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1、Writing a Best-Practice Business Plan: A BlueprintThis presentation contains detailed notes to the slides. If you are viewing the downloaded version, please click on “Notes Page” in the View menu to see both slides and commentary511064 Copyright 2001 McKinsey & Company. Confidential. Not for further
2、 reproduction or distribution.McKinsey & Company1AGENDAKey questions for writing a business planSample business plan2KEY QUESTIONS FOR A BUSINESS PLANSource: McKinseyExecutive summaryWhat is the basic business idea, target customer segments, and own value proposition?What are realistic sales targets
3、, market shares, and growth rates?What does the organizational business look like and who will lead the business?Market/competitor analysis and own positioningWhich market segments are profitable and growing?What are the key success factors?Who are current and future competitors?What is your positio
4、ning compared with key competitors?Product and customer value propositionWhat services are offered at what prices?What partnerships/cooperations are needed?Where does the value to the customer lie?How can advertising and promotions support the customer value?Key questions3KEY QUESTIONS FOR A BUSINES
5、S PLAN (CONT.)Source: McKinseyExecutive summaryWhat is the basic business idea, target customer segments, and own value proposition?What are realistic sales targets, market shares, and growth rates?What does the organizational business look like and who will lead the business?Market/competitor analy
6、sis and own positioningWhich market segments are profitable and growing?What are the key success factors?Who are current and future competitors?What is your positioning compared with key competitors?Product and customer value propositionWhat services are offered at what prices?What partnerships/coop
7、erations are needed?Where does the value to the customer lie?How can advertising and promotions support the customer value?Key questions4KEY QUESTIONS FOR A BUSINESS PLAN (CONT.)Source: McKinseyBusiness-model organization and processesWhat is the future network structure?What organization and resour
8、ces are needed?What are the core business processes? Management teamFinancial planning and RONA analysisKey questionsOpportunities and risksImplementation road mapWhich people manage the future business?How can top-caliber people be attracted and retained?What is the future management style of the o
9、perations?What other opportunities can be leveraged?What risks are involved with the market entry and how can they be controlled?What are the expected financial results over the next five years?What are the key milestones in building the new business?5AGENDAKey questions for writing a business planS
10、ample business planSample Business PlanMarch 2001Sample Business Plan for Fast Fenners Copyright 2001 McKinsey & Company. Confidential. Not for further reproduction or distribution.EUROPEAN FOARS COMPANY7CONTENT EFC BUSINESS PLANExecutive summaryMarket/competitor analysis and EFC positioningProduct
11、and customer value propositionBusiness model, organization, and processesManagement teamOpportunities and risksFinancial planning and RONA analysisImplementation road map123456788EXECUTIVE SUMMARYSource: McKinseyThe market for fenners has grown at a rapid rate since their introduction in 1985. Indus
12、try revenues have grown from 500 million in 1985 to 7,000 million in 2000. Consumers have shown almost insatiable demand for fenners and have consistently thrown away their old fenners for new versions, as product features have been upgraded. This demand, combined with other forces at work in the in
13、dustry, make fenners a very attractive business opportunity. Average industry profit margin has held firm at 15%European Foars Company (EFC) is the nations leading foar manufacturer. It has become the industry benchmark for low-cost production processes and has established a strong brand name, with
