Introduction to Business Strategy Development & Strategy Execution

Flevy Business Primer

Introduction to Business Strategy Development & Execution

This primer is available for free at http://flevy.com/strategy-frameworks

Flevy Business Primer

Introduction to Business Strategy Development & Execution

A successful business requires both a well developed strategy and the ability to execute on that strategy. Strategy without execution is merely theory. Many companies develop robust strategies, but fail at operationalizing their strategies into implementable steps. This document introduces 12 powerful business frameworks for Strategy Development and Strategy Execution.

Consolidation-Endgame Curve

Blue Ocean Strategy

Marketing Mix(4/7 P’s)

Porter’s Five Forces

SWOT Analysis Product Lifecycle

BCG Growth-Share Matrix

PEST AnalysisConsumer Adoption

Curve

1

2

3

4

5

6

7

8

9

BalancedScorecard

Organizational Hurdles

Hoshin Kanri

10

11

12

STRATEGY DEVELOPMENT STRATEGY EXECUTION

This primer is available for free at http://flevy.com/strategy-frameworks

33

Flevy.com (http://flevy.com) – Marketplace for premium business documents

Download the latest version of this primer for free at: http://flevy.com/strategy-frameworks / Question? Email us: [email protected]

Flevy (www.flevy.com) is the marketplace

for premium documents. These

documents can range from Business

Frameworks to Financial Models to

PowerPoint Templates.

Flevy was founded under the principle that

companies waste a lot of time and money

recreating the same foundational business

documents. Our vision is for Flevy to

become a comprehensive knowledge base

of business documents. All organizations,

from startups to large enterprises, can use

Flevy— whether it's to jumpstart projects, to

find reference or comparison materials, or

just to learn.

Contact Us

Please contact us with any questions you may have about our company.

• General Inquiries [email protected]

• Media/PR [email protected]

• [email protected]

44



Contents

Overview 5

Strategy Development Frameworks 7

Strategy Execution Frameworks34

Summary44

Appendix50

55



Contents

Overview

Strategy Development Frameworks

Strategy Execution Frameworks

Summary

Appendix

66



Strategy without execution is merely theory—in this document, we will discuss 12 frameworks on Strategy Development and Execution

Each framework is geared towards a specific type of analysis—pick and choose the best frameworks to use for your particular business problem.

Executive Summary

A successful business requires both a well developed strategy and the ability to execute on that strategy.

Strategy without execution is merely theory. Many companies develop robust strategies, but fail at operationalizing

their strategies into implementable steps.

This document covers frameworks that deal with both sides—Strategy Development and Strategy Execution.

In this presentation, we will discuss 12 business frameworks. For each framework, we will provide an overview,

explain its proper usage, and highlight the analyses involved.

This document will also provide references to more detailed documentation, guides, and methodologies if you would

like more information.

The following business frameworks will be discussed:

• Consolidation-Endgame Curve

• Porter’s Five Forces

• BCG Growth-Share Matrix

• Marketing Mix (4/7 P’s)

•Blue Ocean Strategy

•SWOT Analysis

•PEST Analysis

•Product Lifecycle

•Consumer Adoption Curve

•Balanced Scorecard

•Organizational Hurdles

•Hoshin Kanri

77



Contents

Overview



Summary

Appendix

88



In this section, we will cover 9 strategy frameworks—6 focus on external, competitive factors, while 3 rely on internal strategies

A well developed strategy should use at least 5 of the above analyses covering both external and internal perspectives.


Consolidation-Endgame

CurveBlue Ocean Strategy Marketing Mix (4/7 P’s)

Porter’s Five Forces SWOT Analysis Product Lifecycle

BCG Growth-Share Matrix PEST Analysis Consumer Adoption Curve

These first 6 frameworks focus more on Industry and Competitive Analysis—they are more externally focused.

These 3 frameworks are more Product focused—and rely on more internal

strategies.

1

2

3

4

5

6

7

8

9

99



1. Consolidation-Endgame Curve

This framework not only helps us define a more informed corporate strategy, but also helps define our organizational structure and the proper management team.

Overview


Blue Ocean Strategy

Marketing Mix


SWOT AnalysisProductLifecycle

BCG Matrix PEST AnalysisConsumer

Adoption Curve

• The Consolidation-Endgame Curve framework (also known as Consolidation Curve or Endgame Curve) is not a well known framework, but is one that offers incredibly insights into market dynamics and competitive strategies.

• This framework was developed by the management consulting firm AT Kearney after they performed a study on 25,000 firms, representing 98% of the global market cap. The firm realizes that all industries go through the same 4-stage lifecycle—Opening, Scale, Focus, Balance & Alliance.

• Across all industries, the same characteristics are exhibited at each stage of the Curve

• By appropriately identifying our stage and understanding the defining traits and behavior of our stage, we can better understand and predict market and competitive behavior and trends. Every major strategic and operational move should be evaluated with regard to the industry’s stage in the Consolidation Curve.

• On a more subtle note, the industry stage also governs what type of management and leadership works best for the company. In other words, the management team in the Scale phase may not possess the right skills to run the company at the Balance & Alliance stage.

1010




In the final stage, industry titans dominate the landscape, controlling 70% of the market—any number of businesses can occupy the remaining 30%.

