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Planning Checklist

Any business planning, and business development in particular, needs to fit into the overall context of business competitiveness.  Here is a brief checklist of the major issues more or less organised into a hierarchy of how strategy can be developed from a high level view through to more tactical issues.  Activities throughout the organisation need to contribute to the overall corporate objectives from two perspectives:  
  • either, to help develop them - the analytical techniques we use to understand the dynamics of the business and its markets (actual and potential) and the planning systems to decide how to prioritise and initiate actions
  • or, to help implement them - the budgeting, projects, marketing, action plans and personal objective programmes needed to achieve the plans.
Clients may approach their needs from any or several of these perspectives - in other words, the starting point may vary and may lead through any combination of analytical and planning techniques. Our research capability in MPG International is frequently used to obtain information that is just not available from elsewhere to determine market dynamics to drive market models or brand characteristics that can determine how a company may compete. Additional analyses of the capabilities of the company may reveal performance constraints or suggest opportunities, and research may be required to test these. See a discussion of many of these issues under "Research is for ...".


When planning changes which may have an impact on either costs or revenues a basis for evaluation is required.  Ultimately this will be shareholder value, but for practical purposes will usually be defined in terms of profits growth, margin, ROCE (risk adjusted if necessary) and gearing and NOT the size of the business.  Are we clear what is being expected?  Any corporate objectives should reflect those aims.


When we subject ourselves to peer group review (by each type of business in the organisation) can we see that the most outstanding performers are consistently achieving results which would exceed (or at least meet) our financial objectives?  If so, can we see how they are doing this?  If not, however much we work at this business we will not get to where we want to be.


For each type of business the potential for earning superior returns can be a function of certain market characteristics - customer/supplier power, new entrants, indirect competition, etc., that is, apart fom how existing players compete.  Do our markets have the right characteristics?


It is not usually possible to mix competitive strategies - either we position ourselves as a low-cost player, differentiate ourselves in some way or focus on particular market segments.  Are we clear which we are doing in which markets? 


In many examples of business process (re-)engineering, it has not first been clearly defined how it is intended to contribute to our ability to compete - the focus has been on the operational issues, ignoring the nature of differing value chains for different competitive strategies.  With the current emphasis on systems solutions, this has not necessarily taken proper account of capital productivity - are we replacing labour with capital, and thereby losing skills?  Are we using accounting procedures instead of investment appraisal techniques to evaluate these projects?


There will be no clear-cut answers to any questions without breaking down what we do into smaller elements - probably by several criteria - geography, customer type, distribution channels, delivery mechanisms, etc. - whatever is appropriate or measureable.  Further segmentation will probably be required when considering detailed marketing plans.


Markets are dynamic - in the sense that they are constantly changing.  We need to be able to describe it in terms of - which customer are buying or could by which products?  There will be overlap, because there is substitutability between products and new products are being developed all the time.  We probably need to define this in terms of customers’ fundamental requirements, rather than products as they stand today.


Recognising dynamics in the market structure needs to be explained in terms of why customers cross the boundaries - why do they stop buying one product and buy another or change supplier?  What causes market shares to change?  We need to understand buyer behaviour here.


These are fundamental marketing issues - do we have the right combination of product features at an appropriate price to optimise our earnings from our target market segments on the basis of how we have decided to compete?  Research techniques, such as conjoint (trade-off) analysis can provide useful evidence here.


Are we analysing everything we can learn about our operations, products and customers from our corporate "knowledge"?  Are we analysing profitability by products/market segment?  Data mining has delivered analysis tools to the end user (typically based on multi-dimensional frequency tables), whereas, there are actually a whole array of useful statistical procedures such as CHAID or neural networks.


Do we understand how the customer perceives the product features and how he values them?  Are we selling on benefits of the product as opposed to facts about the products?  Are our sales people fully trained in this?  Are we targetting the most likely customers?  Are we concentrating on the most profitable products?  Do we have a clear sales message which is used consistently by sales and marketing?


Do customers know what they can buy from us and why they should do so?  In terms of a marketing concept - the "customer decision continuum" - knowledge is built up gradually from awareness of the organisation, through ever more detailed understanding of the products and the benefits, through to buying and post-purchase evaluation.  Can we position customers on this line and use it to determine what messages we should be sending to whom?  Can we then determine how best to send the message?


Do we know what is going on in the market place?  Are our conclusions being fed back into our planning systems so that we can constantly take account of changes and opportunities?  Do we have a planning system that allows people time to consider shifts in emphasis, tactics and changes to our strategy?  Are we communicating this around the organisation?  Are we leveraging our technology here to achieve this?

In many ways, a strategic review is intended to map just where an organisation sits in relation to these issues - to identify the gaps in our understanding and areas where our knowledge can contribute to corporate performance. And then to take action to achieve the objectives.

Such issues are closely inter-related and need to be considered in the context of the organisation and its ambitions.  Contact us to discuss any of these areas.