14、EFC having become a household word. It has also established strong customer relationships with the nations largest retail outletsIn recent years, market demand for fenners has flattened. In response, EFC began to investigate the fenner market as a source of new profits to maintain its historical rat
15、e of return to shareholders. After several years of R&D, EFCs engineers have developed and patented the next generation of fenners known as fast fenners, with features far surpassing existing fenners. This business plan lays out EFCs strategy for entry into the fenner market with fast fennersEFC wil
16、l begin selling fast fenners through the leading national retail outlets beginning in July 2001. Prior to this time, it will market the fast fenner aggressively to consumers, highlighting its improved features and EFCs commitment to 24-hour customer service at the same price as existing fenners. By
17、offering consumers the fenner improvements and service that they need at an economical price, EFC should be able to capture 62% of the market by the year 2005. EFC can realize up to 1,130 million in annual profit by 2005 from successful implementation of the fast fenner business plan19EXECUTIVE SUMM
18、ARY KEY ISSUESSource: McKinseyThe key issues in the business plan are:Pricing: EFC is the low-cost producer of fenners. This business plan assumes that EFC will be able to replicate this low-cost production concept. Therefore, it proposes offering fast fennersat the same cost as existing fenners. EF
19、C expects even value-conscious consumers to buy the new fast fenners, thereby only driving market growth but and gaining share Competitive response: EFC has patented the fast fenner and believes that it will be extremely difficult for competitors to replicate. This business plan also assumes that co
20、mpetitors willnot attempt to maintain market share through price slashing or that any attempts to do so will be unsuccessfulDistribution channel: This business plan recommends that EFCleverage its strong relationships with the nations largest retail outlets and sell fast fenners through them. The si
21、milarity of fenners to foars suggests that consumers will be willing to purchase fast fenners at retail outlets110CONTENT EFC BUSINESS PLANExecutive summaryMarket/competitor analysis and EFC positioningProduct and customer value propositionBusiness model, organization, and processesManagement teamOp
22、portunities and risksFinancial planning and RONA analysisImplementation road map12345678115002,0004,0007,00011,0001985SIZE OF FENNER MARKET millions21990199520002005(E)* Compound average growth rateSource: McKinseyCAGR 1985-2005 = 16.7%1215121416151985AVERAGE INDUSTRY ROS OF FENNER MARKET%1990199520
23、002005(E)Source: McKinsey213FENNER DISTRIBUTION CHANNELS, MAT* 1999%* Moving annual totalSource: McKinsey553015Retail outletsCatalogsSuperstoresCurrently no fenners are sold online, but experience from foars (15% online sales and growing rapidly ) indicates future online sales potential214DEVELOPMEN
24、T OF MARKET SHARE OF IMPROVED FENNERSSource: McKinsey%10000Basic fennerImproved fennerEven better fenner1990199520002080001090Fast fenner215% of population currently owning fennersLikeMARKET RESEARCH FINDINGS POTENTIAL CUSTOMER NEEDS%* Quotations from customer interviewsSource: McKinsey% of populati
25、on liking their fennersDont likeIndifferentPotential needs of fenner users*Wish my fenner could Wish it had more Need help getting my fenner to Wish I could buy more fenners within my budget .7520528515OwnDont own16MARKET RESEARCH FINDINGS IMPROVEMENT OPPORTUNITIESSource: McKinseyPotential customer
26、needsWish my fenner could Improvement opportunitiesImprove fenners ability to do A, B, CWish it had more Add options X, Y, ZNeed help getting my fenner to Better instructionsToll-free number24-hour serviceWish I could buy more fenners within my budget .Scaled down, low-price fennerCut price on exist
27、ing fennersVolume discounts2176040YesWILLINGNESS TO SWITCH TO AN IMPROVED FENNER% of respondentsNo at a higher price?9010YesNo at the same price?955YesNo at a lower price?Source: McKinseyWould you switch to a fenner with improved features .218KEY FACTORS DRIVING CUSTOMER BUYING DECISIONSource: McKin
