Strategy Planning and Implementation             Framework              For and by             ABC Unit
Strategy Formulation Framework                        • IFE               Input    • EFE               Stage    • CPM     ...
Internal Factors Evaluation - IFE           Strengths                                                    Weight   Rating  ...
External Factors Evaluation - EFE  Opportunities                                                        Weight   Rating   ...
Competitive Profile Matrix - CPM                                                             ABC            OutsourcingPro...
Strategy Formulation Framework                        • IFE               Input    • EFE               Stage    • CPM     ...
Internal External Evaluation Matrix                                         Internal FE Score (2.77)                      ...
SWOT Matrix                                                                  Strength – S                                 ...
BCG Matrix                                              Relative Market Share Position                                    ...
SPACE Matrix – (Strategic Position and Action)Space Matrix                           Rating    Score                      ...
SPACE Matrix                                         FS      Conservative                                         Aggressi...
Grand Strategy Matrix                                       RAPID MARKET GROWTH                      Quadrant II          ...
QSPM – Quantitative Strategic Profiling Matrix                                                                   Build and...
Balances Scorecard                 for         Strategy ExecutionFramework that translate strategy into operational      o...
ABC Top Issues Low Internal awareness and Buy-In All ABC projects are being out-sourced Outsourced employees are workin...
Strategic Action List                     •Time bound revenue goals and responsibilities                     •Performance ...
Marketing Mix        •Software Development                         •Personal Selling        •Database Consulting          ...
Scorecard and Cause-effect Terms                                                               And Realize                ...
Building Blocks         Financial Perspective                                                            1. The economic m...
Balanced Scorecard Six Step Development Process                              Step 3Step 1                                 ...
Summary•   Evaluation shows that ABC initiative have good potential•   Internal awareness and marketing of ABC•   Clear go...
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Strategy Framework - ABC Company -18062009

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Strategy Planning and Formulation Framework for IT Consulting Company - ABC

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Strategy Framework - ABC Company -18062009

  1. 1. Strategy Planning and Implementation Framework For and by ABC Unit
  2. 2. Strategy Formulation Framework • IFE Input • EFE Stage • CPM • IE Matrix • SWOT Matrix Matching • SPACE Matrix Stage • BCG Matrix • Grand Strategy Matrix Decision • QSPM Stage
  3. 3. Internal Factors Evaluation - IFE Strengths Weight Rating Score 1 Major player in local market 0.02 4 0.08 2 Strong relationship with government and private sector 0.02 4 0.08 3 JCCS presence/reach across Kingdom 0.02 4 0.08 4 Partnership with major players 0.02 3 0.06 5 JCCS success stories will help in getting projects 0.01 4 0.04 6 Services projects bundled with hardware sales 0.1 4 0.4 7 Existing customer base can generate repeated sales 0.02 3 0.06 8 Technical expertise pool 0.1 4 0.4 9 Management Expertise 0.2 4 0.8 10 Financial Resources 0.02 4 0.08 Weaknesses 1 Disconnected & dispersed technical employees 0.1 1 0.1 2 Poor marketing plan 0.1 2 0.2 3 Poor strategy and target responsibility 0.1 1 0.1 4 Bad reputation in services 0.05 2 0.1 5 No knowledge management 0.03 2 0.06 6 Technical infrastructure not ready 0.01 2 0.02 7 Org. structure not suitable for Functional excellence 0.03 2 0.06 8 Delays and gap in inter-department communication 0.05 1 0.05Scale used:4 = Current Response is Superior 2.773 = Current Response is Above Average2 = Current Response is Average1 = Current Response is Poor max Score = 4.0