4 Stages of Consolidation

Source: Winning the Merger Endgame, 2002


Blue Ocean Strategy

Marketing Mix




Adoption Curve

Stage IV

BALANCE & ALLIANCE

Stage III

FOCUS

Stage II

SCALE

Stage I

OPENING

DESCRIPTION

COMBINEDSHARE OF TOP

3 PLAYERS

The industries operating in the Opening stage include newly deregulated industries, startups, and spin-off industries

New industry catalysts can include new technology, new regulation, new ideas, and new consumer needs

There is little to no market concentration at this point

In the Scale stage, major players begin to emerge and size begins to matter—these players take the lead in consolidation

Niche players begin to feel pressure

Concentration rates can be as high as 45% in some industries

In the Focus stage, successful players continue to aggressively outgrow competition

These companies focus—meaning they extend their core business and eliminate secondary business units

The supply and value chains begin to be streamlined

In the final stage, consolidation rates reach 90%, so a few players dominate each industry at this point

Large companies form alliances with each other, as growth is challenging at this stage

Companies often look for new Opening-stage industries to expand into

41% 42% 50% 70%

1111




The combined market share of the top 3 players follows an S-curve.

Consolidation-Endgame Curve Diagram

Source: Winning the Merger Endgame, 2002


Blue Ocean Strategy

Marketing Mix




Adoption Curve

Stage I

OPENING

Stage II

SCALE

Stage III

FOCUS

Stage IV

BALANCE & ALLIANCE100%

0%

Combined Share of

Top 3 Players

Time

50%

Maximum

Minimum

Combined market share of top 3 players

1212




More Information


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• This framework is explained in detail in the document Consolidation Endgame Curve

• Topics covered include: stages of consolidation, growth strategy implications, stage impact on financials, stage impact on strategy and operations, stage impact on management/organization, Value-Building Growth Matrix, and niche strategies

Learn more about the Consolidation-Endgame Curve here:https://flevy.com/browse/business-document/consolidation-endgame-curve-framework-201

DETAILS

• Seller: LearnPPT

• File size: 800KB

• Number of Slides: 29

RELATED DOCUMENTS/FRAMEWORKS

• Guide to Business Strategy Design - https://flevy.com/browse/business-document/complete-guide-to-business-strategy-design-375

• Growth Strategy Toolkit - https://flevy.com/browse/business-document/growth-strategy-208

• Five Stages of Business Growth - https://flevy.com/browse/business-document/five-stages-of-business-growth-249

1313




Several important economic and technical characteristics of an industry are critical to the strengths of each competitive force.

Overview


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• Developed by Michael Porter, recognized as the father of modern business strategy, Porter’s Five Forces is one of the most well known classic strategy frameworks

• Porter’s Five Forces is a framework used for industry analysis and understand the various dynamics amongst industry players and external “forces”

• It is based on the theory that competition in any industry is dependent on 5 basic forces—Potential Entrants, Internal Rivalry, Suppliers, Buyers, and Substitutes (or Complements). The collective strength of these forces determines the ultimate profit potential and allocation in the industry.

• Using this framework, we can determine how attract it is to compete in any industry, as well as what the overarching strategy should be to compete successfully in the industry—success is determined by the ability to develop a sustainable competitive advantage

• It can also be used to assess which industry trends may pose as opportunities or threats

1414




5 Forces Explained and Framework Diagram


Blue Ocean Strategy

Marketing Mix




Adoption Curve

Pressure from Substitute Products

Bargaining Power of BuyersBargaining Power of Suppliers

Threat of New Entrants

Intensity of Rivalry

Low, stable returns

Low, risky returns

High, stable returns

High, risky returns

Exit Barriers

Entry Barriers

L

H

L H

CostLeadership Differentiation

CostFocus

DifferentiationFocus

Competitive Advantage

CompetitiveScope

Broad

Narrow

Lower Cost Differentiation

A supplier group is powerful when: It is dominated by a few companies and is more

concentrated than the industry it sells to. There are no substitute products. The industry is not an important customer. Its products are important to the industry. Products are differentiated or suppliers have built

up switching costs. It poses a credible threat of forward integration.

Barriers to entry: Economies of scale (including shared resources) Product differentiation (proprietary) Capital requirements Switching costs Access to distribution channels Cost disadvantages independent of scale Government policy Expected reaction of incumbent

Intense rivalry results from: Numerous or equally balanced competitors Slow industry growth High fixed or storage costs Lack of differentiation or switching costs Capacity augmented in large increments Diverse competitors High strategic stakes High exit barriers

A buyer group is powerful when: It is concentrated or purchases large volumes relative

to seller sales. The products represent a significant fraction of the

buyers’ costs or purchases. The products are standard or undifferentiated. It faces few switching costs. It earns low profits. It poses a credible threat of backward integration. The bought product is unimportant. It has full information.

Search for products that can perform the same function.

Assess buyers’ propensity to substitute.

Focus on those that: Are improving their price performance trade-off

compared with the industries products. Require low switching costs. Are produced by industries earning high profits.