28、sey 5 4 3 2 112345 5 4 3 2 112345OptionsPriceCustomer service.Option loversValue seekersService seekersUnimportantImportant05Customer segmentRating219DEMOGRAPHICS OF TARGET CUSTOMER SEGMENTS%Source: McKinseyDemographicsAgeEducation levelBuying behaviorOption loversValue seekersService seekers1020403
29、020 - 3030 - 4040 - 50 50HighMediumLow305020103060CatalogsSuperstoreRetail3530251020404050302020403010403030101080Older customers with medium education level shop in superstores and retail outletsYoung customers with high education level prefer shopping through catalogs and superstoresMid-aged custo
30、mers with average education level strongly prefer shopping in retail outlets220FENNER INDUSTRY FORCES AT WORKSource: McKinseyIndustry structure and economicsSmall number of competitorsR&D and manufacturing scale effects create barriers to entryIndustry profitableMarket growingConsumer demandConsumer
31、 willing to trade upDemand consistently growingNo substitutes for fennersCompetitive conductCompetitors crowded out as others upgrade productNo price competitionInnovation difficult and costlyExternal factorsStrong overall economic growth fuels consumer spendingExpected legislation changes in 2003 c
32、ould additional fuel consumer demandFenner market is an attractive business opportunity221MARKET SHARE OF FENNER COMPANIES, MAT* 1999%4030255Trinity Fenners* Moving annual totalSource: McKinseyJohns Fenner Co.WonabyFennersKings Fenner Co.Significant barriers for entry into fenner market: high resear
33、ch and development costs and scale requirementsFenner companies with old product (e.g., Kings Fenner Company) were quickly crowded out of market222ANALYSIS OF COMPETITORSEFCs competitors generally are not expected to innovate in the near future Trinity Fenners has the highest capability to innovate
34、in the medium future, all other competitors have only low to medium ability to improve their products in response to EFCs fast fennerCompanyTrinity FennersJohns Fenner Co.Wonaby FennersKings Fenner Co.Current market share40%30%25%5%Years since last fennerinnovation35610Innovation expectedPossibleNo?
35、NoCapability to innovate2Source: McKinsey23COMPETITIVE POSITION EFC vs. COMPETITORSEFCAbility for low-cost productionExtensive experience with foar productionSkillsFast fenner patent Well-established brand name for foarsStrategic assetsExisting relationship with some large national retailersSpecial
36、relationshipHighLowJohns Fenner Co.Very good management resources as part of the Johns conglomerateStrong brand namePatent for enhanced fennersPreferred supplier of medium-sized supermarketsKings Fenner Co.New CEOBeginning turnaroundOld production facilities (cannot be upgraded)De-listed from Wesko
37、supermarket two months agoTrinity FennersCost leader in current fenner productionPatent for enhanced fennersFenner retail chainWonaby FennersCEO left six months ago to Kings FennerCo.Partnership with Fenner research labLicense to produce enhanced fennersExperimenting with selling fenners online 2Sou
38、rce: McKinsey24ThreatsCompetitive reaction to market entry of EFC, including possibility of price war Competitors leveraging relation-ship to existing distribution channel to block EFCs market entryFenner competitors attacking EFC on its home territory with entry into the foar marketProduct innovati
39、on through Trinity FennersSWOT ANALYSIS FOR EFC FENNERS FUTURE BUSINESS StrengthsLow-cost production capabilityPatent for faster fenner Well-established brand name for foarsWeaknessesCurrently no experience with online sellingNo own retail activities No relationship with medium-sized supermarketsOpp
40、ortunitiesFast-growing market: CAGR 2000-2005: 9.5%Profitable market: industry-wide ROS 2005: 15%Customers openness to innovation of fenners in the past: market share of even-better fenners in 2000: 90%Customers willingness to switch to fast fenners in the future: 90%2EFC Fenner BusinessSource: McKi
