Standard 2000

1
Università di Udine
CORSO DI STRATEGIA DIMPRESA Prof. Cristiana
Compagno
Corso Integrativo Modelli e Tecniche di Business
Plan Alessandro Diana - Accenture
Udine, 8 Aprile 2005

• Sessione 3 Business Plan - parte 3 e 4

2
Agenda
Agenda

• Business Plan parte 3 (analisi interna)
• Marketing strategy
• Business system organization alliances
• Management team
• Timing and development strategy
• Business Plan parte 4
• Valutazioni economiche (business case)
• Executive summary
• Wrap-up e conclusioni

3
Agenda
Agenda

• Business Plan parte 3 (analisi interna)
• Marketing strategy
• Business system organization alliances
• Management team
• Timing and development strategy
• Business Plan parte 4
• Valutazioni economiche (business case)
• Executive summary
• Wrap-up e conclusioni

4
Once the competition landscape is assessed, it is
fundamental to clearly identify and communicate
sources of Competitive Advantages
Marketing Strategy
Sources of Competitive Advantages

• Sources of Competitive advantage must be
  identified
• your product offers greater value (in aspects
  important to cust.) than competitors
• your product is objectively or emotionally
  "better
• you have developed a value proposition or unique
  selling proposition
• This value proposition must anchored firmly in
  the mind of the customer, by means of
  Positioning
• The most important guideline for positioning are
• look at the product from the customer's point of
  view (obj to meet a need better)
• make the advantage to the customer
  clear, memorable, and important to them
• be distinctive from your competitor positioning

5
In identifying competitive advantages it is
possible to refer to some specific frameworks,
such as Porters
Marketing Strategy
Porters Strategies
6
A key element of a well-conceived business
concept are well-planned marketing and sales
activities
Marketing Strategy
Marketing Mix Framework
Product
Promotion
Strategic Guidelines
Marketing Strategy
Mission
Price
Place
Overall Consistency
7
Communication must explain the value of your
product or service, and convince customers that
your product meets their needs better than
competing solutions
Marketing Strategy
Promotion Strategy key concepts
Communication Channels
Communication Objectives
Impact on Audience

• Classic advertising newspapers, magazines, trade
  journals, radio, TV, movie
• Direct marketing direct mail to select
  customers, telephone marketing, Internet
• Public relations articles in print media about
  your product, business or you, written by you or
  a journalist
• Exhibitions, trade fairs
• Customer visits

• Attract attention
• Inform
• Persuade
• Inspire confidence

• Awareness
• Knowledge
• Liking
• Preference
• Convinction
• Purchasing

8
The price you can ask depends on how much the
value of your product is worth to the customer
and his willingness to pay, and on the preferred
entry strategy
Marketing Strategy
Pricing Strategy two options

• A new product is positioned as "better" than
  previous options, so a higher price can be
  justified
• Higher prices generally lead to higher profit
  margins, and allow the new company to finance its
  own growth
• Investors usually prefer to avoid the high
  initial investment required by the penetration
  strategy (due to the need to supply to meet the
  high demand)

Skimming Strategy
Price Premium

• Setting a new standard (Netscape Internet vs
  Macintosh)
• High fixed costs. Businesses with high fixed
  costs are forced to find a wide audience as
  quickly as possible
• Competition. If the entry barriers are low and
  tough competition likely, a penetration strategy
  is the best way to be faster in capturing a large
  market share (but, is it appropriate for a
  startup?)

Penetration Strategy
Low Price
9
The NewCo will have to consider whether to handle
distribution itself, or whether a specialized
operation will handle it. This "make-or-buy"
decision will have impacts on the business system
Marketing Strategy
Distribution Channels some examples
Third-party retailers Outside agents Franchising
Wholesaler
Stores Own Sales Staff Direct Mail Call
Center Internet
10
It might be useful to refer to some key questions
to acid test the completeness of the section
Marketing Strategy
Key Questions

• In which partial market segments will you make
  your market entry?
• Which target groups will you reach by what means
  of distribution?
• What is your pricing strategy? (penetrate the
  market quickly with a low price, or bring in the
  highest return from the start?)
• What final sale price do you want to charge
  (estimated)? How high is the profit margin?
• What sales volumes and sales revenues are you
  aiming for (estimated)?
• How will you draw the attention of your target
  groups to your product or service?
• How much, in time and resources, will it cost to
  acquire a customer?
• Which advertising materials will you use to do
  so?
• How difficult will it be and/or what will it cost
  to create long-lasting customer loyalty?
• Describe the typical process of selling your
  product/service. Who ultimately makes the
  purchasing decision?