Take offensive or defensive actions to create a defensible position against the forces:

Positioning the firm so its capabilities provide the best defense

Influencing the balance of forces through strategic moves

Anticipating shifts in the factors underlying the forces and responding to them

1515




More Information


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• This framework is explained in detail in the document Porter’s Five Forces

• Flevy has multiple documents that discuss and teach this framework in detail:

• Porter’s 5 Forces Model and Application

• Complete Business Frameworks Guide

Learn more about Porter’s Five Forces here:https://flevy.com/browse/business-document/porters-five-forces-235

DETAILS





• Growth Strategy Toolkit - https://flevy.com/browse/business-document/growth-strategy-208

• Blue Ocean Strategy - https://flevy.com/browse/business-document/blue-ocean-strategy-the-peaceful-strategy-114

• Industry Analysis - http://flevy.com/browse/business-document/industry-analysis-773

1616




This framework helps the us allocate resources and is can be used as an analytical tool in brand marketing, product management, strategic management, or portfolio analysis.

Overview


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• The BCG Growth-Share Matrix (also called Product Portfolio and Boston Matrix) is a classic competitive positioning strategy framework developed by the management consulting firm Boston Consulting Group (BCG).

The growth-share matrix displays graphically in a 2-by-2 matrix one of two scenarios: The position of each business of a company’s portfolio; or Compares the position of various players in one industry.

The two axes of the matrix are 1) market/industry growth and 2) relative market share (RMS). We then plot our products onto the matrix and quadrant associated with the product drives its strategy. The quadrants are defined as follows:

Star – high RMS, high market growth Cash cow – High RMS, low market growth Dog – Low RMS, low market growth Question mark – Low RMS, high market growth

The key premise to this framework is that products located in each of the quadrants will be in fundamentally different cash flow positions and should be managed differently.

This framework is used to assess trends in the evolution of a company’s portfolio of business (when matrix is drawn for both the current year and past years). It can also be used to understand the competitive position of each business, possible cash requirements, and focus attention on key issues.

1717




4 Quadrants Explained


Blue Ocean Strategy

Marketing Mix




Adoption Curve

Cash Cow

Dog

QuestionMark

Star

?

Cash cows are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.

Dogs, or more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company. They depress a profitable company's return on assets ratio, used by many investors to judge how well a company is being managed. Dogs, it is thought, should be sold off.

Question marks (also known as problem child) are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.

Stars are units with a high market share in a fast-growing industry. The hope is that stars become the next cash cows. Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit to remain a leader. When growth slows, stars become cash cows if they have been able to maintain their category leadership, or they move from brief stardom to dogdom.

1818




BCG Matrix Framework Diagram


Blue Ocean Strategy

Marketing Mix




Adoption Curve

IndustryGrowth

X%

Y%

RelativeMarket Share

0Z

Cash Cow Dog

Question MarkStar

?

1919




More Information


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• This framework is explained in detail in the document BCG Growth-Share Matrix

• Topics covered include: quadrant definitions, analysis steps/process, examples, templates, and tips.

Learn more the BCG Growth-Share Matrix here:https://flevy.com/browse/business-document/bcg-growth-share-matrix-200

DETAILS





• Market Analysis - https://flevy.com/browse/business-document/market-analysis-215

• Product Lifecycle - https://flevy.com/browse/business-document/product-lifecycle-227

2020



Blue Ocean Strategy

Blue Ocean Strategy challenges many of the conventional principles of strategy, based on the pursuit of “competitive strategy.”

Overview


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• Blue Ocean Strategy is growth strategy framework focused on the idea of creating an uncontested market space--i.e. a "blue ocean." This framework is very innovative, as its principles challenge the conventional business strategy principles of fighting competitors head-on.

• The Blue Ocean Strategy framework evolved from a framework called Value Innovation developed by Gemini Consulting (now Capgemini Consulting) in the late 90s.

• At the heart of Blue Ocean Strategy, we have concept of Value Innovation. Value without innovation tends to focus on value creation on an incremental scale, i.e. something that improves value but is not sufficient to make us really stand out in the marketplace. Innovation without value tends to be technology-driven, market pioneering, or futuristic, often shooting beyond what buyers are ready to accept and pay for.

• Value Innovation occurs only if we align innovation with utility, price, and cost positions. The focus here is not time-to-market, bleeding-edge technology or best practices. It is the ambition to break one of the most commonly accepted dogmas of competition-based strategy: the value-cost trade-off.

• It is conventionally believed that companies can either create greater value to customers at a higher cost, or create reasonable value at a lower cost. Here, strategy is seen as making a choice between differentiation and cost. In contrast, to create blue oceans, we need to pursue differentiation and low cost simultaneously, by looking within and beyond our industry boundaries and redefining a market altogether.

2121



Blue Ocean Strategy

Value Creation Thinking


Blue Ocean Strategy

Marketing Mix




Adoption Curve

Growth Focus

Value Identification

Value Creation

Effective Execution

• Start with customer needs• Look beyond traditional

markets, industries and competitors

• Create multi-horizon portfolio

• Develop growth platforms for “market mining”

• Understand what the customer values

• Prioritize initiatives

Growth Platform

Consumer Need

Market Trends

Val

ue

• Select and develop growth option

• Align operating model to deliver value and fair value Concept Execution

• Venture Launch• Organizational alignment• Funding / Resource

Allocation• Measurements• Accountability

Sustainable Growth Structure

• Infrastructure• Culture• Alliance Management• M&A

Eliminate Reduce Raise Create

Costs

Value

ValueInnovation

Source: C. Kim, R. Mauborgne, Harvard Business Review (1997)

2222



Blue Ocean Strategy

Value Curve Framework and Diagram


Blue Ocean Strategy

Marketing Mix




Adoption Curve

Source: C. Kim, R. Mauborgne, Harvard Business Review (1997)

Which of the attributes that our industry takes for granted should be eliminated?

