Designing a Competitive Business Model and Building a Solid Strategic Plan

Intellectual Capital Human Capital Structural Capital Customer Capital

Strategic Management Developing a game plan to guide a company as it strives to accomplish its vision, mission, goals, and objectives and to keep it from straying off its desired course.

Building a Competitive Advantage the aggregation of factors that sets a small business apart from its competitors and gives it a unique position in the market that is superior to its competition.

the key is ……………………………….. sustainable competitive advantage

Building Sustainable Competitive Advantage Capabilities Superior value for customers Lessons learned Core Competencies Sustainable competitive advantage Skills

Developing a Strategic Plan Use a short planning horizon-2 yrs or less Be informal, use shirtsleeve approach Encourage participation of others Do not begin with setting objectives Maintain flexibility-conditions change too fast Focus on strategic thinking, not planning Planning will be an ongoing process

The Strategic Management Process Develop a clear vision-translate into mission Assess companies’ strengths and weaknesses Scan the environment-opportunities and threats Identify key factors for success Analyze competition Create company goals and objectives Formulate strategic options and select Translate strategic plans into action plans Establish controls

Vision Statement The result of an entrepreneur’s dream of something that does not exist yet and the ability to paint a compelling picture of that dream for everyone else to see Provides direction Determines decisions Motivates people

Mission Statement What business are we in? What are we in business to accomplish? How are we going to accomplish that purpose? What principles and beliefs form the foundation of the way we do business?

Strengths and Weaknesses Strengths-positive internal factors that a company can use to accomplish its mission, goals and objectives Weaknesses-negative factors that inhibit the accomplishment of a company’s mission, goals, and objectives

Opportunities and Threats Opportunities-positive external options that a firm can expect to exploit to accomplish its mission, goals, and objectives Threats-negative external forces that inhibit a company’s ability to achieve its mission, goals, and objectives

Key Success Factors The factors that determine a company’s ability to compete successfully in an industry

Analyze the Competition Competitive intelligence Competitor analysis Competitive profile matrix Knowledge management-the practice of gathering, organizing, and disseminating the collective wisdom and experience of a company’s employees for the purpose of strengthening competitive position

Create Company Goals and Objectives Goals-the broad, long-range attributes a business seeks to accomplish, tend to be general and sometimes abstract Objectives-more specific targets of performance, commonly addressing areas such as profitability, productivity, growth, and other key aspects of business

SMART Goals Specific Measurable Assignable Realistic Timely

Formulate Strategic Options/ Select Strategies Strategy-a roadmap of the actions an entrepreneur draws up to fulfill a company’s mission, goals, and objectives Cost leadership Differentiation Focus

Cost leadership-a strategy in which a company strives to be the lowest-cost producer relative to its competitors in the industry Differentiation-a strategy in which a company seeks to build customer loyalty by positioning its goods and services in a unique or different fashion Focus-a strategy in which a company selects one or more market segments, identifies customers’ needs, wants, and interests, and approaches them with a good or service designed to excel in meeting those needs, wants and interests

Translate Strategic Plans into Action Plans Divide into projects Assign priorities to them Implement top priority projects

Establish Controls Balanced scorecard-a set of multidimensional measurements that are unique to a company and that incorporate both financial and operational measures to give managers a quick yet comprehensive picture of a company’s overall performance

Balanced Scorecard Customer perspective-How do customers see us? Internal perspective-At what must we excel? Innovation perspective-Can we continue to improve and create value? Financial perspective-How do we look to shareholders?