41、nsey25CONTENT EFC BUSINESS PLANExecutive summaryMarket/competitor analysis and EFC positioningProduct and customer value propositionBusiness model, organization, and processesManagement teamOpportunities and risksFinancial planning and RONA analysisImplementation road map1234567826More optionsBetter
42、 performanceLots of serviceValue for moneyCustomer needProduct characteristicsEmotional stylingFast fenners withMany new optionsEnhanced performanceEFC value added24-hour customer service for fast fennercustomersLeveraging experience as low-cost producer of foars to offer fast fenners at todays mark
43、et priceFAST FENNERS VALUE PROPOSITIONValue propositionA better product with more options and an innovative styling at the same price as regular fenners, plus 24-hour customer service3Source: McKinsey27VALUE PROPOSITION TARGETED TO CUSTOMER SEGMENTSSegmentOption loversKey value propositionFast fenne
44、rs have lots of new capabilities you wantValue seekersFast fenners cost the same as traditional fenners, plus you get more bang for your buck with its enhanced capabilitiesService seekersFast fenners offer 24-hour customer service, so help will be there when you need it3Source: McKinsey281.0001.3001
45、.6502.0302.5004.2404.4364.7605.0002.0002.3002.6403.0403.5004.0002001Service seekersESTIMATED CUSTOMER SEGMENT DEVELOPMENT, 2001-2005000 2002200320042005Value seekersOption lovers7,0007,8408,7809,83011,00012CAGR*, 2001-05%156* Compound average growth rateSource: McKinsey36292001Service seekersEFC REV
46、ENUE AND MARKET SHARE DEVELOPMENT, 2001-2005000 2002200320042005Value seekersOption lovers655131,8473,8876,7856661.3552.3276941.4902.6221.0421.836487320CAGR*, 2001-05%6.96.321.039,561,7Market share%* Target price of 2 per fenner* Target price of 1.9 per fenner through increase in price promotions* C
47、ompound average growth rateSource: McKinsey182522154195164332032032030CONTENT EFC BUSINESS PLANExecutive summaryMarket/competitor analysis and EFC positioningProduct and customer value propositionBusiness model, organization, and processesManagement teamOpportunities and risksFinancial planning and
48、RONA analysisImplementation road map1234567831DISTRIBUTION CHANNEL FOR EFCs FENNERS40302010WeskoAlmiLainburyInitially fast fenners will be sold through the national retail outlets of Wesko, Almi, Spam, and LainburyonlyFenner online offering to be decided one to two years after product introductionSi
49、nce fenners have product characteristics similar to foars, consumers should be willing to buy fast fenners from those national retail outletsSpam4Source: McKinsey32PricePromotion PlacementProductMARKETING CONCEPT * Potential online sales commencing in one to two yearsSource: McKinseyNational retail
50、outlets of big supermarket chains onlyShelf placement in conjunction with foars Development of leading edge www platform with complete offering of virtual buying process and built-in flexibility*Pricing at level of even-better fennersPrice transparency (e.g., recommended fast fenner selling price)On
51、e price concept for all channels (in particular for expansion into online offer)Leverage of EFCs foar brand name for faster fennersFull leverage of foar advertising/ promotion carry-over effect for fennersTailored promotion/ communication concept for market entry phaseInnovative product (fast fenner
52、s with many new options and enhanced performance)Additional 24-hour customer service for all fast fenner customers 433CRM LEVERS AND SOURCES OF CUSTOMER DATAFoar sales dataShared customer database with Wesko for foar & fenner salesCustomer call centerStore exit pollsOthers (e.g., from external affin
53、ity players)AcquisitionLoyaltyConquestPotential CRM leversPotential sources of customer dataInitial focus4Source: McKinsey34ORGANIZATIONAL STRUCTURE OF EUROPEAN FENNER COMPANYProposed new business unitCEOCFOCOOHead of corp. centerFast fennerSBU*Great foarSBU4* Strategic business unitSource: McKinsey