Which attributes should be reduced well below the industry’s standards?

Which attributes should be raised well above the industry’s standards?

Which attributes should be created that the industry has never offered?

Eliminate

Value Innovator

Val

ue

+

-

Reduce Raise Create

Traditionals

A powerful framework used in Blue Ocean Strategy analysis is the Value Curve, which depicts where traditional, incumbent players are placing their value. It allows us to visualize where competition places value, where customers place value, and where are potential opportunities to disrupt the market. We can determine which specific value attributes to eliminate, to reduce, to raise, and to create. By creating new value attributes, we creating a blue ocean to compete in.

2323



Blue Ocean Strategy

More Information


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• We have 2 frameworks that do a great job of explaining the Blue Ocean Strategy framework:

• The Peaceful Strategyhttps://flevy.com/browse/business-document/Blue-Ocean-Strategy---The-Peaceful-Strategy-114

2.4MB, 35 slides, includes 1-page mind map (PDF)

• Blue Ocean Strategy Primerhttps://flevy.com/browse/business-document/Blue-Ocean-Strategy-Primer-113

600KB, 18 slides


• Blue Ocean Strategy Canvas (Excel Template) - https://flevy.com/browse/business-document/blue-ocean-strategy-canvas-template-448

• Growth Strategy Toolkit – http://flevy.com/browse/business-document/growth-strategy-208

• Growth Opportunity Assessment - https://flevy.com/browse/business-document/growth-opportunity-assessment-759

• Business Model Innovation - https://flevy.com/browse/business-document/business-model-innovation-136

2424



SWOT Analysis

Many market research firms routinely publish SWOT analyses for public companies.

Overview


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• The SWOT Analysis (also called SWOT Matrix) is one of the earliest strategy frameworks. It was developed in the 1960s at Harvard Business School by Learned, Christensen, Andrews, and Guth.

• The name is an acronym for Strengths, Weaknesses, Opportunities, and Threats.

• This framework provides basic directions for structuring strategic analysis.

• The underlying theory is that assessment of competitive position should combine both an external and an internal analysis. The internal factors are Weaknesses and Strengths, whereas the external factors are Opportunities and Threats.

• We can conduct SWOT analyses for our own organization in addition to our competitors, so that we gain added insight into our company’s competitive position.

• The output of this analysis is often displayed in the form of a 2x2 matrix.

• SWOT Analysis is often conducted in conjunction with PEST Analysis.

2525



PEST Analysis

PEST Analysis been sometimes been extended to include Legal and Environmental, forming the name PESTLE Analysis.

Overview


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• PEST Analysis is a framework evaluating macro-environmental factors used in the environmental scanning component of strategic management. The PEST analysis framework has become increasingly popular and relevant as the first decade of the 21st century have given rise to green business and environmental concerns from the public.

• PEST is an acronym for Political, Economic, Social, and Technological, which are the macro-environmental factors to analysis in this analysis.

• This analysis is often performed in conjunction with other popular frameworks, as a means of enhancing the understanding and output of these other frameworks. Specifically, it is often used to help explain the analysis in the following frameworks:

• Porter’s Five Forces;

• SWOT Analysis;

• Value Chain Analysis; and

• Industry financials.

• PEST Analysis is often performed in a 3-phase process: data collection, industry trend analysis, and trend quantification.

2626



Marketing Mix (4/7 P’s)

In most cases, Price and Product are the more important factors and are determined first—as these are more closely tied to our competitive advantage.

Overview


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• The 4 P’s of marketing, often just called Marketing Mix, is perhaps the commonly used corporate marketing framework. The marketing mix refers to the 4 levers to adjust when determining the essence of product’s marketing strategy.

• The 4 P’s refer to Price, Product, Promotion, and Placement.

• This framework has been extended to 7 P’s, to also include Physical Evidence, People, and Process.

• The definitions for the additional 3 P’s should not be confused with the People-Process-Technology framework, which is more operationally-focused (vs. consumer-focused).

2727




Definitions of the P’s


Blue Ocean Strategy

Marketing Mix




Adoption Curve

Product

A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry, the hotel industry and the financial industry. Tangible products are those that have an independent physical existence.

Typical examples of mass-produced, tangible objects are the motor car and the disposable razor. A less obvious but ubiquitous mass-produced service is a computer operating system. Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales falls.

Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage. The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line’s depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company’s resources and how to configure the product mix so that each product complements the other.

The marketer must also consider product development strategies.

The amount a customer pays for the product. The price is very important as it determines the company’s profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.

When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, market penetration pricing and neutral pricing. The ‘reference value’ (where the consumer refers to the prices of competing products) and the ‘differential value’ (the consumer’s view of this product’s attributes versus the attributes of other products) must be taken into account.

Price

1

2

2828






Blue Ocean Strategy

Marketing Mix




Adoption Curve

Promotion

All of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion.

Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations.