11
Agenda
Agenda

• Business Plan parte 3 (analisi interna)
• Marketing strategy
• Business system organization alliances
• Management team
• Timing and development strategy
• Business Plan parte 4
• Valutazioni economiche (business case)
• Executive summary
• Wrap-up e conclusioni

12
The goal of this section is to describe the
company system, capabilities and resources
Business System organization and alliances
- Porter Value Chain -
Infrastructure activities, Planning, Finance,
MIS, Legal
Support Activities
Technology, Research, Development, Design
Human Resource Management Development
Primary Activities
Inbound Logistics
Production
Outbound Logistics
Sales and Marketing
Dealer Support Customer Service
Source Michael Porter, Competitive Advantage,
1985
13
Each of the resources and capabilities can be
broken down and analysed in further detail as
required
Business System organization and alliances
ONtrucks Used Car Biz process model
Sales transaction
Negotiation
Demand / Supply matching
Pre-negotiation
After-sales
Customer Relationship Management
14
All processes can be exploded in single
activities that are carried out by the involved
players
Business System organization and alliances
ONtrucks Used Car Biz process model
Sales transaction
Negotiation
Dem./Supp. match
Pre-negotiation
After-sales
Inventory listing
Further info (from Seller)
Bids analysis and counteroffer
Seller
Vehicle prep.
Receive payment
Proactive search
Negotiation
Mkt. place
ok
ok
Payment
Buyer awareness acquisition
Bidding
Buyer
Inventory search
Vehicle delivery
ok
Wanted posting
Financial Insurance services
Administr. services
Logistics services
Vehicle Recond.ing, Certific.
Escrow services
Fleet mgmt. services
Vehicle Inspection
Service Provider
Auction services
Warranty, MR, Roadside services
Customer Relationship Management 1-to-1
Marketing Customer Support Contact Center
15
The possibility to outsource some of the company
processes can be evaluated through a Make or Buy
analysis
Business System organization and alliances
- Make or Buy Analysis -
STRATEGIC IMPORTANCE
High
Low
MAKE
MAKE or BUY
High
COMPANY CAPABILITY
BUY
MAKE or BUY
Low
16
It might be useful to refer to some key questions
to acid test the completeness of the section
Business System organization and alliances
Key Questions

• What does the business system for your
  product/service look like?
• What business functions make up your
  organization, and how is it structured?
• What resources do you need (quantitative and
  qualitative) to create your product/service?
• What will you make, what will you buy?
• Which partners will you work with? What are the
  advantages of working together for you and your
  partners?

17
Agenda
Agenda

• Business Plan parte 3 (analisi interna)
• Marketing strategy
• Business system organization alliances
• Management team
• Timing and development strategy
• Business Plan parte 4
• Valutazioni economiche (business case)
• Executive summary
• Wrap-up e conclusioni

18
Company XXX organization can start with 15
people and grow to 60 for full operations in 2005
Management Team
Chief Executive Officer
Chief Operating Officer
Chief Financial and Administrative Officer
Chief Technology Officer
Chief Marketing Officer
15
5
20
20
Sales Business devt
HR/ Payroll/ support
Back Office Systems
Alliance mgmt development
Finance Controlling
Marketing
Content management
Web site infrastructure
Investors relations IPO
Web site Tech devt
Site development
Analysis Web watching
Overall connectivity
Call center CS
Communic. Image
19
A sound and experienced team is often a key lever
to convince investors about the value of the
initiative
Management Team
What professional investors look for

• Has the team already worked together?
• Do team members have relevant experience?
• Do the founders know their weaknesses and are
  they willing to make up for them?
• Have the founders agreed on their future roles,
  are ownership issues settled?
• Has the management team agreed to a common goal,
  or are there underlying differences of opinion?
• Are the individual team members fully behind the
  project?