54、35ORGANIZATIONAL STRUCTURE OF FAST FENNER BUSINESS UNITFast fennerSBUManufacturingSales and marketingCustomer serviceSystems support/back office4Source: McKinsey36Key activitiesResearch and develop product innovationsUnderstand customer needsTest/pilot new product innovationsDevelop productProduce p
55、roductPurchase raw materialsOperate plantControl quality of outputImprove production flowPackage productShip productDevelop package design Package productDevelop innovative promotion formatControl quality of outputStore bulk productLoad transport vehiclesTrack orders and shipmentsCORE PROCESSES MANU
56、FACTURING* Total quality managementSource: McKinseySkillsStrong R&D, tied to marketingTQM*PurchasingCost controlEfficient plant operationsCost controlQuality controlEfficient packaging/ loadingTransport deploymentStaffingFTEs2341010437CORE PROCESSES SALES AND MARKETINGKey activitiesPerform market re
57、searchSurveysQuestion-nairesSales rep feedbackUnderstand customer needsDevelop marketing strategyGain in-depth consumer understanding Define product positioningDevelop ad/promotions strategy and implementation conceptDevelop sales strategySell to customersBill customersPrioritize potential outletsDe
58、velop account plansNegotiate sales with retailersConduct pricing analysisClose contractsSend billsProcess payments* Including 35 field sales managersSource: McKinseySkillsQuantitative/ analytic analysis of dataCommuni-cationAdvertising expertiseMarketing expertiseSales expertiseCustomer relationsCom
59、muni-cationNegotiationPricing analysisSales experienceAccounting skillsStaffingNo. of FTEs25537*4438Key activitiesSelect accounts to focus onDevelop account plansSchedule account visitsVisit/call on accountsMaintain account relationshipsOperate phone centerSchedule 24-hour shiftsTrain operatorsMonit
60、or callsRespond to customer concernsAdvise over phoneSend service reps to customerOperate in-house service centerCORE PROCESSES CUSTOMER SERVICESource: McKinseySkillsAccount planningCustomer relationship managementCommunicationTechnical knowledgeOperations efficiencyCommunicationTechnical knowledgeR
61、epair and maintenance know-howStaffingNo. of FTEs5890439Key activitiesUnderstand needs of manufacturing, sales, and customer service areasDesign support systems to meet their needsDesign systemsOperate systemsRun day-to-day computer systemsRun help deskAdvise with technical supportService systemsPro
62、vide back-office supportService malfunctioning systemsRepair equipmentProvide secretarial support to manufacturing, sales, and customer serviceProvide legal adviceProvide accounting services*CORE PROCESSES SYSTEMS SUPPORT/BACK OFFICE* Partly outsourcedSource: McKinseySkillsSystems expertiseSoftware
63、designProgramming skillsTechnical skillsCommunicationEquipment repairSecretarial skillsLegalAccountingStaffingNo. of FTEs55410440FAST FENNER BUSINESS UNIT STAFF POSITIONSHead of fast fennerSBU (1)SVP of manufacturing (1)SVP of sales and marketing (1)SVP of customer services (1)SVP of systems/ back o
64、ffice (1)R&D specialists (2)Plant personnel (50)Quality control engineers (4)Sales reps (35)Advertising and marketing specialists (12)Market researchers (2)Billing coordinators (4)Major account reps (5)Service mechanics (90)Phone reps (8)Information technology (14)Human resources (6)Legal (2)Finance
65、 (2)FTE( )4Source: McKinsey41PERSONNEL PLANNING IN FIRST FIVE YEARSFTEManufacturingBuilding of full manu-facturing plant in 2001Driver of FTE growthStarting with sales represen-tatives in region 1 onlyIncluding other regions 2003Developing in line with customer growthStarting with full systems engin
66、eering supportDeveloping customer support in line with customer growth41513Systems/back office385310445525450545657252222222052200195*112*156*184*241*2002200320042005Customer serviceSales and marketing1518* Including head of fast fenner SBUSource: McKinsey42CONTENT EFC BUSINESS PLANExecutive summary
67、Market/competitor analysis and EFC positioningProduct and customer value propositionBusiness model, organization, and processesManagement teamOpportunities and risksFinancial planning and RONA analysisImplementation road map1234567843MANAGEMENT TEAM OF FAST FENNER SBU* Mobile telephonesSource: McKin