Refers to providing the product at a place which is convenient for consumers to access. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix. Price

3

4

2929






Blue Ocean Strategy

Marketing Mix




Adoption Curve

Physical Evidence

Elements within the store — the store front, the uniforms employees wear, signboards, etc.

The employees of the organization with whom customers come into contact.

The processes and systems within the organization that affects its marketing process.

People

Process

The additional 3 P’s are mostly relevant to Service marketing.

5

6

7

3030




More Information


Blue Ocean Strategy

Marketing Mix




Adoption Curve

The Flevy author DemandMetric specializes in Corporate Marketing tools built in Excel:https://flevy.com/seller/demandmetric

Below, we have compiled a number of Corporate Marketing-focused frameworks and tools.

PRICING STRATEGY

• Pricing Strategy Framework - https://flevy.com/browse/business-document/pricing-strategy-226

• Pricing Strategy Workshop - https://flevy.com/browse/business-document/pricing-strategy-workshop-764

• Price Increase Execution - http://flevy.com/browse/business-document/best-practices-in-price-increase-execution-681

PRODUCT STRATEGY

• Product Lifecycle - https://flevy.com/browse/business-document/product-lifecycle-227

• Rogers’ Five Factors - https://flevy.com/browse/business-document/rogers-five-factors-169

• Psychology of Product Adoption - https://flevy.com/browse/business-document/psychology-of-product-adoption-203

MARKETING PLAN DEVELOPMENT

• Marketing Plan Framework - https://flevy.com/browse/business-document/marketing-plan-development-framework-174

• Strategic Marketing and Sales Planning - https://flevy.com/browse/business-document/strategic-marketing-and-sales-planning-612

• Strategic Marketing Plan Template - https://flevy.com/browse/business-document/strategic-marketing-plan-template-676

3131



Product Lifecycle and Consumer Adoption Curve

Be aware that as a product moves through its lifecycle, the likelihood of customers switching to a substitute product increases.

Overview


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• Product Lifecycle analysis is a tool to predict how sales will develop based on the age of the product category. Marketers and strategists can use this analysis to predict sales growth, associated customer and competitor behaviors, and, in turn, devise the appropriate product marketing strategy.

• The Product Lifecycle itself it divided into 4 stages of development: Introduction, Growth, Maturity (and Saturation), and Decline (and Termination).

• The length of each period varies tremendously. Some products have very short cycles, whereas others can take decades or even centuries to go through the cycle. The lifecycle can be mapped against the consumer adoption curve, where the peak of the curve generally occurs in the maturity stage of the Product Lifecycle.

• The Product Lifecycle is typically mapped against the Consumer Adoption Curve to draw out key marketing and competitive insights. By understanding what stage of the Consumer Adoption Curve we’re at, we can gain invaluable insights into the who our target customer are, as well as their defining attributes.

• The Consumer Adoption Curve is defined by 5 sequential stages: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards. Typically, the is a “chasm” between the Early Adopters and Early Majority.

• Product Lifecycle Analysis also provides a framework to understand the competitive environment. It makes an underlying assumption that sales and profitability follow a predictable pattern for all industries and all products within those industries.

3232




It is useful to map all products within an industry or product category against the Adoption Curve—to visualize dynamics among products (e.g. substitution, complements).

Product Lifecycle Mapped on Consumer Adoption Curve


Blue Ocean Strategy

Marketing Mix




Adoption Curve

“Cro

ssin

g t

he

Ch

asm

”

Innovators(2.5%)

Early Adopters(13.5%)

Early Majority(34%)

Late Majority(34%)

Laggards(16%)

STAGE 1

INTRODUCTION

STAGE 2

GROWTH

STAGE 3

MATURITY

STAGE 4

DECLINE

3333




More Information


Blue Ocean Strategy

Marketing Mix




Adoption Curve

• Both frameworks are explained in the document Product Lifecycle, with the emphasis on Product Lifecycle Analysis

• Additional topics covered include: Bass Diffusion Model, Lifecycle-Performance Factor Matrix, strategic positioning, and substitution analysis.

Learn more about Product Lifecycle and Consumer Adoption Curve analyses here:https://flevy.com/browse/business-document/product-lifecycle-227

DETAILS





• Pricing Strategy – https://flevy.com/browse/business-document/pricing-strategy-226

• Psychology of Product Adoption - https://flevy.com/browse/business-document/psychology-of-product-adoption-203

• Complete Business Frameworks Guide - https://flevy.com/browse/business-document/complete-business-frameworks-reference-guide-644

3434



Contents

Overview



Summary

Appendix

3535



In this section, we will cover 3 strategy execution frameworks

Organizations spend 90-95% of their time and resources on execution—despite this, most organizations fail at the execution of their strategies.

Strategy Execution Framework

Balanced Scorecard Organizational Hurdles Hoshin Kanri

1 2 3

3636



Balanced Scorecard

The BSC framework is flexible in that it allows for the strategy itself to evolve in response to changes in the company’s competitive, market, and technological environments.

Overview

Balanced

Scorecard

Organizational

Hurdles

Hoshin

Kanri

• The Balanced Scorecard (BSC) is a Strategy Performance Management tool. It is a semi-standard structured report, supported by proven design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. It was developed by Robert Kaplan and David Norton.

• The BSC approach is called “balanced,” because it supplements traditional financial measures with 3 key non-financial areas:

• A company’s relationship with its customers;

• Its key internal business processes; and

• Its learning and growth.