20
It might be useful to refer to some key questions
to acid test the completeness of the section
Management Team
Key Questions

• Who are the members of your management team and
  what distinguishes them education, professional
  experience, success, standing in the business
  world?
• What experience or abilities does the team
  possess that will be useful for implementing your
  concept and setting up your company?
• What experience or abilities are lacking? How
  will the gaps be closed? By whom?
• What targets are the team members pursuing by
  starting up the business? How high is the
  motivation of the individual team members?

21
Agenda
Agenda

• Business Plan parte 3 (analisi interna)
• Marketing strategy
• Business system organization alliances
• Management team
• Timing and development strategy
• Business Plan parte 4
• Valutazioni economiche (business case)
• Executive summary
• Wrap-up e conclusioni

22
ONTruck Example international reach builds
upon strong, national sites with common
philosophy, brand image, partnerships
Timing and Development Strategy
International rollout program
2006
2002
2001
2000
Italy France/Belgium/ Switzerland Spain
/Portugal Germany/ Austria Other Eu
continental UK
Second release
First release
Third release
Final release
Second release
First release
Third release
Final release
Second release
First release
Third release
Final released
ONtruck Holding
Second release
First release
Third release
Final release
Second release
First release
Final release
9.650
26.550
177.400
Unique visitors
561.400
23
A release plan should be developed by the
priority matrix that analyze the offer through
two variables the value for the NewCo and the
implementation easiness
Timing and Development Strategy
Products and services priority matrix example
High
Priority
Implementation Easiness
Range A

• Time
• Costs
• Solution availability

Range B
Range C
Low
Value for Company XXX"
Low
High

• Direct revenues
• Traffic and indirect revenues
• Strategic relevance for Portal

24
ONTruck Example the matrix has allowed to
define the release in which every product and
service will be available for the customer
Timing and Development Strategy
Products and services priority matrix
Implementation priority

• Release 1
• Fuel Cards
• Site Package
• Lubricants

High
Extended warranty

• Release 2
• Used truck
• Freight exchange
• Operation info (MR)
• Fleet management

Fleet Management
Fuel Cards
Books Magazine
Paperwork services
Site Package
Used Trucks
Operational info
Implemen- tation Easiness

• Release 3
• Spare parts
• Tyres
• Insurance Truck
• Financing truck
• Books Magazine
• Extended warranty

Tyres
Truck Insurance
Freight Exchange
Spare parts
Merchandising
Videogames
Financing Truck
MusicVideo
Electronic instruments

• Release 4
• Videogames /SW
• MusicVideo
• Electronic instruments
• Insurance LifeHealth
• Financing Home/Personnel

Low
Low
High
Value for NewCo
Release 1
Release 2
Release 3
Release 4
25
Agenda
Agenda

• Business Plan parte 3 (analisi interna)
• Marketing strategy
• Business system organization alliances
• Management team
• Timing and development strategy
• Business Plan parte 4
• Valutazioni economiche (business case)
• Executive summary
• Wrap-up e conclusioni

26
Il Business Case è il principale strumento di
valutazione quantitativa delle Iniziative
Strategiche
Valutazioni economiche
Definizione
Obiettivi

• Il Business Case è un modello di calcolo in cui
  vengono riportate le previsioni economiche e
  finanziarie relative alla realizzazione delle
  Iniziative Strategiche pianificate
• Il Business Case costituisce il caso base sul
  quale vengono successivamente effettuate
  simulazioni aggiuntive, modificando
  opportunamente le variabili chiave nel foglio di
  input (analisi di sensitività)

• Dimostrare la sostenibilità economica e
  finanziaria delle iniziative strategiche
  pianificate dallazienda
• Evidenziare le relazioni esistenti tra le varie
  iniziative strategiche pianificate e verificare
  il relativo grado di compatibilità (es. evitare
  soluzioni conflittuali)
• Ottimizzare lallocazione delle risorse a
  disposizione per raggiungere il massimo risultato
  nellorizzonte temporale predefinito

27
La formulazione del Business Case è un processo
iterativo, tipicamente articolato in 4 fasi
Valutazioni economiche
Business Case Process
Develop Business Logic Collect Data
Build Spreadsheet
Perform Sensitivity Analysis

