BU Strategy Template Book

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

2、a particular bus sectoral context as required each 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.execu

3、tive summary ii. environmental and internal assessment a. industry dynamics and its implications b. competitive assessment c. internal assessment iii. strategic definition and implications a. strategy articulation b. strategic initiatives c. financial projection d. risks/contingencies and strategic

4、alternatives iv. exhibits 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

5、 weaknesses? how does your 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 ma

6、jor strategic initiatives? 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 summary provides a synthesis of the environmental and inter

7、nal assessments and the resultant 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.2 how is industry structure changing (demand, supply, and

8、 industry chain economics)? what are the resulting opportunities and risks? a.3 what is the expected competitor conduct? what are the resulting opportunities and risks? a.4 what are the present and future external factors that could present new opportunities and risks? a.1 what industry are you comp

9、eting in? what are the various segments in the industry? instructions: the answer to this overarching question requires a recapitulation of the sections main findings instructions: these subsections contain a 1-2 sentence summary of the relevant findings 7 iia. industry dynamics and implications bac

10、k-up 1 a.1what industry are you competing in? what are the various segments in the industry? industry definition industry segmentation definition sizing instructions: exhibit 1 could provide a useful framework for answering this question industry definition: industry segmentation: 8 iia. industry dy

11、namics and implications back-up 2 a.2how is industry structure changing with respect to demand, supply, and industry chain economics? what are the resulting opportunities and risks? economics of demand by segment substitutes, ability to differentiate volatility, cyclicality economics of supply produ

12、cer concentration and diversity import competition capacity utilization entry/exit barriers cost structure (fixed and variable) industry chain economics customer and supplier bargaining power instructions: exhibit 2,3 or 4 could provide a useful framework for answering this question 9 iia. industry

13、dynamics and implications back-up 3 a.3 what is the expected competitor conduct? what are the resulting opportunities and risks? major industry competitor moves marketing initiatives industry capacity changes m&as, divestitures vertical integration/disaggregation alliances and partnerships cost cont

14、rol and efficiency improvements instructions: exhibit 2,3 or 4 could provide a useful framework for answering this question 10 iia. industry dynamics and implications back-up 4 a.4 what are the present and future external factors that could present new opportunities and risks? impact and likelihood

15、of major industry discontinuities changes in regulation/government policy technological breakthroughs instructions: exhibit 2,3 or 4 could provide a useful framework for answering this question 11 iib. competitive assessment summary b. what are your competitive strengths and weaknesses? b.1 what are

16、 the capabilities required to succeed in this industry? b.2 how do you compare against these necessary capabilities? instructions: the answer to this overarching question requires a recapitulation of the sections main findings instructions: these subsections contain a 1-2 sentence summary of the rel

17、evant findings 12 iib. competitive assessment back-up 1 b.1 what are the capabilities required to succeed in this industry? privileged assets that create competitive advantage, e.g. physical assets, location/”space”, distribution/sales network, intangible assets (intellectual capital, network, brand

18、s, talents) distinctive skills/competencies that create competitive advantage, e.g.innovation, talent development instructions: exhibit 5 could provide a useful framework for answering this question 13 iib. competitive assessment back-up 2 b.2 how do you compare against these necessary capabilities?

19、 strengths and weaknesses of your competitive position vs. necessary capabilities benchmark performance against the industrys relevant key performance indicators (kpis)*, with margin and market share as the required minimum strengths and weaknesses of your competitive position vs. necessary capabili

20、ties: benchmark performance against the relevant industrys kpis: instructions: exhibits 6 and 7 could provide a useful framework for answering this question instructions: exhibit 8 could provide a useful framework for answering this question * kpis are a handful of levers that drive the value of the

21、 industry/business 14 iic. internal assessment summary c. how does your current business emphasis fit with the industry opportunities and the competitive landscape? c.1 which segments of the business are providing the highest returns? c.2 what have been the performance trends along major bu kpis? c.

