The Senior Management at BLMC have been helping clients with strategic planning for over 30 years, including using techniques from BCG / McKinsey / GE as well as the concepts of Strategic Intent, Core Competencies and the methodologies of PricewaterhouseCoopers. We are familiar with at least 15 different strategy methodologies to apply to the appropriate situation. We help companies understand the successes and failures of their current strategic planning process and help define and evolve new processes that will be more durable to the changeing environment.
+ Define Direction
Defining Strategic Intent:
This is the determination of the long term goal for the company. We usually try to make this at least 10 years out, and with this direction, we can begin to fill in the changes needed to get there. This is a senior management only discussion and may gently change as the strategic planning evolves.
Determining Business Direction:
This is the early discussion of what markets, products and services do we currently serve and what of those do we want to continue or discontinue and why. This is also where the initial conversation about future markets and products takes place, along with the brainstorming of "what is needed to get there?"
+ Business Analysis
The purpose of micro environmental analysis is to describe, analyze, and better understand the external and internal world with which the client must do business. It is intended to encompass the broad areas which deal with: The Market and its characteristics; The Industry and its characteristics; The Competition and its characteristics; and The Customers and their characteristics. This is analyzed with a current view and a long term view…typically three years out.
The purpose of macro environmental analysis is to describe, analyze, and better understand the impact which government, the economy, and changing social attitudes will have on the client, its products, the market, and the industry during the planning horizon. This also has a 3-5 year horizon.
+ Competitor Analysis
The purpose of the competitor analysis methodology is to analyze each major competitor in sufficient detail so as to be able to re-construct the strategies that the competitor is pursuing. This is not an easy task. Some competitors are small and privately held; and, therefore, information is difficult to come by. Other competitors don't have a clearly articulated strategy; and, therefore, the task becomes one of determining what they are doing, which becomes their implied strategy. Other competitors say one thing and are doing something else. Regardless of the competitor's sophistication in formulating and implementing a logical and consistent strategy, we help our client understand their major competitors and how they think and act… now, and going out a few years.
+ Internal Resource Analysis
The purpose of this section is to objectively assess the strengths and weaknesses of the client relative to the leaders in the industry where the client competes. The most difficult task in preparing this analysis is to maintain objectivity. There is a tendency to temper the degree of the weaknesses and to stretch the degree of the strengths. The concern is not with the fact that a business has weaknesses and vulnerabilities; this is normal and is expected. The concern is whether they are adequately understood so that a given strategy's success will not be contingent on a weakness and so that necessary action can be taken to strengthen weaknesses which are required for success.
+ Product Operating Mode
One of our methodologies includes evaluating the current and future state of the Product Operating Mode. The purpose of the product operating mode is to synthesize all the strategic elements associated with Environmental Analysis, Competitor Analysis, and Internal Resource Analysis into an assessment of the attractiveness of the industry and Strength of the client’s position within that industry for each of the client’s major product lines This summarization helps determine the direction of the product line strategies. We have found that these usually fall into one of three possible product operating modes to the product line and helps define how the enterprise needs to deal with investment, resource development, product line expansions, risk, marketing, and other critical operational focuses.
• Invest Grow
• Maintain Selectivity Invest
• Maximize Cash
+ Strategy Development
We typically begin strategy development once we understand the current competitive environment and a sense of how it will evolve over some years…typically 3-5 years into the future. With an agreement on the long term strategic intent, we begin to define those strategy elements that will help accomplish the strategic intent. Most strategies have only 3-5 elements but completion of those elements will significantly accomplish the long term strategic intent.
We begin to define those elements with actions needed to accomplish the task, and to define the metrics and measurements needed to assure that the strategy element is being accomplished, and finally we define the constraints that logically will exist in implementing that strategy element, be it investment, people or technology.
As the strategy elements are defined, we begin to outline the high level operational plans required to accomplish the tasks, including the investment, costs and resources for each specific area. Once these are understood, we perform various risk tests, including the famous SWAT analysis, and volume/profit/cost analysis for the various products or services. This helps define the strong and weak elements of any strategy direction. This is typically done by most companies, and each have a unique look at risk.
We typically help define the feedback loops in the strategy elements, and put in place the processes that mandate a relook at strategy if the basic assumptions are violated. It is our experience that most of this is missing in most planning processes.
+ Financial Plan Development
As part of the strategic plan, we convey the expected financial results of the strategies that have been proposed. This includes proforma income statements, balance sheets and cash flows. The objective here is to evaluate the strategic alternatives with the best overall financial impact.
+ Operational Plan Development
This section contains a more complete description of the programs and action plans that will be used to accomplish the strategies selected. By definition, strategy elements are broader but higher level statements. They conceptually indicate in terms of who why, where, how, and what will be done, but the details necessary for effective implementation are left to the operational plan. The operational plan is prepared on a time based format; and typically contains both product and functional projects. The idea is that the operations plans support the strategic element and the strategic elements support the long term strategic intent, and they all tie.
+ Supporting Methodologies
We have also worked in several strategic methodologies that are more specific in nature including:
Quality Systems Strategy Development:
A methodology to reform a company’s quality systems into a first pass yield, quality assurance structured, operator driven approach. This strategy moves away from the philosophy of inspecting quality into the product and moves toward the process and assuring that the process requirements are being met. This strategy supports ISO 9000 requirements.
The development of models based on stochastic or deterministic methods to describe a business process, a market response, or the valuation of a product offering in terms of customer savings. BLMC partners with EconomicPath in developing complex business models for pricing or shareholder value determination.
Product Portfolio Analysis:
A methodology first developed by McKinsey and modified over time by BLMC to be more in line with our client’s needs. The methodology focuses on the product horizon segmentation and how they are managed. We provide a detailed analysis of when product offerings contribute to the revenue and income statement as a function of time and allocation of resources. This analysis is used as part of the Financial Plan development section of our Strategic Planning process.
Service Management Strategies:
This is a complex but complete methodology that allows product focused companies to move to a service based focus, where the customer’s needs and sense of success drive the product offerings. We have helped many of our clients who do business in a highly volatile market environment, and wish to increase the revenue from service offerings, and to minimize the effect of the market on bottom line profits.