These slide show part 1 of the generic approach called the Strategy Compass used in the book.

1. A Generic Approach to Strategic Management
Creating and Presenting Strategic Plans
Part 1

2. Case study: Company X
Year 2013 2014 Score
Information about its competitive position
Sales (£Mn) 9.15 10.12
Market Share (%) 10 10
Market Share Largest Competitor (%) 15 17
RMS BCG 0.67 0.59
Relative Quality (%) Inferior Inferior
Price Relative to Competition (%) 112 112
New Product/Sales (%) 5 5
R&D/Sales (%) 0 0
Marketing/Sales (%) 0.5 0.5
Competition Aggressive Aggressive
Information about how it uses its assets
Plant and Equipment (£k) 1,200 1,500
Sales/Total Assets 7.62 6.75
Number of Employees 45 52
Sales/Employees (£k) 203 195
Capacity Utilisation (%) 80 80
Degree of Integration (%) High High
Information about leadership and behaviour
Leadership skill Good Good
Labour Turnover (%) 0 0
Information about its markets
Market size (£Mn) 90 102
Volume growth rate (%) 12.5 12.5
No. of Immediate Customers accounting for
50% of Sales
150 140
% of Market held by 4 largest Companies 45 50
Typical Purchase Amount (£k) 30 33
Life cycle of product in market Mature Mature
% Employees in Trade Unions Nil Nil
Profitability
ROCE (%) 50 48
Question: What is your strategic
assessment of this company and
would you invest in it?
Answer: Yes or no.
Additional information
Quality: relative to competitors can
only be superior, equivalent or inferior.
Price: Equal to competitors is 100,
10% above competitors is 110 and
10% below competitors is 90.
Industry: Company X is in a
construction related market - that’s
all you need to know.
+ = Good, 0 = Neutral, - = Poor

3. •Only interested in winners
Sport and Business
•Need to pick winners
•Need to be a winner

4. Sport: Horse Racing

5. My Horse

6. Frankie’s Horse

7. Frankie Dettori
and
cart horses
and
Throroughbreds
and
You!
Business

8. Sport and Business

9. •Only interested in winners: Rory
Sport and Business
•Need to pick winners: Rory
•Need to be a winner:Rory

10. Par
Stroke
s
Abov
e
Par
Hand
i
-cap
Tim
e
Belo
w
Par
Actual
Actual below
par
Actual above
par Actual above
par
Handicap Returns to Part Over Time

11. •Long term factors determine a player’s success
Natural ability, age, dedication, coaching,(4 majors)
These determine your handicap
•Short term factors influence performance on the day
Hangover, mental attitude, fitness, health hunger etc.
These determine if you play above or below par
Golf and Business

12. ROCE
Above
Par
Par
ROCE
Time
Below
Par
Actual
Par
Actual below par
Actual above par
Actual above par
ROCE Returns to Part Over Time

13. •Long term factors determine every business’s profits
There are 4 major generic factors
These determine every business’s par ROCE
• Short term factors influence every business’s current profits
Management quality, motivation, competition, etc.
These determine if your profitability is above or below par
Winning in Business: Assumptions

14. •Apply the 4 long term generics - key
•Examine the short-term influences
Before the rules, a crucial consideration
How to always win in every business

15. •Surely every business is different
Yes....and.....No
The Winning Rules for Every Business

16. The End