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1、STRATEGIC PLANNING AND BUDGETING Part 1: Business Model and Strategy Case Study, Concepts and Debatable Ideas Kenny Ong CNI Holdings Berhad,Intro: CNI,20 years old Core Business: MLM Others: Contract Manufacturing, Export/Trading, eCommerce Malaysia, Singapore, Brunei, Indonesia, India, China, Hong
2、Kong, Philippines, Italy, Taiwan, Oman, United States, Vietnam Staff force: 500 Distributors: 200,000 Products: Consumer Goods and Services,History of Strategic Planning and Budgeting,Planning in the “old” days,Budget top down no questions asked Only two budget goals revenue, expenses The only plann
3、ing we needed to do was “do better than last year” Planning was bottom up - compilation of plans within set budget No one knew what the other was planning Accountings role was only to compile budget for approval KPIs were not used Sales was resource priority, everything else not important Assumed no
4、 major changes in market R&D was bottom up,Problems from the start,Problems from the start (1/2),No money Split Objectives: Sales? Share Price? Image? Independent entities Accounts controlling schedule S&M always running over budget Compounding activities BOD expectations too high without proper exp
5、lanation nor justification Lack of Market research Expenses not spent gets punished,Problems from the start (2/2),Budgeting for known, consistent, and predictable business conditions Never learn from past mistakes, usually in under-budgeting (e.g. staff and PCs) Wrong Business Model blame Budgeting
6、& Planning. Having a good planning process cannot correct a bad business model Focusing on the Process (KPIs), instead of “Business” Planning & budgeting treated as separate processes by businesses/functions,Todays Agenda,Summary: Planning & Budgeting,Long-term Plans Objectives Strategies Enablers R
7、esources,Also known as L.O.S.E.R.,Summary: Todays presentation,1. Business Model,2. Strategy,3. Alignment,4. Resources,Assumptions 1: Audience,Business Government Non-profit,Assumptions 2: Starting Point,Wanting to start proper planning & budgeting process, or Wanting to improve planning & budgeting
8、 process,1. Get the right Business Model first,How to fail without trying,1. Wrong Business Model,The Roadmap to Failure Fred Wiersema and Mike Treacy,Performance,Time,Denial and Defense,“Its not really good value our competitor is offering, because it doesnt include a lot of our features.” - ABC vs
9、 Air Asia “Its good value but not in our preferred customer market.” - ABC vs Toyota “Sure theyre hurting us, but with their unfair advantage, what can we do?” ABC vs MILO “The rules we are playing by have always worked before” AMEX vs VISA,The Roadmap to Failure Fred Wiersema and Mike Treacy,Perfor
10、mance,Time,Ad Hoc Tactics,Selectively hold discounts to hold business that has started to go elsewhere Introduce new promotions, terms, conditions, and offers to confuse and cloud the market Beef up customer service by adding people to fix mess-ups and quicken delayed shipments Delay capital investm
11、ents and adjust accounting methods to portray quarterly financial results more favorably Introduce “new and improved” products that are new in form, but not in substantive ways that are of consequence to purchasers Introduce Balanced Scorecards and Performance Management Systems,The Roadmap to Failu
12、re Fred Wiersema and Mike Treacy,Performance,Time,“What is the moral of the story?”,What is the Business Model?,USP,Market Discipline,Profit Model,Intro: Market Discipline,Mamak stall,Intro: Market Discipline,“They are the most innovative“ “Constantly renewing and creative“ “Always on the leading ed
13、ge“,“A great deal!“ Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership “A no-hassles firm“ Convenience and speed Reliable product and service,“Exactly what I need“ Customized products Personalized communications “Theyre very responsive“ Preferential servi
14、ce and flexibility Recommends what I need “Im very loyal to them“ Helps us to be a success,Product Leadership,Operational Excellence,Customer Intimacy,Operational Excellence (low cost producer),Ref: The Discipline of Market Leaders, Michael Treacy 1995,Product Leadership (best product),Customer Inti
15、macy (best total solution),Strategy: Value Disciplines,www.myCNI.com.my,www.OOBEY.com,Operational Excellence Competitive price Error free, reliable Fast (on demand) Simple Responsive Consistent information for all Transactional Once and Done,Customer Intimacy Management by Fact Easy to do business w
16、ith Have it your way (customization) Market segments of one Proactive, flexible Relationship and consultative selling Cross selling,Product Leadership New, state of the art products or services Risk takers Meet volatile customer needs Fast concept-to- counter Never satisfied - obsolete own and competitors products Learning organization,Strategy: Value Disciplines,www.myCNI.com.my,www.OOBEY.com,The McPlaybook*,Make it easy to eat 50% drive-thru Me
