SESSION 6: THINKING STRATEGICALLY

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SESSION 6 THINKING STRATEGICALLY

• BUSINESS PLANNING FOR SMALL BUSINESSES
• COURSE
• APRIL 2-4, 2007

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SESSION OBJECTIVE

• Outline techniques for assessing your company and
  outline basic strategies

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HOW DOES YOUR COMPANY MEASURE UP?

• What are the Companies Strengths, Weaknesses?
• What opportunities are there to expand?
• What threatens your business?
• How Will You Compete?
• How Will You Make Money?
• Do You have a Strategy?
• Growth/Expansion/Exit

Source Tiffany/Peterson, Business Plans For
Dummies
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Company Strengths and Weaknesses Survey
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Company Strengths and Weaknesses Survey
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COMPANY STRENGTHS AND WEAKNESSES GRID
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COMPANY STRENGTHS AND WEAKNESSES GRID
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OPPORTUNITIES AND THREATS
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OPPORTUNITIES AND THREATS
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ASSESSING OPPORTUNITIES AND THREATS

• Look at External Forces that can impact/shape
  your company
• New competitors
• Unique technologies
• Population shifts
• Changes in taste
• Political and regulatory changes
• Fashion and Fads

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SWOT ANALYSIS GRID
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SWOT ANALYSIS GRID
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Whats Your Business Model?

• Or How are You Going to Make Money?
• Underlying Questions
• Whos your target customer?
• What customer problems or challenges do you
  solve?
• What value do you deliver?
• How will you reach, acquire and retain customers?
• How will you define and differentiate your
  products/services?
• How will you generate revenue?
• Whats your cost structure?
• Whats your profit margin?

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BUSINESS MODEL TYPES

• Simplest Model Create product/service and sell
  directly to customers
• Other Models
• Sell wholesale to retailers,
• selling through distributors
• Licensing products to other companies
• Selling on-line
• Selling through auctions
• Combination of business models

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QUICK FINANCIAL PROJECTION WORKSHEET
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QUICK FINANCIAL PROJECTION WORKSHEET
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OTHER FINANCIAL CONSIDERATIONS

• How do your customers pay?
• Lump-sum cash payment
• Spread purchase price over extended period
• Buy/rent/lease
• Use financing
• Pay as you go or prepay
• Are there other potential revenue sources?
• After sales service
• Are there alternate payment plans?

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BUSINESS MODEL QUESTIONNAIRE
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GROWING THE BUSINESS How Do You Do It?

• Find More Customers to buy Existing
  Products/services
• Advertizing to bring in additional customers
• Encouraging good customers to buy more often
• Finding new uses (and customers) for your
  offerings
• Provide Existing Customers with New and Different
  Products/Services
• Make changes to your existing product lines based
  on customer feedback
• Package products/services in useful and unique
  combinations
• Develop related products and services
• Approach New Customers with Completely New
  Products
• Use current capabilities to develop new
  products/services
• Leverage company assets and marketing
  capabilities to win brand new customers

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RESOURCES FOR GROWTH CHECKLIST
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PLANNING FOR GROWTH QUESTIONNAIRE
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EXITING THE BUSINESS

• Why did I go into business?
• How long do I plan to stay?
• What do I want when I finish?

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CHECKLIST OF COMMON EXIT STRATEGIES
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ALL COMPANIES ARE UNIQUE BUT THEN AGAIN SO ARE
SNOWFLAKES

• Three Basic Generic Strategies
• Cut costs to the bone be low cost leader
• Offer something unique
• Focus on one customer group
• Generic Strategies can provide off-the-shelf
  answers on how to be successful in business over
  a long period

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GENETIC STRATEGIES AT A GLANCE

• Low Cost
• No Frills Product
• Experience Curve
• Low-cost culture

• Differentiation
• Product Features
• Product Quality
• Product Packaging

• Focus
• Niche Markets
• Target Products
• Limited Territories

Your Strategy
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COMPARING STRATEGIES
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TAILOR YOUR OWN STRATEGY

• Dont expect to get it right immediately
• Do your homework
• Have a clear set of goals and objectives
• Check assumptions are they realistic?
• Build Flexibility and have an alternate
• Know your customers
• Know your competitors
• Leverage Strengths, Minimize Weaknesses
• Emphasize core competences to sustain competitive
  advantage
• Make your strategy clear, concise, consistent and
  attainable
• Promote the strategy inside your company