22、3 which intangible assets* could be near-term potential sources of value? instructions: the answer to this overarching question requires a recapitulation of the sections main findings instructions: these subsections contain a 1-2 sentence summary of the relevant findings * please refer to exhibit 12

23、 for further description 15 iic. internal assessment back-up 1 c.1 which segments of the business are providing the highest returns?* relevant bu segments (based on customer, product, geography, channel) operating contribution estimates for each segment instructions: exhibit 9 could provide a useful

24、 framework for answering this question * based on latest available, 1-2 year historical financial statements 16 iic. internal assessment back-up 2 c.2 what have been performance trends along major bu kpis? kpi performance trends over the last 3-5 years, e.g. return on capital employed (roce), operat

25、ing income, margins, capital employed assessment of underlying trend drivers expected evolution instructions: exhibits 10 and 11 could provide a useful framework for answering this question roce = operating income x (1- tax rate) all interest bearing debt (short and long) + minority interest + stock

26、holders equity 17 iic. internal assessment back-up 3 c.3 which intangible assets could be near- term potential sources of value? identification of in-house intellectual property, talent, networks, brand/image conversion into sources of value instructions: exhibit 12 could provide a useful framework

27、for answering 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.1 where to compete? a.2 what is your customer value proposition for the different segments you are going to serve? a.3 what i

28、s your business model? instructions: the answer to this overarching question requires a recapitulation of the sections main findings a.4 how does your chosen strategy exploit industry opportunities and address industry/competitive threats? instructions: these subsections contain a 1-2 sentence summa

29、ry of the relevant findings 20 iiia. strategy articulation back-up 1 a.1 where to compete? where are you going to compete along these dimensions and why: target market distribution channels product (breadth and depth) geographic scope instructions: exhibit 13 could provide a useful framework for ans

30、wering this question 21 iiia. strategy articulation back-up 2 a.2 what is your customer value proposition for the different segments you are going to serve? target customer definition benefits that you will offer the customers product pricing position against competition vis-vis the benefits provide

31、d 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 benefits you provide? 22 iiia. strategy articulation back-up

32、3 a.3 what 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? which of your bus existing strengths can be leveraged? w

33、hat skills/capabilities do you need to build? instructions: exhibit 15 could provide a useful framework for answering this question 23 iiia. strategy articulation back-up 4 a.4 how does your chosen strategy exploit the industry opportunities and address the industry/competitive threats? industry att

34、ractiveness and implication review alignment of strategy and environmental realities instructions: a review of the section on industry dynamics and implications, together with the frameworks used (exhibit 2,3 or 4) is useful for answering this question 24 iiib. strategic initiatives summary b. what

35、will be the impact of major strategic initiatives? b3. how much value will be created from each strategic initiative? b4. what resources will each strategic initiative require? instructions: the answer to this overarching question requires a recapitulation of the sections main findings b1. what majo

36、r strategic initiatives are required to successfully implement your selected business model? b2. what are the sources of value created from each strategic initiative? instructions: these subsections contain a 1-2 sentence summary of the relevant findings 25 iiib. strategic initiatives back-up 1 b.1

37、what major strategic initiatives are required to successfully imple- ment your selected business model? possible strategic initiatives list 26 iiib. strategic initiatives back-up 2 b.2 what are the sources of value created from each strategic initiative? sources of value from each strategic initiati

38、ve (e.g., ebit, capital employed) category of initiatives volume increase ebit impact via price increase cost reduction other invest- ment capital employed impact via divest- ment capital efficiency* other * e.g. improved working capital employment, increased asset utilization, changes to asset owne

39、rship specific actionable initiatives 27 iiib. strategic initiatives back-up 3 operating income ongoing impact 2001-2004 php millions capital employed ongoing impact 2001-2004 php billions present operating income volume increase price increase cost reduction benefit additional costs total ongoing o

40、perating income present capital employed improved capital efficiency divestmentsinvestments (capex and acquisitions) total ongoing capital employed b.3 how much value will be created from each strategic initiative? one-time ebit impact = one-time costs = financial impact from each strategic initiati

41、ve expected financial outlay for each initiative + += += 28 iiib. strategic initiatives back-up 4 b.4 what resources will each strategic initiative require? resources required to make strategy work availability of resources in the organization plan for filling resource gaps categories of initiatives

42、 specific actionable initiatives people/skills resource requirements fundingex-com involvement 29 iiic. financial projections summary c. what are the expected financial returns of your strategy? c.3 what is your expected cash generation ability over the medium term? c.4 what is your expected capital

