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1、www.myCNI.com.mywww.OOBEY.com STRATEGIC PLANNING AND BUDGETING Part 1: Business Model and StrategyCase Study, Concepts and Debatable IdeasKenny OngCNI Holdings Berhadwww.myCNI.com.mywww.OOBEY.com Intro: CNI1.20 years old2.Core Business: MLM3.Others: Contract Manufacturing, Export/Trading, eCommerce4
2、.Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan, Oman, United States, Vietnam5.Staff force: 5006.Distributors: 200,0007.Products: Consumer Goods and Serviceswww.myCNI.com.mywww.OOBEY.com History of Strategic Planning and Budgetingwww.myCNI.com.mywww.OOBEY
3、.com Planning in the “old” days1.Budget top down no questions asked2.Only two budget goals revenue, expenses3.The only planning we needed to do was “do better than last year”4.Planning was bottom up - compilation of plans within set budget5.No one knew what the other was planning6.Accountings role w
4、as only to compile budget for approval7.KPIs were not used8.Sales was resource priority, everything else not important9.Assumed no major changes in market10.R&D was bottom upwww.myCNI.com.mywww.OOBEY.com Problems from the startwww.myCNI.com.mywww.OOBEY.com Problems from the start (1/2)1.No money2.Sp
5、lit Objectives: Sales? Share Price? Image?3.Independent entities4.Accounts controlling schedule5.S&M always running over budget6.Compounding activities 7.BOD expectations too high without proper explanation nor justification8.Lack of Market research9.Expenses not spent gets punishedwww.myCNI.com.myw
6、ww.OOBEY.com Problems from the start (2/2)10.Budgeting for known, consistent, and predictable business conditions11.Never learn from past mistakes, usually in under-budgeting (e.g. staff and PCs)12.Wrong Business Model blame Budgeting & Planning. Having a good planning process cannot correct a bad b
7、usiness model13.Focusing on the Process (KPIs), instead of “Business”14.Planning & budgeting treated as separate processes by businesses/functions www.myCNI.com.mywww.OOBEY.com Todays Agendawww.myCNI.com.mywww.OOBEY.com Summary: Planning & BudgetingLong-term PlansObjectivesStrategiesEnablersResource
8、sAlso known as L.O.S.E.R.www.myCNI.com.mywww.OOBEY.com Summary: Todays presentation1. Business Model2. Strategy3. Alignment4. Resourceswww.myCNI.com.mywww.OOBEY.com Assumptions 1: Audience1.Business2.Government3.Non-profitwww.myCNI.com.mywww.OOBEY.com Assumptions 2: Starting Point1.Wanting to start
9、proper planning & budgeting process, or2.Wanting to improve planning & budgeting processwww.myCNI.com.mywww.OOBEY.com 1. Get the right Business Model firstwww.myCNI.com.mywww.OOBEY.com How to fail without trying1. Wrong Business Modelwww.myCNI.com.mywww.OOBEY.com The Roadmap to Failure Fred Wiersema
10、 and Mike TreacyPerformanceTimeClear SailingTodays performanceAd-hoc TacticsDenial & DefenseDoom ProjectionsOverdue FailureThe Moment of TruthXPerformance FreefallTomorrows actual performanceDownpresure of Unclear Strategywww.myCNI.com.mywww.OOBEY.com Denial and Defense“Its not really good value our
11、 competitor is offering, because it doesnt include a lot of our features.” - ABC vs 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
12、before” AMEX vs VISAwww.myCNI.com.mywww.OOBEY.com The Roadmap to Failure Fred Wiersema and Mike TreacyPerformanceTimeClear SailingTodays performanceAd-hoc TacticsDenial & DefenseDoom ProjectionsOverdue FailureThe Moment of TruthXPerformance FreefallTomorrows actual performanceDownpresure of Unclear
13、Strategywww.myCNI.com.mywww.OOBEY.com Ad Hoc TacticsSelectively hold discounts to hold business that has started to go elsewhereIntroduce new promotions, terms, conditions, and offers to confuse and cloud the marketBeef up customer service by adding people to fix mess-ups and quicken delayed shipmen
14、tsDelay capital investments and adjust accounting methods to portray quarterly financial results more favorablyIntroduce “new and improved” products that are new in form, but not in substantive ways that are of consequence to purchasersIntroduce Balanced Scorecards and Performance Management Systems
15、www.myCNI.com.mywww.OOBEY.com The Roadmap to Failure Fred Wiersema and Mike TreacyPerformanceTimeClear SailingTodays performanceAd-hoc TacticsDenial & DefenseDoom ProjectionsOverdue FailureThe Moment of TruthXPerformance FreefallTomorrows actual performanceDownpresure of Unclear Strategywww.myCNI.co
16、m.mywww.OOBEY.com “What is the moral of the story?”www.myCNI.com.mywww.OOBEY.com What is the Business Model?USPMarket DisciplineProfit Modelwww.myCNI.com.mywww.OOBEY.com Intro: Market DisciplineMamak stallwww.myCNI.com.mywww.OOBEY.com Intro: Market DisciplineThey are the most innovativeConstantly re