  4. 4. External Factors Evaluation - EFE Opportunities Weight Rating Score 1 IT Service Market expected to be US$ 1350mn in 2012 0.2 2 0.4 2 Companies are unable to generate insight from data 0.05 3 0.15 3 Increasing trend in business aligned IT/IS 0.05 3 0.15 4 Companies are looking to reduce cost by outsourcing 0.2 4 0.8 5 Customers IT staff is under staff or lacks skills 0.1 4 0.4 6 International vendors need local partner 0.05 3 0.15 Threats 1 Increased competition 0.1 2 0.2 2 Difficulty in finding and retaining skill staff 0.05 3 0.15 3 Global financial crises 0.05 3 0.15 4 Mergers and Acquisitions of vendors 0.05 2 0.1 5 Vendors coming in service industry 0.05 2 0.1 6 International service companies presence in KSA 0.05 2 0.1 2.85Scale used:4 = Current Response is Superior3 = Current Response is Above Average2 = Current Response is Average1 = Current Response is Poor max score=4.0
  5. 5. Competitive Profile Matrix - CPM ABC OutsourcingProducts and Services Weight Rating Weighted Rating Weighted Score ScoreSoftware Development 0.100 2 0.20 3 0.30Database Consulting 0.175 4 0.70 1 0.18Infrastructure Management services 0.100 3 0.30 2 0.20Business Intelligence Services 0.100 2 0.20 2 0.20Customer Relationship Management 0.100 2 0.20 1 0.10Marketing Strategy 0.125 1 0.13 2 0.40Marketing Share 0.025 1 0.03 4 0.10Technical Resources 0.100 4 0.40 3 0.30Financial Benefits 0.100 4 0.40 2 0.05Strategic partnership 0.025 4 0.10 3 0.08Umrah application service provider 0.025 3 0.08 0 0.00Product and service portfolio 0.025 4 0.10 2 0.05 TOTAL 1.000 2.83 1.95
  6. 6. Strategy Formulation Framework • IFE Input • EFE Stage • CPM • IE Matrix • SWOT Matrix Matching • SPACE Matrix Stage • BCG Matrix • Grand Strategy Matrix Decision • QSPM Stage
  7. 7. Internal External Evaluation Matrix Internal FE Score (2.77) Strong Average Weak 3.0 – 4.0 2.0 – 2.99 1.0 – 1.99 I II III High 3.0 - 4.0External IV V VIFE Score Low 2.0 – 2.99 (2.85) VII VIII IX Medium 1.0 - 1.99 Generic Goal: Hold and Maintain Strategies: Market Penetration Product Development Integration (Horizontal, Forward, backward)
  8. 8. SWOT Matrix Strength – S Weakness – W Major player in local market Disconnected & dispersed technical employees Strong relationship with government and private sector Poor marketing plan JCCS presence/reach across Kingdom Poor strategy and target responsibility Partnership with major players Bad reputation in services JCCS success stories will help in getting projects No knowledge management Services projects bundled with hardware sales Technical infrastructure not ready Existing customer base can generate repeated sales Org. structure not suitable for Functional excellence Technical expertise pool Delays and gap in inter-department communication Management Expertise Financial ResourcesOpportunities – O SO Strategies OW Strategies Market Penetration and Market Product & Service Development DevelopmentIT Service Market expected to be US$ 1350mn in 2012 using market opportunitiesCompanies are unable to generate insight from data Offer new services to existingIncreasing trend in business aligned IT/IS customers Build and develop teamsCompanies are looking to reduce cost by outsourcingCustomers IT staff is under staff or lacks skills Strategic alliance with service providers Improve and standardizeInternational vendors need local partner Sales promotion processes in new projectsThreats - T TS Strategies TW Strategies Horizontal Integration &Increased competition Outsource Projects Service improvement andDifficulty in finding and retaining skill staffGlobal financial crises horizontal integrationMergers and Acquisitions of vendors Improve Subcontract and CRVendors coming in service industry management processInternational service companies presence in KSA