43、 productivity? c.2 what is your projected net income in the next few years? c.1 what are the key assumptions? instructions: the answer to this overarching question requires a recapitulation of the sections main findings instructions: these subsections contain a 1-2 sentence summary of the relevant f

44、indings 30 iiic. financial projections back-up 1 c.1 what are the key assumptions? profit and loss (e.g. revenues, costs, margin) balance sheet corporate center directives corporate center assumptions base case business unit assumptions revenues market size market share price costs input costs produ

45、ction costs other costs (e.g. sg&a) margins gross margin operating margin capital planned investments/ divestments changes in working capital 2002 key forecast assumptions 20032004growth rate corporate center assumptions 200220032004 key economic indicators gdp growth consumer price index exchange r

46、ate (php/usd) 91-day t-bill rate corporate tax rate instructions: these are the minimum required assumptions. feel free to add other assumptions relevant to your bu 31 iiic. financial projections back-up 2 c.2 what is your projected net income in the next few years? income statement forecast base ca

47、se historical sales cost of goods sold gross profit operating expenses operating profit other expenses taxes net profit 1999 forecasted income statement 2000 in php million forecast 2001*200220032004 cagr 1999-2004 growth analysis sales (%) gross profit (%) operating profit (%) net profit (%) margin

48、 analysis gross margin (%) operating margin (%) net margin (%) * * key assumptions not listed earlier should be detailed at the bottom of the chart. the impact of planned initiatives on the revenues and costs should be established clearly with additional attachments if required best estimates on pos

49、sible actual results instructions: these are the minimum required income statement accounts and analyses. feel free to add other accounts and analyses relevant to your bu 32 iiic. financial projections back-up 3 c.3 what is your expected cash generation ability over the medium term? cash flow foreca

50、st instructions: these are the minimum required cash flow statement accounts. feel free to add other accounts relevant to your bu base case operating profit depreciation and amortization other non-cash operating expenses net operating cash flow increase/(decrease) in working capital other operating

51、cash flow total operating cash flow forecasted cash flow statement historical 19992000 forecast 2001* 200220032004 cagr 1999-2004 capital expenditure other investing cash flow items total investing cash flow increase/(decrease) in debt dividends other financing cash flow total financing cash flow in

52、 php million key assumptions not listed earlier should be detailed at the bottom of the chart. the impact of planned initiatives on the fixed and working capital investments should be established clearly with additional attachments if required best estimates on possible actual results * * 33 iiic. f

53、inancial projections back-up 4 c.4 what is your expected capital productivity? balance sheet forecast roce 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 she

54、et accounts and analyses. feel free to add other accounts and analyses relevant to your bu base case cash accounts receivables inventories other current assets total current assets net fixed assets other assets total assets forecasted balance sheet historical 19992000 forecast 2001*200220032004 cagr

55、 1999-2004 accounts payable other current liabilities total current liabilities short-term loans long-term loans other liabilities total liabilities minority interest total stockholders equity in php million capital employed roce total liab. & stockholders equity ratio analysis working capital turno

56、ver debt-equity ratio best estimates on possible actual results * 34 iiid. risks/contingencies & strategic alternatives summary d. what strategic alternatives have you considered? d.1 what are the associated risks to your chosen strategy? d.2 re-examining industry opportunities and industry/competit

57、ive threats, what alternatives exist to your chosen strategy? instructions: the answer to this overarching question requires a recapitulation of the sections main findings d.3 beyond the 3-year time frame, what breakthrough strategic options may be possible? instructions: these subsections contain a

58、 1-2 sentence summary of the relevant findings 35 iiid. risks/contingencies & strategic alternatives back-up 1 d.1 what are the associated risks to your chosen strategy? identification of significant potential risks and plans to mitigate sensitivity/scenario financial analysis potential risks busine

59、ss risk regulatory risk technology risk integrity risk macroeconomic risk impactlikelihoodcontingency other 36 iiid. risks/contingencies & strategic alternatives back-up 2 d.2 re-examining industry opportunities and industry/competitive threats, what alternatives exist to your chosen strategy? where

60、 to compete? value proposition business model alignment with external realities where to compete?: alternative value proposition: alternative business model: alignment with external realities: instructions: based on a review of the section on environmental and internal assessment, strategy articulat