17、newing and creativeAlways on the leading edgeA great deal!Excellent/attractive priceMinimal acquisition cost and hassleLowest overall cost of ownershipA no-hassles firmConvenience and speedReliable product and serviceExactly what I needCustomized productsPersonalized communicationsTheyre very respon
18、sivePreferential service and flexibilityRecommends what I needIm very loyal to themHelps us to be a successProduct LeadershipOperationalExcellenceCustomerIntimacywww.myCNI.com.mywww.OOBEY.com Operational Excellence(low cost producer)Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wierse
19、ma; 1995Product Leadership(best product)Customer Intimacy(best total solution)Strategy: Value Disciplineswww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Operational ExcellenceCompetitive priceError free, reliableFast (on demand)SimpleResponsiveConsistent information for allTransactionalO
20、nce and DoneCustomer IntimacyManagement by FactEasy to do business withHave it your way (customization)Market segments of oneProactive, flexibleRelationship and consultative sellingCross sellingProduct LeadershipNew, state of the art products or servicesRisk takersMeet volatile customer needsFast co
21、ncept-to- counterNever satisfied - obsolete own and competitors productsLearning organizationStrategy: Value Disciplineswww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com The McPlaybook*Make it easy to eat50% drive-thruMeals held in one handMake it easy to prepareHigh TurnoverTasks simple t
22、o learn & repeatMake it quick“Fast Food”Tests new products for Cooking TimesMake what customers wantProwls market for new productsMonitored field tests*Adapted from: Businessweek , Februrary 5th 2007www.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Operational Excellence(low cost producer)
23、Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995Product Leadership(best product)Customer Intimacy(best total solution)Strategy: Value Disciplineswww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Operational Excellence(low cost producer)Ref: The Discipline of Mark
24、et Leaders, Michael Treacy & Fred Wiersema; 1995Product Leadership(best product)Customer Intimacy(best total solution)Strategy: Value Disciplineswww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Intro: Market Discipline* Treacy & Wiersema, The Discipline of Market Leaders, 1995Product/Serv
25、ice AttributesRelationshipImagewww.myCNI.com.mywww.OOBEY.com Intro: Market Discipline* Treacy & Wiersema, The Discipline of Market Leaders, 1995Product/Service AttributesPriceQualityTimeSelectionSmart ShopperRelationshipImageOperational Excellence: Quality and selection in key categories with unbeat
26、able priceswww.myCNI.com.mywww.OOBEY.com Intro: Market Discipline* Treacy & Wiersema, The Discipline of Market Leaders, 1995Product/Service AttributesBrandTimeFunctionBest ProductRelationshipImageProduct Leadership: Unique products and services that push the standardswww.myCNI.com.mywww.OOBEY.com In
27、tro: Market Discipline* Treacy & Wiersema, The Discipline of Market Leaders, 1995Product/Service AttributesServiceTrusted BrandRelationshipImageCustomer Intimacy: Personal service tailored to produce results for customer and build long-term relationshipsRelationswww.myCNI.com.mywww.OOBEY.com Operati
28、onal Excellence(low cost producer)Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995Product Leadership(best product)Customer Intimacy(best total solution)Strategy: Disciplineswww.myCNI.com.mywww.OOBEY.com Summary: Todays presentation1. Business Model Done2. Strategy3. Alignm
29、ent4. Resourceswww.myCNI.com.mywww.OOBEY.com 2. Set the StrategiesHope is not a strategywww.myCNI.com.mywww.OOBEY.com What is Strategic Planning?Strategic PlanningVariables:ResearchGrowthRisksStakeholdersConstraintsSWOTMisc.Output:PlansPrioritiesKPIswww.myCNI.com.mywww.OOBEY.com Before we startWhich
30、 comes first?1.Strategies - KPI?2.KPI - Strategies?www.myCNI.com.mywww.OOBEY.com Step 1: Analysis1.SWOT2.PESTEL3.Scenario Analysiswww.myCNI.com.mywww.OOBEY.com SWOT: Opportunities & ThreatsOpportunities=Taking advantage of TrendsThreats=Strategic Risk Managementwww.myCNI.com.mywww.OOBEY.com Downturn
31、 Trends?www.myCNI.com.mywww.OOBEY.com Downturn Trends?www.myCNI.com.mywww.OOBEY.com Downturn Trends?www.myCNI.com.mywww.OOBEY.com Downturn Trends?www.myCNI.com.mywww.OOBEY.com SWOT: General Strategic Risks1.Industry1.Margin Squeeze2.Rising R&D/CAPEX3.Overcapacity4.Commoditization5.Deregulation6.Incr
32、eased power among suppliers7.Extreme business-cycle volatility2.Technology1.Shift in technology2.Patent expiration3.Process becomes obsolete3.Brand1.Erosion2.Collapse1.Competitor1.Emerging global rivals2.Gradual market-share gainer3.One-of-a-kind competitor2.Customer1.Customer priority shift2.Increa