• Design workbook
• Enter data and documentation
• Check data and formulas

• Develop Business logic
• Structure analysis and define key metrics
• Conduct research
• Normalize data and document assumptions

• Identify key sensitivities
• Alter variables within reasonable range
• Establish best/ worst and most likely cases

28
Nella prima fase vengono definite le fonti di
ricavo e costo nonché raccolti i dati necessari
Valutazioni economiche
Data Collection

• Commissions on sale of own/others products
• Referral fees
• Transaction processing fees

Transactions
Sources of Revenue

• Value-added content subscriptions
• Services
• Advice
• Customer profiling
• Alerts
• Value-added network (ISP)
• Other premium services

Fees
Sponsorships

• Advertising
• Slotting fees
• Preferred provider certification

• Sale of aggregated user information that does not
  compromise customer privacy

Other
29
(segue)
Valutazioni economiche
Data Collection
Marketing and Sales

• Subscriber/merchant acquisition
• Promotional branding
• Relationship management

Product/ Service Development

• Content, tools,application
• Aggregation

Sources of Expenses

• Hardware
• Software
• Hosting
• Integration

TechnologyInfrastructure
Customer Care

• Technical support
• Customer support
• Billing

• Salaries
• Occupancy
• Equipment
• Other

GA
30
Nella fase successiva i dati vengono raccolti e
inseriti negli spreadsheet del business case, con
una logica a cascata
Valutazioni economiche
Flusso dei dati
2. Modelli di calcolo
1. Assunzioni di Base

• Variabili esogene
• Variabili di ricavo
• Variabili di costo

• Modello dei ricavi
• Modello dei costi
• Piano Investimenti
• Modello del CCN

3. Quadri di Sintesi

• Conto Economico
• Flussi di Cassa

31
I valori calcolati vengono infine riportati in un
Conto Economico di sintesi
Valutazioni economiche
Quadro di Sintesi Conto Economico
32
Tipicamente, nei Business Plan di Start Up si
utilizza una vista per Flussi di Cassa
Valutazioni economiche
Quadro di Sintesi Flussi di cassa
33
Lanalisi di sensitività permette di creare
scenari alternativi in cui le variabili chiave
assumono valori modificati rispetto allo scenario
base
Valutazioni economiche
Sensitivity Analysis

• Lanalisi di sensitività ha scopo di evidenziare
  limpatto della variazione delle variabili chiave
  sui principali indicatori economici e finanziari
  contenuti nel Business Case
• Permette di identificare e simulare scenari di
  business alternativi, non limitando lanalisi ad
  ununica configurazione di base
• Risulta particolarmente utile nei casi in cui vi
  sia un elevato grado dincertezza nella
  valutazione delle iniziative strategiche

34
Lanalisi di sensitività viene effettuata creando
scenari alternativi rispetto a quello base
Valutazioni economiche
Two-Scenario Sensitivity Analysis

• Unanalisi di sensitività minima prevede la
  costruzione di due scenari aggiuntivi rispetto a
  quello base (scenario migliorativo e scenario
  peggiorativo)
• Tecnicamente si effettuano delle modifiche in
  termini percentuali sulle variabili chiave delle
  assunzioni di base del Business Case base

Variabile A Variabile B Variabile C
Scenari
caso migliorativo
10 5 20
caso di base
X Y Z
caso peggiorativo
-10 -5 -20
35
ONTruck Example positive free cash flows from
year 3 and regime free cash flow level of more
than 8 million in 2005 will be generated
Valutazioni economiche
Free Cash Flow estimates (/000)
2001
2002
2003
2004
2005
2006