  9. 9. BCG Matrix Relative Market Share Position High Medium Low 1.0 .50 0.0 High Stars Question Marks +20 ProdIndustry Sales Growth Rate D Prod C Prod B Prod E Medium Prod 0 A Low Cash Cows Dogs -20
  10. 10. SPACE Matrix – (Strategic Position and Action)Space Matrix Rating Score Rating ScoreFinancial Strength (6 best, 1 worst) Environmental Stability (-1 best, -6 worst)1. Working Capital 5 1. Economic Changes -22. Leverage 6 2. Government Control -23. Cash Flow 5 3. Risk Premium -34. Payable to Customers 6 4. Price Elasticity -35. Debt to Asset 5 5. Inflation -2 27 5.4 6. Competition -2 -14 -2.3Competitive Advantage (-1 best, -6 worst) Industry Strength (6 best, 1 worst)1. Customer Loyalty -3 1. Growth Potential 52. Market Share -3 2. Profit Potential 43. Quality of Service -3 3. Consumer Trust 54. Number of products -2 4. Investment Reliability 55. Technical Expertise -1 5. Resource Utilization 4 -12 -2.4 23 4.6CA and IS 2.2FS and ES 3.07
  11. 11. SPACE Matrix FS Conservative Aggressive +6 +5 +4 +3 IS & CA 2.2 FS & ES 3.07 +2 +1CA IS -6 -5 -4 -3 -2 -1 -1 +1 +2 +3 +4 +5 +6 -2 -3 -4 -5 Defensive Competitive -6 ES
  12. 12. Grand Strategy Matrix RAPID MARKET GROWTH Quadrant II Quadrant I 1. Market development 1. Market development 2. Market penetration 2. Market penetration 3. Product development 3. Product development 4. Horizontal integration 4. Forward integration 5. Divestiture 5. Backward integration 6. Liquidation 6. Horizontal integration 7. Concentric diversification WEAK STRONGCOMPETITIVE COMPETITIVE POSITION Quadrant III Quadrant IV POSITION 1. Retrenchment 1. Concentric diversification 2. Concentric diversification 2. Horizontal diversification 3. Horizontal diversification 3. Conglomerate diversification 4. Conglomerate diversification 4. Joint ventures 5. Liquidation SLOW MARKET GROWTH
  13. 13. QSPM – Quantitative Strategic Profiling Matrix Build and Promote Outsource IT ABC Units and Limit ABC team and Services projects to Weight assign projects projects partnersKey Internal Factors AS TAS AS TAS AS TASStrengthsMajor player in local market 0.02 3 0.06 3 0.06 3 0.06Strong relationship with government and private sector 0.02 4 0.08 4 0.08 4 0.08JCCS presence/reach across Kingdom 0.02 4 0.08 4 0.08 4 0.08Partnership with major players 0.02 3 0.06 3 0.06 3 0.06JCCS success stories will help in getting projects 0.01 3 0.03 3 0.03 3 0.03Services projects bundled with hardware sales 0.10 3 0.30 3 0.30 3 0.30Existing customer base can generate repeated sales 0.02 3 0.06 3 0.06 3 0.06Technical expertise pool 0.10 3 0.30 3 0.30 3 0.30Management Expertise 0.20 3 0.60 3 0.60 3 0.60Financial Resources 0.02 4 0.08 4 0.08 4 0.08Weaknesses 0.00 0.00 0.00Disconnected & dispersed technical employees 0.10 4 0.40 2 0.20 0 0.00Poor marketing plan 0.10 4 0.40 1 0.10 0 0.00Poor strategy and target responsibility 0.10 4 0.40 1 0.10 0 0.00Bad reputation in services 0.05 4 0.20 1 0.05 0 0.00No knowledge management 0.03 4 0.12 1 0.03 0 0.00Technical infrastructure not ready 0.01 4 0.04 1 0.01 0 0.00Org. structure not suitable for Functional excellence 0.03 4 0.12 1 0.03 0 0.00Delays and gap in inter-department communication 0.05 4 0.20 1 0.05 0 0.00SUBTOTAL 1.00 3.53 2.22 1.65Key External FactorsOpportunitiesIT Service Market expected to be US$ 1350mn in 2012 0.20 3 0.60 1 0.20 3 0.60Companies are unable to generate insight from data 0.05 3 0.15 1 0.05 3 0.15Increasing trend in business aligned IT/IS 0.05 3 0.15 1 0.05 3 0.15Companies are looking to reduce cost by outsourcing 0.20 3 0.60 1 0.20 3 0.60Customers IT staff is under staff or lacks skills 0.10 3 0.30 1 0.10 3 0.30International vendors need local partner 0.05 3 0.15 1 0.05 3 0.15ThreatsIncreased competition 0.10 2 0.20 1 0.10 3 0.30Difficulty in finding and retaining skill staff 0.05 2 0.10 1 0.05 4 0.20Global financial crises 0.05 4 0.20 2 0.10 3 0.15Mergers and Acquisitions of vendors 0.05 2 0.10 3 0.15 4 0.20Vendors coming in service industry 0.05 2 0.10 2 0.10 3 0.15International service companies presence in KSA 0.05 2 0.10 2 0.10 3 0.15SUBTOTAL 1.00 2.75 1.25 3.10SUM TOTAL ATTRACTIVENESS SCORE 2.00 6.28 3.47 4.75