• This approach enables companies to track financial results, while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they need for future growth.

• BSC also provides a framework for company’s to translate their strategy into measurable and actionable KPIs and objectives. Specifically, it ties 4 key management processes (Translating the Vision, Communicating and Linking, Business Planning, and Feedback and Learning) into both short-term and long-term strategic objectives.

3737



Balanced Scorecard

4 Management Key Processes – Framework and Definitions

Source: Balanced Scorecard, Kaplan and Norton (2005)

Balanced

Scorecard

Organizational

Hurdles

Hoshin

Kanri

BalancedScorecard

Communicating and Linking

• Communicating and educating

• Setting goals

• Linking rewards to performance measures

Feedback and Learning

• Articulating the shared vision

• Supplying strategic feedback

• Facilitating strategy review and learning

Translating the Vision

• Clarifying the vision

• Gaining consensus

Business Planning

• Setting targets

• Aligning strategic initiatives

• Allocating resources

• Establishing milestones

1

2

3

4

3838



Balanced Scorecard

More Information

Balanced

Scorecard

Organizational

Hurdles

Hoshin

Kanri

• The BSC framework is explained in detail in our document Balanced Scorecard

• Topics covered include: Four Processes (Translating the Vision, Communicating and Linking, Business Planning, Feedback and Learning), Four Perspectives (Financial Measures, Customer Relationships, Internal Business Processes, Learning and Growth), Personal Scorecard, and Strategic Learning

• We have a number of other BSC documents, listed below

Learn more about the Balanced Scorecard here:https://flevy.com/browse/business-document/balanced-scorecard-134

DETAILS

• Seller: PPTLab




• BSC Strategy Map - https://flevy.com/browse/business-document/balanced-scorecard-strategy-map-256

• BSC Training - https://flevy.com/browse/business-document/opex-balanced-scorecard-training-module-567

• BSC Overview & Examples - https://flevy.com/browse/business-document/introduction-to-balanced-scorecard-723

3939




In Blue Ocean Strategy, the concept of overturning conventional wisdom on doing things is called “tipping point leadership.”

Overview

Balanced

Scorecard

Organizational

Hurdles

Hoshin

Kanri

• In Blue Ocean Strategy, the authors identify 4 main Organizational Hurdles that the organization must overcome for successful business execution. These hurdles arise when a company develops a new strategy to departs from the status quo.

• These hurdles are the Cognitive Hurdle, Resource Hurdle, Motivational Hurdle, and Political Hurdle.

• Although all companies face different degrees of these hurdles, many may only face a subset of the 4 hurdles. To overcome these hurdles effectively, organizations must abandon perceived wisdom on effecting organizational change.

4040




4 Organizational Hurdles Definitions

Source: Blue Ocean Strategy, Kim and Mauborgne, 2005

Balanced

Scorecard

Organizational

Hurdles

Hoshin

Kanri

CognitiveHurdle

ResourceHurdle

MotivationalHurdle

PoliticalHurdle

1 2 3 4

• Limited resources—whether in staff or finances

• The greater the shift in strategy, the greater the resources needed to execute it

• Opposition from powerful vested interests

• Any significant shift to an organization will result in a shift in political power

• An organization stuck on the status quo—an unwillingness to “rock the boat”

• An unmotivated staff

• Motivating staff to change the status quo often takes years—time that most organizations cannot afford

4141




More Information

Balanced

Scorecard

Organizational

Hurdles

Hoshin

Kanri

• The 4 Organizational Hurdles are discussed in the document Guide to Business Strategy Execution

• This document focuses on the topic of strategy execution and covers a number of concepts and frameworks: Building Blocks to Execution, 17 Traits of Successful Execution, Transformation Program Design, Balanced Scorecard

Learn more Organizational Hurdles and other Strategy Execution frameworks here:http://flevy.com/browse/business-document/guide-to-business-strategy-execution-873

DETAILS





• Balanced Scorecard - https://flevy.com/browse/business-document/balanced-scorecard-134

• Guide to Business Strategy Design - https://flevy.com/browse/business-document/complete-guide-to-business-strategy-design-375

• Formulating a Breakthrough Strategy - https://flevy.com/browse/business-document/formulating-a-breakthrough-strategy-598

4242



Hoshin Kanri

Hoshin Kanri strives to get every employee pulling in the same direction at the same time.

Overview

Balanced

Scorecard

Organizational

Hurdles

Hoshin

Kanri

• Hoshin Kanri (also known as Policy Deployment, Hoshin Planning, or just Hoshin) is a Strategic Planning/Strategic Management Methodology. It is based on a concept popularized in Japan in the late 1950s by Yoji Akao.

• "Each person is the expert in his or her own job, and Japanese TQC (Total Quality Control) is designed to use the collective thinking power of all employees to make their organization the best in its field,“ Yoji Akao. This is the fundamental principle of Hoshin Kanri.

• In other words, this framework ensures that the strategic goals of our company drive progress and action at every level within the organization. This eliminates the waste that comes from inconsistent direction and poor communication.

• This framework is intended to help an organization:

• Focus on a shared goal;

• Communicate that goal to all leaders;

• Involve all leaders in planning to achieve the goal; and

• Hold participants accountable for achieving their part of the plan.

• Hoshin Kanri is falls under the umbrella of Lean Thinking (or called Lean Management, Lean Methodologies). Lean frameworks strive for continuous improvement of the organization.

4343



Hoshin Kanri

More Information

Balanced

Scorecard

Organizational

Hurdles

Hoshin

Kanri

• This framework is explained in more detail in our document Hoshin Kanri Strategy Deployment

• Topics covered include: underlying principles of Hoshin Kanri, PDCA Approach, Hoshin Kanri Tools, Elements of Hoshin Kanri, Management Reviews, and Critical Success Factors

Learn more about Hoshin Kanri here:https://flevy.com/browse/business-document/Hoshin-Kanri-155

DETAILS

• Seller: OEConsulting

• File size: 11.8MB


FLEVY AUTHORS WHO SPECIALIZE IN LEAN / OPERATIONAL EXCELLENCE FRAMEWORKS

• OEConsulting - https://flevy.com/seller/oeconsulting

• Operational Excellence Consulting - https://flevy.com/seller/oec

LEAN / OPERATIONAL EXCELLENCE BUSINESS TOOLKITS

• Lean Management / Enterprise - https://flevy.com/business-toolkit/lean-management-enterprise-lean

• Six Sigma - https://flevy.com/business-toolkit/six-sigma-project-6s

4444



Contents

Overview



Summary

Appendix

4545



In this primer, we introduced 12 different business frameworks related to Strategy Development and Execution

Summary


Blue Ocean Strategy

Marketing Mix(4/7 P’s)


SWOT Analysis Product Lifecycle


PEST AnalysisConsumer Adoption

Curve

1

2

3

4

5

6

7

8

9

BalancedScorecard


Hoshin Kanri

10

11

12

STRATEGY DEVELOPMENT STRATEGY EXECUTION

In this document, we provided high level overviews of 12 different frameworks related to Strategy Development and

Strategy Execution. These are the same tools and analyses performed by top tier consulting firms, although only a

small sample of the wide array of frameworks and tools available. You can find countless more frameworks available at

Flevy (http://flevy.com).

Using and applying these frameworks is an art. Depending on your specific business situation, the usage and

applications of these frameworks will change significantly.

To learn more about any of these topics, we advise you take a look at the recommended documents referenced

throughout this presentation. We have also included additional recommended documents in the following slides.

4646



Here is a list of business frameworks and methodologies that have NOT been referenced earlier in this document

Additional Frameworks – Strategy Development

STRATEGY DESIGN & DEVELOPMENT

• Strategy Development Methodology - https://flevy.com/browse/strategy-marketing-and-sales/strategy-development-methodology-264

• Strategy Development (PLAN Framework) - https://flevy.com/browse/business-document/plan-for-performance-methodology-746

• Evolution of Strategy - https://flevy.com/browse/strategy-marketing-and-sales/evolution-of-strategy-705

• Success Is System, Failure Is Component - https://flevy.com/browse/business-document/success-is-system-failure-is-component-302

• Core Competencies Analysis - https://flevy.com/browse/strategy-marketing-and-sales/core-competencies-analysis-75

• Customer Segmentation - https://flevy.com/browse/business-document/customer-segmentation-700

• Competitive Analysis - https://flevy.com/browse/business-document/competitive-analysis-689

• Profit Pools Framework - https://flevy.com/browse/business-document/profit-pools-concept-744

• Value Creation Framework - https://flevy.com/browse/business-document/value-creation-framework-745

• Services Growth Strategy - https://flevy.com/browse/business-document/services-growth-and-effectiveness-strategy-735

• Competitive Assessment - https://flevy.com/browse/business-document/guide-to-competitive-assessment-760

• Industry Analysis - https://flevy.com/browse/business-document/industry-analysis-773

• Market Entry Strategy - https://flevy.com/browse/business-document/market-entry-strategy-776

• Shareholder Value Analysis - https://flevy.com/browse/business-document/shareholder-value-analysis-734

• Market Modeling and Sizing - https://flevy.com/browse/business-document/building-a-market-model-and-market-sizing-376

• Business Case Development - https://flevy.com/browse/business-document/business-case-development-framework-199

• Cost Drivers Analysis - https://flevy.com/browse/business-document/cost-drivers-analysis-76

4747



Additional Frameworks – Strategy Execution

STRATEGY EXECUTION & DEPLOYMENT

• Strategy Planning & Deployment Training - https://flevy.com/browse/strategy-marketing-and-sales/opex-strategy-planning-and-deployment-training-module-597

• McKinsey 7-S Model - https://flevy.com/browse/strategy-marketing-and-sales/mckinsey-7-s-strategy-model-197

• Corporate Performance Measurement - https://flevy.com/browse/business-document/corporate-performance-measurement-696

• Change Management Methodology - https://flevy.com/browse/business-document/change-management-methodology-241

• Benchmarking for Performance - https://flevy.com/browse/business-document/benchmarking-for-world-class-performance-156

• Scenario Planning - http://flevy.com/browse/business-document/scenario-planning-243

• Value Stream Mapping - https://flevy.com/browse/business-document/opex-value-stream-mapping-training-module-599

• Soft Side of Change Management - https://flevy.com/browse/business-document/soft-side-of-change-management-261

4848



Here are 9 of our featured sellers on Flevy—each seller has an extensive management consulting background and many operate their own firms

Looking for more business frameworks? Check out our 10 must-have frameworks:http://flevy.com/business-frameworks

Recommended Authors/Contributors

TEAM NEOSIhttps://flevy.com/seller/teamneosi

Corporate Communications frameworks from McKinsey specialists with combined 40+ years experience.

