Craft a strategy

CONSULTING METHODOLOGIES

Every business unit needs a strategy, laying out an action plan for how they will be creating competitive advantage in the future.

These questions will ensure that you craft your strategy with a  360 degree perspective:

I Executive Summary

[Summarise the key components of the strategy]

  • Our diagnosis – what is the nature of our challenge
  • Our strategy – how we are going to overcome the challenge
  • The key actions (initiatives) we are going to take to implement our strategy

II What is our current strategic situation?

  • How does our industry work? [Tool: See Industry Analysis]
    • What is the structure of our industry?
    • How do you make money in our industry?
    • How is our industry changing?
    • How are industry boundaries breaking down?
  • How are customers changing?
    • How are segments changing?
    • What is the new basis of competition in each segment?
  • How do we compare to our competitors? [Tool: See Competitive Analysis]
    • Who are our competitors?
    • What are their strategies?
    • How can we respond to their strategies and tactics?
  • How are we positioned in our Product/Markets? [Tool: Portfolio framework, e.g. BCG Matrix]
  • What is our financial performance?
    • Where do we currently make money?(products, countries and customer segments)?
    • What are the financial trends? What part of our business are increasing/decreasing in profitability? Why?
    • Where are we currently allocating our resources? How does this compare with profitability? What return on investment have we seen over the last 3 years?
    • How do our costs compare with competitors? [Tool – competitive cost benchmarking]
  • What have we learnt over the last 12 months?
    • What have we learnt about our customers? How are we taking these insights into action?
    • What exceeded our expectations? Why?
    • What fell short of our expectations? Why?
    • What new assumptions have we tested? What were the results?
    • What were the results of our pilots/new ventures?
    • How have we performed against our strategic KPIs?
  • Summary
    • What are the key trends? What do we expect to be the future business environment?
    • What different growth opportunities do we have?
    • What are our top 5 strategic issues?

III What is our strategy?

  • Where will we compete? (What is our Product/Market strategy?)
    • Who will be our target customers? (Target customer = we will design our business to serve these customers better than anyone else in the world)
      • Who will we serve, but we will not design our business to serve them
      • Who will we not sell to?
    • What will be our core product and service range?
      • What is not core, but we will also sell to support sales of our core products and services?
      • What will we not sell?
    • What markets (geographies or industries) will we compete in?
    • What channels will we sell through?
      • What channels will we not sell through?
    • What are our product/market priorities?
      • Which product/market segments will we attack? (Attack = invest to grow market share)
      • Which product/market segments will we defend? (Defend = maintain market share)
      • Which product/market share are we prepared to lose share?
      • What are our financial goals (share, sales, profit) by product/market unit?
      • What are our resource allocation priorities? (P&L, R&D, Capex, Talent)
  • What will be our value proposition? (customer perspective – why customers buy from us)
  • How will we deliver this value proposition better than any competitor?
    • What will be our competitive advantage?
      • Resources?
      • Core Capabilities/Processes?
      • Culture/Values?
      • How will our supporting functions (e.g. HR, IT, finance) contribute to our value proposition?
  • What is our vision?
    • What is the deeper purpose of our company?
    • What are our unchanging core values?
    • What is our BHAG (Big Hairy Audacious Goal)?
    • What is the vivid description of our future?
  • What alternative strategies are possible? Why is our chosen one best? What were the criteria?

IV What is our plan to execute this strategy?

  • What action do we need to take to execute this strategy?
    • Where are we today?
    • Where are the gaps between where we are and our future strategy?
      • Product/Markets/Businesses
      • Capabilities
      • Infrastructure (e.g. IT)
      • Culture
    • Where are the objectives of each of these strategic initiatives?
    • Which gaps should we fill organically and which through acquisition?
  • How will we drive these strategic initiatives?
    • Have we created resource/time for our strategic initiatives by cancelling less important projects?
    • Have we ruthlessly prioritized our strategic initiatives? [Tool: Impact/Ease framework]
    • What does our portfolio of strategic initiatives look like? [Tool: Initiative Portfolio matrix]
      • By timescale – short/medium/long term
      • Types of innovation – product, process, marketing, business models, organisation
    • Have we set up each of our strategic initiatives for success?
      • Who will lead each of our key initiatives?
      • Have we created accountable plans?
      • Have we resourced these plans?
      • Have we thought through the implementation issues will we encounter, and how will we overcome them?
  • How will we monitor our progress?
    • What are our Strategic KPIs? [Tool: Balanced Scorecard]
    • What are the key quarterly milestones for our strategic initiatives?
    • What are the key events/triggers we need to monitor?
    • What competitive intelligence system do we have in place?
  • How will we align our organization with our strategy?
    • What Catalytic Mechanisms have we created?
    • How will we change our culture? From  what To what?
    • What changes will we need to make in our organisational structure?
  • How will we communicate our strategy?
    • What stories will bring it alive for our front line?
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