel free to add other accounts relevant to your BU,33,IIIC.FINANC
44、IAL PROJECTIONS BACK-UP 4,C.4What is your expected capital productivity?,Balance sheet forecastROCE computation,ROCE=Operating income x(1-tax rate)All interest bearing debt(short and long)+minority interest+stockholders equity,Instructions:These are the minimum required balance sheet accounts and an
45、alyses.Feel free to add other accounts and analyses relevant to your BU,34,IIID.RISKS/CONTINGENCIES&STRATEGIC ALTERNATIVES SUMMARY,D.What strategic alternatives have you considered?,D.1What are the associated risks to your chosen strategy?,D.2Re-examining industry opportunities and industry/competit
46、ive threats,what alternatives exist to your chosen strategy?,Instructions:The answer to thisoverarching questionrequires a recapitulationof the sections mainfindings,D.3Beyond the 3-year time frame,what breakthrough strategic options may be possible?,Instructions:These subsectionscontain a 1-2 sente
47、ncesummary of the relevantfindings,35,IIID.RISKS/CONTINGENCIES&STRATEGIC ALTERNATIVES BACK-UP 1,D.1What are the associated risks to your chosen strategy?,Identification of significant potential risks and plans to mitigateSensitivity/scenario financial analysis,Potential risks,Business risk,Regulator
48、y risk,Technology risk,Integrity risk,Macroeconomic risk,Impact,Likelihood,Contingency,Other,36,IIID.RISKS/CONTINGENCIES&STRATEGIC ALTERNATIVES BACK-UP 2,D.2Re-examining industry opportunities and industry/competitive threats,what alternatives exist to your chosen strategy?,Where to compete?Value pr
49、opositionBusiness modelAlignment with external realities,Where to compete?:Alternative value proposition:Alternative business model:Alignment with external realities:,37,IIID.RISKS/CONTINGENCIES&STRATEGIC ALTERNATIVES BACK-UP 3,D.3Beyond the 3-year time frame,what breakthrough strategic options may
50、be possible?,“Out-of-the-box”ideas,Instructions:Think radical!Think out-of-the-box!,38,IV.EXHIBITS,39,SEGMENT ANALYSIS,Exhibit 1,ILLUSTRATIVE,Industryboundaries,Segments,Industry segments,Relatively distinct sub-groupings within the industryMarket is relatively similar within the segment but differe