68、seyHas led Great Foar SBU for four years, overlooking the rapid growth of the business unitEight years of marketing with Nova with responsibility for $80 million revenues. Consultant with McLinsey, focusing on consumer goods and venture capital investmentsHead of fast fenner SBUSVP of manufacturingS
69、VP of sales and marketingSVP of customer servicesSVP of systems/ back-officeMark Tscherner Stefan FischerJacqueline HochMike MurphyJan Patterson Five years production manager at Trinity Fenner, successfully launching the improved fenner versionAssistant product manager with responsibility for 30 emp
70、loyees10 years of marketing executive experience in leading consumer goods companyWorked for Gutte as brand manager for three yearsVP at call center operations at Rouge*Director of infrastructure development of Rouge*Three years of hands-on experience in back-office building fore-Developing of C+ an
71、d Assembler software for ADS.comIndependent C+ programmer and PhD degree in computing from University of SunderlandName Short CV 544COMPENSATION SCHEMES FOR INTEGRATED BUSINESS UNIT LAUNCHES* From recent sampling (1999/2000)Source: McKinseyCEO/Head of SBUMutual fund company 350,000 base salary50%-60
72、% annual bonusExecutive stock option plan ( 0.5% of stores)SVP of manufacturingConsumer products companyEURO 190,000 base salary15%-25% bonusSmall number of sharesSVP of sales and marketingRetail clothing chainEURO 225,000 base salary20%-30% bonusSmall number of sharesSVP of customer services/system
73、s and back officeFoar company170,000 base salary10%-20% bonusSmall number of sharesRange of base salary* (average)180,000 450,000(342,000)130,000 290,000(124,000)140,000 280,000(231,000)125,000 245,000(187,000)5Recent management searches45VISION, MISSION, AND IMPERATIVES FOR FAST FENNER SBU VisionMi
74、ssionStrategic imperativesWhat is fast fenner?Where are we going?How will we get there?An innovative company driving for high customer satisfactionWe aim to be the worlds No. 1 fennerproducer. In getting there we will attain a commanding market share and facilitate a sustainable, long-term profit gr
75、owthDevelop a focused, segmented, dif-ferentiated product portfolio by marketEstablish excellent trade, marketing, and distribution capabilities in end mkt. Develop and manufacture innovative products while minimizing supply chain costsEstablish leading position in all key marketsEnsure that manager
76、s in key roles are first class5Source: McKinsey46CONTENT EFC BUSINESS PLANExecutive summaryMarket/competitor analysis and EFC positioningProduct and customer value propositionBusiness model, organization, and processesManagement teamOpportunities and risksFinancial planning and RONA analysisImplemen
77、tation road map1234567847OPTIONS FOR MARKET ENTRY CONSIDERED BUT REJECTEDReason for rejectionsOptionsConsumers may not trade up, reducing market penetrationSet a higher retail pricePricingCannot make profit at cost level below todays marketSet a lower retail pricePatent lasts 15 years and innovation
78、s are difficult to copyDont patent fast fenner in order to get to market quickerCompetitive responseFenner competitors historicallydo not have capability to successfully innovateCut price to preempt competitive entryAdding catalog service increases annual cost by 50 millionUse catalogsDistribution c
79、hannelsSuperstores reduce profitmargins by 5%Use superstoresUsing all three distribution channels increases annual cost by 60 million and reduces profit margins by 4%Use retail outlets, catalogs, and superstores6Source: McKinsey48CONTENT EFC BUSINESS PLANExecutive summaryMarket/competitor analysis a
80、nd EFC positioningProduct and customer value propositionBusiness model, organization, and processesManagement teamOpportunities and risksFinancial planning and RONA analysisImplementation road map1234567849DEVELOPMENT OF KEY FINANCIALS, 2001-2005200120032005200120032005200120032005200120032005Revenu
81、eEBITROSRONA% millions millions7BASE CASE-144-511,162651,8476,785-317-222-1767-178Source: McKinsey50FIVE-YEAR PROJECTION OF PROFIT AND LOSS STATEMENT millionsBASE CASERevenueExpenses% of revenuesCost of goods sold% of revenuesMarketing and sales% of revenuesAdministration % of revenuesR&D% of revenu
82、esEBIT% of revenuesInterestTaxesNet income% of revenues200120022003200420056520932281125558530464366-144-22230-147-226513626122348681523058116814-113-2280-121-241,8471,8981031,1826436220165918910-51-3120-63-33,8873,510902,2955961716305829383781012536196,7855,623833,8915796314480742461,16217123407931
83、27Source: McKinsey51FIVE-YEAR PROJECTION OF CASH FLOW STATEMENT millionsBASE CASECash year in20012002200320042005Sources of cashNet income:+Depreciation (amortization)Increase/decrease in+Trade and other payables+Employee benefit liabilities+Deferred tax liabilities+Long-term debt and loansTotal sou
84、rces of cashUse of cashIncrease/decrease in: Trade and other receivables+ Inventories+Fixed assets+InterestTotal use of cashIncrease/decrease in cash+Financing (increase of equity)Cash years out043331236-147885050-12112163080-631923605036185368107931034998401438315541283622412161568312352271551248-7
85、6-10+354911,03870-14615077-87120114-7911028620504425960433312368327Source: McKinsey52FIVE-YEAR PROJECTION OF BALANCE SHEET ASSETS millionsBASE CASECurrent assetsLiquid assets+Trade and other receivables+InventoriesTotal current assets200120022003200420054141533548468133681811910120811833113034195152
86、39113299236286695912791241557518325131171,4625092272821,7447Fixed assetsGross valueAccumulated depreciationTotal fixed assetsTotal assetsSource: McKinsey53FIVE-YEAR PROJECTION BALANCE SHEET LIABILITIES AND EQUITY millionsCurrent liabilities20012002200320042005Trade and other payables+Employee benefi
87、t liabilities+Deferred tax liabilitiesTotal current liabilitiesLong-term liabilitiesLong-term debt and loansTotal long-term liabilitiesTotal liabilitiesEquityShare capital+Retained earningsTotal equityTotal liabilities and equity85013505063150-1321881248032130130162270-249211834714061180180241380-27
88、1109299832211061801802863808546575113231852481801804283809361,3161,744BASE CASE7Source: McKinsey54PROJECTION OF EBIT, ROS, AND RONA, 2001-2005ROS%RONA%EBIT millionsBASE CASE7-144-113-513781,162-178-62-175067-222-22-31017Source: McKinsey55BUSINESS EVALUATION THROUGH DCF* METHOD-144-113-513781,1622001
89、2002200320042005Residual value*302724211815.5Discounting rate%NPV of free cash flows is 4,653 millionBASE CASE* Discounted cash-flow analysis* Last years cash flow with yearly growth rate of 2.5% discounted by 15.5%Source: McKinsey millions8,938756DESCRIPTION OF CASESBase caseDevelopment as expected
90、Worst caseCompetitors (Trinity Fenner, Wonaby Fenner) developing fast fenner in two to three yearsMarket growth limited (3%)Price war driving down market price by 10%-15%Best caseMarket exit 2002 of Kings Fenner companyMarket growth exceeding expectations (15%-20%) mainly driven by introduction of f
91、ast fennersPrice discrimination for option levers by 10%7Source: McKinsey575121,1622,014COMPARISON OF EBIT, ROS, AND RONA BETWEEN CASES, 2005Worst caseEBIT millionsBase caseBest caseROS%RONA%751724326785Source: McKinsey58BUSINESS EVALUATION THROUGH WEIGHTING CASESBase caseWorst caseBest caseDCF mill
92、ions4,6536,221-138Probability%6020207Value of EFCs fast fenner SBU4,008millionSource: McKinsey59CONTENT EFC BUSINESS PLANExecutive summaryMarket/competitor analysis and EFC positioningProduct and customer value propositionBusiness model, organization, and processesManagement teamOpportunities and ri
93、sksFinancial planning and RONA analysisImplementation road map1234567860IMPLEMENTATION ACTION PLAN AND TIMELINE, 2001Finish final product development Set up business unitHire new staffTrain new staffBegin fenner productionDevelop marketing strategy/ads campaignBegin ads campaign/ sales rep visitsRoll out fast fennersStart up customer service phone centerSend out account repsFollow up surveys with early customersFine-tune productJFMAMJJASONDActivity8MonthSource: McKinsey