33、sing customer power3.Over reliance on a few customersProjectR&D failureIT failureBusiness development failureMerger or acquisition failureStagnationFlat or declining volumeVolume up, price downWeak pipelineAdrian J. Slywotzky and John Drzikwww.myCNI.com.mywww.OOBEY.com PESTEL and ScenariosScenario 1
34、Scenario 2Scenario 3PoliticalEconomicSocialTechnologyEnvironmentLegalwww.myCNI.com.mywww.OOBEY.com Business Situation vs. FocusUpturnFlatDownturnFight ComplacencySharpen EdgeKeep MomentumConquerChange mgmtReduce FatContinuityEveryone HappyInnovationAcquireProfitsBuild momentumSalesCash FlowTalent Mg
35、mtInnovation/R&DEarly winsSlow Down HR CostsTop Talent focusSales, Sales, SalesIncrease attritionwww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Business Situations vs. FocusUpturnFlatDownturnFight ComplacencySharpen EdgeKeep MomentumConquerChange mgmtReduce FatContinuityEveryone HappyIn
36、novationAcquireProfitsBuild momentumSalesCash FlowTalent MgmtStack R&DEarly winsSlow Down HR CostsTop Talent focusStack SalesIncrease attritionMany times, you need a different CEO/Leader/Management Team for each business situationwww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Step 2: Wh
37、at is your Goal?1.Cost Reduction2.Growthwww.myCNI.com.mywww.OOBEY.com Strategies for Growth1.Base Retention2.Share Gain3.Positioning4.Adjacent Market5.New BusinessGROWTH“Double-Digit Growth”, Michael Treacywww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com GrowthExpansion1.Consolidate2.Geog
38、raphic3.Distribution4.CompensateTransformative1.Portfolio refocus2.DiversificationEasierTougherwww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Growth thru ExpansionExpansion1.Consolidate2.Geographic3.Distribution4.Compensate1.Gain Scale to compete2.Integrated Solutions3.Financial Growth4
39、.Supply (security, mix)5.Developing markets6.High cost of Extra Capacity7.Private Equity8.Expanding Sovereign Fundswww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Growth thru ExpansionExpansion1.Consolidate2.Geographic3.Distribution4.Compensate9.De-regularization10.Demand outstrip supply
40、11.Revenue Mix Tax optimization12.Talent13.New, Low-cost Entrants14.Undervalued Big Players15.Newer Assetswww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Transformative GrowthTransformative1.Portfolio refocus2.Diversification1.New Business Lines2.Selling/Spin-off non-core3.Increase produ
41、ct line4.New customers5.New technologies*6.Complementary Business7.Up-down Supply Chain8.Patent9.Convergence anticipationwww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Cross Sector TransformationTraditionalAlternativeIncrementalwww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com
42、 Cross Sector TransformationTraditional UtilityAlternativeEnergyIncrementalTechnologyNew Delivery, New Sources, Existing ResourcesOil, Gas, Electricity, CoalBiomass, Nuclear, Ethanol, Wind, Solarwww.myCNI.com.mywww.OOBEY.com Example: Energy Sectorwww.myCNI.com.mywww.OOBEY.com Step 3: Strategy1.Base
43、Retention2.Share Gain3.Positioning4.Adjacent Market5.New BusinessGROWTH“Double-Digit Growth”, Michael Treacywww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com How Markets determine Growth Strategies (1)Growth RateGrowth RateStrategyWhy?Fast1.Market Positioning2.Share Gain3.Base RetentionMai
44、ntain market share in strategic segmentsPrepare for market declineCompetitors focus too much on getting new customersFlat1.Base Retention2.Share Gain (Acquisitions)Lose customers slower than competitorsCreate scale economics, squeeze costswww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com C
45、hurn RateChurn RateStrategyWhy?Low1.Share Gain (Acquisitions)2.Adjacent MarketsBuying customer base is cheaper than own effortsNew products, old customers strategyHigh1.Base Retention2.Share Gain 3.Adjacent MarketLose customers slower than competitorsCustomers are always open to the best value and o
46、fferDesperate to gain revenueHow Markets determine Growth Strategies (2)www.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com How Markets determine Growth Strategies (3)Fast Growth,Low Churn1.Market Positioning2.Share Gain (M&A)3.Base Retention4.Adjacent Markets (M&A)Example: XYZ Sectorwww.myC
47、NI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Create better Value propositionNeutralize competitor advantagesBuy Market Share outrightPrice PremiumOperating ModelIntegrationStrategy 2: Share Gainwww.myCNI.com.mywww.OOBEY.com www.myCNI.com.mywww.OOBEY.com Buying Market Share: Acquisition strategyIntegrationOperatingModelPricePremiumBuying Market ShareNet Cost per Customer stand alonewww.myCNI.com.mywww.OOBEY.com Thank You.soft copy of slides:
