1 MACD Workshop v5 (AV).ppt Kuala Lumpur, March 27, 2012 Workshop Strategic planning and sustainability
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Kuala Lumpur, March 27, 2012
Workshop
Strategic planning and sustainability
1
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Strategic analysis
Strategy selection
Monitoring
Execution
Execution planning
External
scanning
Learning
The strategic planning cycle – How it is supposed to work
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Sound strategies ought to be based on rigorous fact-based analysis and unbiased decision making
Process of strategic management
Strategic analysis Strategy selection Strategy implementation
External
analysis
Opportunities
Threats
Internal
analysis
Strengths
Weaknesses
Objectives
Strategy decision:
Choose a strategy
Converting strategy
into operational plans
People, resources,
structures, processes,
culture needed
Making people act in
line with strategy
Monitoring, learning,
correcting
Strategy
options
Evaluation Strategy
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Going through the strategic planning cycle – How often?
• Daily: "normal" external events might require new
strategic responses, effecting the whole cycle
• Monthly: KPI reports etc.
• Annually: budgeting and investment planning and
strategic planning must be consistent and aligned
• Occasionally: for example when:
– Company in trouble
– Major external shocks
– New owners etc.
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5
Winning strategies provide answers to five key questions
What do we
want?
Where do we
play?
How do we
win?
Have we got,
what it
takes?
Which
enablers do
we need?
Co
rpo
rate
Str
ate
gy
Bu
sin
ess
Str
ate
gy
Strategic key questions
Parenting
Advantage
Competitive
Advantage
Targets and
ambitions
Markets USPs Capabilities &
Resources
Structures
and systems
INHERENT POTENTIAL ABILITY TO ACHIEVE
POTENTIAL
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Are we organized strategically = Aimed at long term sustainability?
Daily? Angles wide enough?
Analytical skills good and un-
biased enough?
All options found and considered
"fairly"?
Are planners capable of understanding execution
complications?
Right managers? If not, what is done about it?
Do KPIs measure the right things? And are
measurements correct?
What are the mechanisms for continuous learning? Are they
effective?
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7
C. SWOT analysis
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The SWOT analysis aims to provide a sound analytical basis for identification and selection of strategy options
SWOT analysis
Internal
analysis
External
analysis
STRENGTHS
Build on strengths and
intensify competitive
advantage
WEAKNESSES
Overcome weaknesses and
turn them into strengths
OPPORTUNITIES
Closely track environment
and take advantage of
upcoming events
THREATS
Early recognize threatening
situations/events/factors
and formulate action plan to
minimize risks
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The analysis of internal strengths and weaknesses looks at all resources and aspects of a company and its success factors
• Define current and future potential
• Evaluate the subjective assessment of the defined
potential and attempt to make it objective
– Comparing the potential with the industry
development or the development of the most
important competitors
– Weighing the corporate data against the business
standards
– Examining the analyzed strengths and weaknesses
with respect to the corporate / public goals
• Determine the success factors of the company /
institution
EXTERNAL ANALYSIS
3.
Market
Compe-titors
Customers/trends
Sales channel structures
1
INTERNAL ANALYSIS
Products/ranges
Sales/profit development
Core com-petencies
Organi-zation/framework
2
SWOT ANALYSIS
• Success factors
• Strengths/weaknesses
• Opportunities/threats
3
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EXTERNAL ANALYSIS
3.
Market
Compe-titors
Customers/trends
Sales channel structures
1
INTERNAL ANALYSIS
Products/ranges
Sales/profit development
Core com-petencies
Organi-zation/framework
2
SWOT ANALYSIS
• Success factors
• Strengths/weaknesses
• Opportunities/threats
3
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The external analysis examines the environment of a company and determines opportunities and threats
• Monitor and examine trends and developments and
determine their relevance
– Political, economical
– Markets, consumers
– Competitors (incl. up/down value chain)
– Social, demographic, cultural
– Technical, technologies
– Legal, regulatory
– Shocks, events, disasters, weather etc.
• Analyze / assess their significance for the company
• Recognize future opportunities and threats as quickly
as possible and react to a changing environment by
– Realizing external signals in "real time"
– Collecting information continuously and analyzing it
immediately drawing the necessary conclusions
from it
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The number of external factors driving long term business success are many
Rivalry among
competitors
Threat of new
entrants
Threats of
substitutions
Suppliers’
bargaining power
Customers’
bargaining power Business
Source: Porter, 1980
Greater strategic partnerships with suppliers to address S&E risks
Power of reputation as a business asset. Comparative advantage
Growing loyalty towards ‘responsible’ suppliers
Greater differentiation in S&E performance of product/services
Increased barriers to entry from growing societal and environmental standards
Socio-demographic environment
Ecological environment
Technological environment
Political and legal environment
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Sales and marketing
Operations
Human resources
R&D and technology
Financial and accounting
Purchasing, suppliers
Coordination mechanisms
Social, demographic
Technological
Economic
Market, customers
Political/legal/regulatory
Industry and competition
Strengths Weaknesses Opportunities Threats Internal External
??
