Why write a business plan? Strategic management define difference between strategic management vs. strategic planning . Strategic management process strategy formulation Strategy implementation Strategy evaluation
Becouse I have to -------- needed for financing - strategic partnering - attract key people / investors - organize my thoughts
because I need to understand my business - the plan is the result of a planning process - people don’t plan to fail ; they fail to plan how are my customer? Why will they buy my product or service? What will they pay? How will I make and deliver/sell the service/product? What resources ( people, money , technology) do I need? Can I make money / create value? Do I have the right team on board ?
Art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. Basic of strategic management:-strategic management consist of four basic elements:-- environmental scanning- strategy formulation- strategy implementation- Evaluation & control
Strategic management Used more often in academia Strategic planning Used more often in the business world
Environmental scanning Strategy formulation Strategy implementation Evaluation & control
Environmental scanning and industry analysisEnvironmental scanning is the monitoring, evaluating and disseminating of information from the external and internal environments to keep people within the corporation. It is a tool that a corporation uses to avoid strategic surprise and to ensure long-term health.
The social environment includes general forces that do not directly touch on the short-run activities of the organization but those can, and often do, influence its long-run decisions. These forces are:-• Economic forces• Technological forces• Political-legal forces• Social cultural forces
A TEAM with Relevant Experience Market Size Idea Technology Competitive Advantage Reasonable Projections Exit Strategy
Company structureFinancials idea Operations & production Market Team Competitive edge Marketing strategy
Strategy formulation Elements of the Business Plan1.Executive Summary2.The opportunity, company, product/service, vision, mission & objectives3.Market research/analysis / SWOT Analysis4.Marketing plan5.Design and development plan6.Manufacturing& operation plan7.Management team8.Financial plan (Capital Required, Projections, Returns)9.Action plan
1.Idea generation, Vision, Mission, Objectives, Strategies2.Market research and Analysis3.Marketing strategy4.Production planning5.Management and Organization6.Financial plan7.Company formulation
• Innovative product or service• Visualize a market gap – youcan add value• Imported idea
Where do you want to go at the end? vision What is the roadmap and major mile 4th Objective stones? Strategy 3rd Objective How will you reach your SMART objectives? Specific Measurable Achievable 2nd Objective Relevant Time-Bound 1st Objective
Who are your stakeholders and what is your mission to each one Religion of them? FamilyCommunity Work Mission: Stakeholders Country Friends
Who are your stakeholders and what is your mission to each oneSuppliers of them? Shareholders Community Employees Mission: Stakeholders Country Customers
Amazon: Amazon’s vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online. Apple: Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.
Face book: Face books mission is to give people the power to share and make the world more open and connected. Microsoft: Microsoft’s mission is to enable people and businesses throughout the world to realize their full potential. Yahoo!: Yahoo!’s mission is to be the most essential global Internet service for consumers and businesses
2. Market Analysis Market size–How big is it NOW?–Trends –how fast is it or will it grow? Market Players –Competitors–Competitive Advantage–Estimated market shares–Existing/planned products in the marketplace Is this the RIGHT TIME for my product? Is there a GAP that I can fill?
How maximize Strengths them Internal minimize theirWeaknesses effects Strengths How you capitalizeOpportunities on them External How you avoid Threats them
•Who are my TARGET customers?•Why would they buy my product?•How much would they pay?•What are the special features in my product?•What is my competitive advantage It is all about your EDGE
Defining Target Market Needs, Wants, Demand Marketing Mix Marketing Research 4 Ps Product Promotio Variety n Place Promotion Quality Price Channels ssegme Targeti Positi Design Price List Coverage Advertisin nting ng oning Features Discounts Location g Brand Allowance s Inventory Sales Force Packaging Payments Transport Public Size Credit Push / relation Services Pull Direct Warranty Return marketing
4. Production plan•Technology•Equipment•Raw Material Sourcing•Operation Plan and Capacity
5. Management Plans•Getting the RIGHT Team on board•Training•Delegation•Empowerment
Income StatementObjective: provides information about the firm’s operating activities over a specific period of time. Revenue: 100 100%-Cost of Goods Sold (COGS): 60 60%Gross Profit (Profit Margin) 40 40%Operating Expenses: General & Administration 8 8% Sales & Marketing 12 12% -Total Operating Expenses 20 20%Earning Before Interest, Tax, Depreciation & Amortization (EBITDA) 20 20%-Depreciation & Amortization 5 5%Earning Before Interest and Tax (EBIT) 15 15%-Interest Expenses 5 5%Net Income Before Tax 10 10%-Taxes 2 2%Net Income 8 8%
• Name – logo – slogan• Legal structure• Location Mission – values – objectives