  14. 14. Balances Scorecard for Strategy ExecutionFramework that translate strategy into operational objectives and drive performance
  15. 15. ABC Top Issues Low Internal awareness and Buy-In All ABC projects are being out-sourced Outsourced employees are working in their on islands Goals and Responsibility  No one is responsible for winning ABC projects  No marketing plan for ABC  No clear Goals/responsible No clear Road map Communication delays and gaps with head office The vision must be followed by the venture. It is not enough to stare up the steps - we must step up the stairs. (Vance Havne)
  16. 16. Strategic Action List •Time bound revenue goals and responsibilities •Performance goals Goals and Responsibility •Promote and Develop ABC •JCCS management should be informed about ABC Vision and Services and their part in ABC Success Communication •All outsourced technical staff should be informed •Marketing Team (all regions) should be aware of ABC services •Specialized virtual team for ABC marketing should be nominated Marketing •Time bound Target – reward for ABC marketing should be set Initiatives •Marketing Mix Strategy •Build virtual team of DBAs, Developers, Analyst … •Develop and motivate team members •Make Email groups , make Internal websites Prepare Virtual Team •Share knowledge and arrange training sessions •Document standard procedures •Prepare Virtual NOC •Prepare True DR Site Prepare Infrastructure •Prepare multiple ISP Solution 16
  17. 17. Marketing Mix •Software Development •Personal Selling •Database Consulting •Sales Promotion •Onsite/remote •Gap Analysis •Infrastructure Mgmt • Health/Security check •BI Consulting • Free DB Management •Pilot Project Product Promotion Place Price •ABC channels will be • Initially market JCCS Marketing Team penetration pricing •All region •Try to Lock Customers •JCCS Support Team at •Value Based Pricing client •Push Strategies 7 Ps – People, Processes, Physical Environment 17
  18. 18. Scorecard and Cause-effect Terms And Realize the Vision Financial To Drive Financial Results Success... Customer Benefits Needed to Deliver Unique Sets of Benefits to Customers... Internal To Build the Strategic Capabilities.. Capabilities Knowledge, Skills, Systems, and Tools Equip our People... 18
  19. 19. Building Blocks Financial Perspective 1. The economic model of Return on key levers driving financial Revenue Investment Productivity performance Strategy Strategy Sources of Growth Sources of Productivity Customer Perspective 2. The value proposition of Value Proposition target customers Relation- Price Quality Time Function Image ship Internal Process Perspective 3. The value chain of core “Build the “Make the “Deliver the “Service business processes Brand” Sale” Product” Exceptionally” Learning & Growth Perspective 4. The critical enablers of Staff Climate for performance improvement, Technology Competencies + Infrastructure + Action change and learning 19
  20. 20. Balanced Scorecard Six Step Development Process Step 3Step 1 Step 5 Draft aDevelop a Strategy Map Select StrategicProject Plan With Linkages Initiatives And Themes Step 2 Step 4 Step 6 Build a Determine Plan for Strategic Measures and implementation Architecture Targets of the SFO 20
  21. 21. Summary• Evaluation shows that ABC initiative have good potential• Internal awareness and marketing of ABC• Clear goals with responsibilities• Virtual restructuring and readiness 21

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