The SWOT matrix should group and categorize key internal strengths and weaknesses as well as external opportunities and threats
Links and interactions between internal and external factors will have to be further investigated in order to develop strategic options
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Source: Roland Berger
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Photos
Use only photos of consistent style that are in line with the Roland Berger Corporate Design. The Graphics Operators will be pleased to help you select them.
for German billed projects w ith increased risk of liability
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Set Disclaimer (RB Ribbon → Text → Set
Disclaimer) creates the disclaimer slide at the end
of the document:• Legal note – Copyright GmbH – Disclaimer – E
• Legal note – Copyright GmbH – Disclaimer – G
Disclaimer
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Cover slidebasis lay out "Cov er Page"
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Chapter slidebasis lay out"Title Slide"
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13
E. Strategy planning and sustainability
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… but, there is consensus that sustainability requires conciliation of environmental, social and economic demands
Society
Economy Environment
Bearable Equitable
Viable
Sustainable
Source: World Summit 2005, Roland Berger
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But, sustainability must be linked to the corporate strategy
Any sustainability strategy that is
not closely linked to the core of
the organization – the business –
will fail
Source: Roland Berger
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Generally, sustainability initiatives support one of three strategic goals
16
GENERATING
BUSINESS
1
• With forward-thinking, business opportunities can be generated through activities that better
society and preserve our planet
• Social and environmental needs are emerging in B2B and B2C markets, demographic profiles
are changing, creating new customer segments
• Companies can profit through innovations to fulfill these new needs and values by actively
targeting these segments
ENHANCING
BUSINESS 2 • Companies that want to grow profitably need to develop and nurture a solid reputation and a
healthy internal culture around sustainability
• Reputation is becoming an increasingly important differentiation factor on both customer and
employment markets
• Creating a healthy internal culture is critical to attracting and retaining the right people to
provide continuous value creation and cost savings
MANAGING
RISK
3
• Many already address some ecological or social risks by establishing environmental
management or whistle blower protection
• Companies should integrate sustainability issues more actively into risk management to
indentify gaps and act to become less vulnerable
Source: Roland Berger
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The product offering should be tailored to the segment needs
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SUSTAINABILITY-NEEDS PROFILE PRODUCT DIFFERENTIATION
Source: Roland Berger
3 GENERATING BUSINESS
Sport Resource Efficient
Work-Life Balance
Protect Climate
Regional Products
Nutrition conscious
Human rights
Development Aid
National Pride
Helping Neighbors
Family
Social Engagement
Health
Education
Culture
Protect Nature
Independence
Science & Research
Ethical Standards
• Environmentally friendly
• Healthy – "Good for me"
• Sustainable corporate values
• "Green image"
• Helps a special cause (Product RED)
• Promotes fair trade
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Different types of industry focus on different sustainability aspects
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Examples for sustainability-segments (Illustrative)
Source: Roland Berger
SUSTAINABLE
PROCESSES 1
SUSTAINABLE
PRODUCTION 2
SUSTAINABLE
PRODUCT USE AND
RECYCLING
3
SUSTAINABLE
RESOURCE SOLUTIONS
AND SUPPLY CHAIN
4
SUSTAINABLE
PRODUCT INNOVATIONS 5
SUSTAINABLE
VALUE CHAIN 6
3 GENERATING BUSINESS
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So what do we do?
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Source: Roland Berger
1 LINK YOUR SUSTAINABILITY INITIATIVES TO THE CORPORATE STRATEGY
Actions to ensure the success of sustainability initiatives
2 CLEARLY ARTICULATE HOW SUSTAINABILITY HELPS TO MANAGE RISKS
3 DEFINE HOW SUSTAINABILITY REDUCES COSTS
(DIRECT AND INDIRECT)
4 DEVELOP INITIATIVES THAT FURTHER ENHANCE THE BUSINESS
5 CREATE A DIRECT LINK BETWEEN CUSTOMER EXPECTATIONS AND SUSTAINABILITY
Contact us
Anthonie Versluis Managing Partner Malaysia
Roland Berger Strategy Consultants Sdn Bhd (949134-W)
Level 39, Menara Standard Chartered
30 Jalan Sultan Ismail
50250 Kuala Lumpur
Tel: +603-22038600
Email: [email protected]
Mobile: +6019-6290073
www.rolandberger.com