LANCE LATHAMhttps://flevy.com/seller/lancelatham

Frameworks related to Operations Management, Process Improvement, and Manufacturing.

PAUL ALLEN SMITHhttps://flevy.com/seller/paulsa

Frameworks related to IT and Risk. E.g., ITIL, PRINCE2, Risk Management.

DOCUMENTS FILEShttps://flevy.com/seller/documentsfiles

Consulting frameworks and documents spanning Strategy, Operations, Finance.

OEChttps://flevy.com/seller/oec

Frameworks focused on delivering Operational Improvement (e.g. 8D Problem Solving, Lean, Six Sigma).

STRATICXhttps://flevy.com/seller/straticx

Frameworks on Corporate and BU Strategy, Business Transformation, M&A, and Operational Improvement.

OE CONSULTINGhttps://flevy.com/seller/oeconsulting

Topics include Lean Management, Quality Management, and Strategic Planning & Deployment.

LEARN PPThttps://flevy.com/seller/learnppt

Business frameworks and toolkits. E.g., Corporate Strategy, Change Management, Operational Improvement.

PPT LABhttps://flevy.com/seller/pptlab

Classic Business Frameworks. E.g., McKinsey 7-S Model, Balanced Scorecard, Christensen's Innovation, etc.

4949



We have assembled a number of Business Toolkits, each focused on a different business project—a small selection has been included below

We are constantly adding new end-to-end Business Toolkits to Flevy:https://flevy.com/business-toolkits

Flevy.com Business Toolkits

• Balanced Scorecard Toolkithttps://flevy.com/business-toolkit/balanced-scorecard-bsc

• Business Case Development Toolkithttps://flevy.com/business-toolkit/business-case-development-bcase

• Change Management Toolkithttps://flevy.com/business-toolkit/change-management-cm

• Performance Management Toolkithttps://flevy.com/business-toolkit/performance-management-perf

• Pricing Strategy Toolkithttps://flevy.com/business-toolkit/pricing-strategy-ps

• Product Launch Toolkithttps://flevy.com/business-toolkit/product-launch-strategy-pls

• Strategic Planning Toolkithttps://flevy.com/business-toolkit/strategic-planning-sp

• Value Chain Analysis Toolkithttps://flevy.com/business-toolkit/value-chain-analysis-vc

We have 40+ Business Toolkits

5050



Contents

Overview



Summary

Appendix

5151



You can download a Strategy Development Discussion deck for free from Flevy.com

PARTIAL PREVIEW

Download a Strategy Development Discussion Deck for Free here:

http://flevy.com/share

DESCRIPTION

• This is a discussion deck template for a corporate strategy development session.

• In this discussion, we go through a 2-prong approach to growth and evaluate the merits of various growth drivers.

• From the 2-prong approach, various scenarios can be generated in the discussions and dashboards are used to evaluate each scenario.

5252



Why is that only 20% of the sales team generate such a disproportionate amount of the sales? What if you were to only hire the “best of the best?”

THE 16 HUMANISTIC ATTRIBUTES + BEHAVIORAL QUADRANT

Download the Fiaccabrino Selection Process Primerfor Free here:

http://flevy.com/fiaccabrino-selection-process

DESCRIPTION

• In most sales organizations, there are 2 crippling truths—1) 80-90% of sales are generated by only 20% of the sales team and 2) turnover is abysmal.

• The Fiaccabrino Selection Process (FSP) is a proven methodology for increasing sales and reducing turnover. It teaches you how to select only the "best of the best" for your organization.

• Whereas the methodology was originally developed for a sales organization, it can easily be modified and tweaked for other functions.

• The core of the framework is to understand 16 critical Humanistic Attributes.

5353



Got business documents?

You can join Flevy.com and sell your business documents

• Flevy presents an effortless way for you to capitalize on your otherwise idle business documents

• You set the prices and retain 70% of each sale

• No sign up fees

• No commitments—upload as many or few documents as you want

• Register here: http://flevy.com/register

• We approve documents every 2-3 days

• Once the document is live on the Flevy marketplace, we will do the marketing and sales

• Questions? Email us at [email protected]

Earn passive income on Flevy by selling your old business documents— register here: http://flevy.com/register

5454



Flevy (www.flevy.com) is the marketplace

for premium documents. These

documents can range from Business

Frameworks to Financial Models to

PowerPoint Templates.

Flevy was founded under the principle that

companies waste a lot of time and money

recreating the same foundational business

documents. Our vision is for Flevy to

become a comprehensive knowledge base

of business documents. All organizations,

from startups to large enterprises, can use

Flevy— whether it's to jumpstart projects, to

find reference or comparison materials, or

just to learn.

Contact Us

Please contact us with any questions you may have about our company.

• General Inquiries [email protected]

• Media/PR [email protected]

• [email protected]

Date post:	22-Nov-2014
Category:	Business
Upload:	flevycom
View:	868 times
Download:	5 times