Market conditions Marketing strategy Marketing tactics Market assessment Market performance Manufacturing conditions Manufacturing strategy Manufacturing tactics Manufacturing assessment Manufacturing performance Human resource conditions Human resource strategy Human resource tactics Human resource assessment Human resource performance Financial conditions Financial strategy Financial tactics Financial assessment Financial performance ENVIRONMENTAL ANALYSIS Business Strategy FEEDBACK Business Performance Assessment of Business Conditions BUSINESS LEVEL FUNCTIONAL LEVEL STRATEGY Market objectives Manufacturing objectives Human resource objectives Financial objectives

Check financial performance Check customer reaction to brands, prices, and advertising Check production operations Check out competition strategic direction tactics market’s response

As needed, adjust strategy // brand designs and prices // advertising sales management // production plan Check finances Feed decisions into Marketplace Live simulator

Brand judgment (0 to 100) Price judgment (0 to 100) Ad judgment (0 to 100) 100 indicates complete satisfaction. 70 would be a good brand and ad rating until new technology is available in Quarter 4. Price ratings should be near 100.

Give the customer what they want and do so better than the competition.

Hot Cold LessMore Hot Cold LessMore Hot Cold Less More Hot Cold LessMore Hot Cold LessMore Hot Cold Less More

Revise brand designs or create new ones // Revise ad copy Adjust prices // Hire more sales people or deploy differently Add or take away elements to find the sweet spot in the customer’s response function.

Brand and ad designs // Prices and sale priorities Sales strategy // Sales staffing // Ad placements Demand by brand by segment Human resources // Manufacturing

Reverse engineer the strategy of each competitor Determine who is a threat and who is not Determine strengths and weakness of competition Emulate good decisions Predict direction of competitive moves Adjust strategy and tactics in reaction to competitor strengths and weaknesses and in anticipation of future moves.

Firm profitability // Brand profitability Return on investment // Asset management // Etc.

Discover which brands, markets, and business functions are making the greatest and weakest contribution to the bottom line. Deploy resources to correct weaknesses and take advantage of strong performers.

High production Lower unit production costs Risk of too much inventory Uses up large volumes of cash Risk of brand obsolescence (wrong product in warehouse) Low production Low cash requirements Higher per unit production costs Risk of too little inventory Stock outs // Lost revenue // Customer ill will (unhappy customers)

The Balanced Scorecard

It is too easy to get caught up in market share and short-term profits. Long-term viability requires that managers also deliver customer satisfaction and invest in the future. The balanced scorecard measures both the long- and short-term. The best managers will be good in all areas measured.

Financial performance x Market performance x Marketing effectiveness x Investments in the firm’s future x Creation of wealth x Asset management x Manufacturing productivity x Financial risk x HR management

The Management of Strategy – Learn From: Your customers Your competition Your operational information Your employees Your financial information to skillfully adjust your strategy and tactics

Using the tools of management accounting reports (financial statements) industry financial benchmarks (industry financial ratios) human resource reports market feedback profitability analysis (activity based costing)