4Q 2000
94
2.173
8.747
16.122
24.374
31.392
37.445

• Total Revenues

• Outflow

5.203
4.199
9.333
12.358
16.606
21.616
25.433

• Corporation tax

-


-
45
271
3.373
7.145
8.737

• Marketing expenses

1.157
1.924
5.248
6.449
6.093
6.278
7.489

• Web site content

293
290
1.140
1.956
2.888
3.606
4.295

• Technology/Connectivity expenses

62
429
422
431
382
391
393
297
1.414
2.273
3.010
3.583
3.885
4.184

• Personnel

59
141
205
241
287
311
335

• General administrative

3.335

• Start-up costs

• Free Cash flow

-5.108
-2.026
-586
3.764
7.768
9.776
12.013
Business Case and Partnering, Company
incorporation, Start-up management, Web site
development, Equipment Technology, Facilities
36
ONTruck Example the company can cover negative
cash flows with initial funding of 5 million .
Payback period is estimated in 4 years
Valutazioni economiche
Free Cash Flow and payback period (/000)
Three months
37
ONTruck Example sensitivity analysis combining
Unique Visitors and Freight Exchange market share
variation (/-25) generates positive DCF results
also in the pessimistic hypothesis
Valutazioni economiche
Sensitivity to Unique Visitors
Sensitivity to Freight Ex. MKT share
Base
Hypothesis
Base
Hypothesis
-25
100
25
-25
25
100
Unique visitors
F.E. clients
92.560
69.420
115.699
1.926.207
1.444.656
2.407.759
Revenues
Revenues
83.844.646
104.167.024
124.489.402
97.992.119
110.341.929
104.167.024
Free Cash Flow
Free Cash Flow
14.199.079
19.071.573
23.873.750
16.489.430
21.653.716
19.071.573
Combined hypothesis
Base
Pessimistic
Optimistic
100
-25 -25
25 25
Revenues
82.607.656
104.167.024
126.551.052
Free Cash Flow
19.071.573
13.571.909
24.735.509
16.430.753
11.595.896
Discounted Free Cash Flow (i20)
21.430.530
6 cumulated years
38
Agenda
Agenda

• Business Plan parte 3 (analisi interna)
• Marketing strategy
• Business system organization alliances
• Management team
• Timing and development strategy
• Business Plan parte 4
• Valutazioni economiche (business case)
• Executive summary
• Wrap-up e conclusioni

39
LExecutive Summary è la sezione del Business
Plan che riassume i risultati di ciascuna delle
fasi del processo di Pianificazione Strategica
Executive Summary
Obiettivi dellExecutive Summary

• Raccogliere le principali risultanze di ciascuna
  fase del processo di Pianificazione Strategica
• analisi contesto interno (azienda)
• analisi contesto esterno (mercato e concorrenza)
• definizione della strategia
• valutazione delle iniziative strategiche
• Fornire un supporto formale per presentare, in
  formato sintetico, facilmente comprensibile e
  velocemente consultabile, la strategia aziendale
  nel medio-lungo termine
• Fornire alla Proprietà ed al Management le linee
  guida e le raccomandazioni necessarie per la
  realizzazione delle iniziative strategiche
  pianificate

40
LExecutive Summary deve essere redatto in
maniera sintetica e deve contenere i messaggi più
salienti in relazione a ciascuna fase del processo
Executive Summary
Requisiti dellExecutive Summary

• Il documento, che non deve superare le 3-4
  pagine, deve fornire una panoramica generale
  degli argomenti trattati nelle fasi del processo
  di pianificazione strategica
• I contenuti devono essere organizzati in modo
  speculare alle sezioni del Business Plan
• I contenuti devono in generale riguardare i temi
  dellofferta di prodotto/servizio, del
  posizionamento sul mercato, degli obiettivi
  strategici identificati e delle principali
  iniziative strategiche atte a conseguirli
• Il documento deve presentare evidenza dei
  principali risultati economico-finanziari
  derivanti dallutilizzo del Business Case

Sintesi Struttura Esaustività Sostenibilit
à
41
Agenda
Agenda

• Business Plan parte 3 (analisi interna)
• Marketing strategy
• Business system organization alliances
• Management team
• Timing and development strategy
• Business Plan parte 4
• Valutazioni economiche (business case)
• Executive summary
• Wrap-up e conclusioni

42
a final note on Business Plans
Le caratteristiche di un successful business
plan

• Chiarezza (wording appropriato, stile omogeneo,
  no overflow di informazioni, )
• Strutturazione dei concetti (agenda chiara,
  sequenza degli argomenti logica, )
• Completezza (analisi e descrizione di tutte gli
  aspetti, elementi, aree coinvolte)
• Coerenza (filo logico identificabile, no
  contraddizioni, )
• Obiettività (no a overselling, né ad eccessive
  autocritiche )