Understanding Growth and Strategies for Business Expansion
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This slide deck was presented by Vinod Manvi (Saviore Faire) at the TiE Institute Knowledge Series session for Growth Stage Entrepreneurs for Scaling Up
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Understanding Growth and Strategies for Business Expansion
- 1. 1 Vinod Manvi Principal Consultant Savoir faire Management Services Pvt Ltd Evaluating Potential-Understanding Scale & Growth October 23, 2010
- 2. 22 Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
- 3. 33 Growth Object of Growth Bigger,Larger,Stronger,Higher Smaller,Leaner,Flexible,Faster The impossibility of Freeze Frame Questions – Growth for Grow into
- 4. 44 Growth Metamorphosis When Where How much Outcome
- 5. 55 Metamorphosis When Is the time to grow now or later? Indian condition – demographic boom The Exponential Rule-doubling time Where Products Sectors
- 6. 66 Metamorphosis How much Volume Value Rate Outcome Financials Non-Financials
- 7. 77 Key Points Purpose Vantage Point Be in the driver’s seat Desired Outcome
- 8. 88 Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
- 9. 99 Understanding Scale & Scope Economy of Scale Economy of Scope
- 10. 1010 Understanding Scale Economies of Scale Mass Production Lower transaction frequency Seeks to lower per unit cost Size matters Basics Designing of business Concept of “Sunk Cost”
- 11. 1111 Understanding Scope Economies of Scope Increased Customisation Thrives on Flexibility High Product Proliferation Small is beautiful Basics Market/Customer oriented Limitations of volume
- 12. 1212 Considerations of Business Design Timing Funding Resources
- 13. 1313 Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
- 14. 1414 Growth Strategies The tasks of Strategic management Develop Strategic Vision and Business Mission Set Objective Prepare strategy to achieve objective Implement or Execute above strategy Evaluate Performance Revise all of the above whenever needed
- 15. 1515 Growth Strategies Generic Strategies Cost Leadership Differentiation Focus Benchmarking Continuous Improvement
- 16. 1616 Growth Strategies Moving beyond generic strategies Continuity of strategy Continual Innovation Choosing new battlefields
- 17. 1717 Moving Beyond Generics Continuity in Strategy Cost Leadership- Lowest cost to Best Value Alliances 360 degree integration Continual Innovation Definition of Ever changing Customer Value Transfer of Passion Speed
- 18. 1818 Moving Beyond Generics Choosing new battlefields Understanding hidden Value Creating “Blue Oceans”. Granularity of Customisation
- 19. 1919 Key Points The strategic management process Understanding and implement Generic strategies Go beyond the Generics Revise whenever needed
- 20. 2020 Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
- 21. 2121 Key functions Seek to serve Seek to operate Seek to earn Seek to manage
- 22. 2222 Key Functions Seek to serve Seek to operate Seek to earn Seek to manage • Customers • Markets • Sales •After Sales •Customer Support • Operations • Production • Quaility of Output • Delivery• Managing Money • Costing • Working Capital • Resource Planning • Recruitment & Staffing • Training and Development
- 23. 2323 Key Functions Seek to serve Seek to operate Seek to earn Seek to manage •MARKETING •OPERATIONS • FINANCE • HUMAN RESOURCES
- 24. 2424 Key functions Marketing Marketing Plan Brand Building Sales Promotion Finance Funding Options Investment Mix Working Capital Management
- 25. 2525 Key functions Operations Systems thinking Ensuring Quality and Performance Managing Costs
- 26. 2626 Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
- 27. 2727 Sustainability Clarity of thought Consistency in action Inequity in effort
- 28. 2828 Clarity of thought Clarity of purpose of growth Clarity about implementability of the plan Built in scalability considerations of the plan Built in flexibility in the plan
- 29. 2929 Consistency in Action Consistency in the thought processes Consistency in the key functions Consistency in monitoring of functions
- 30. 3030 Inequity in action Understanding the current and near future focus areas Adjusting the emphasis based on the current needs Having a plan B ready. Taking time off to reflect- and act swiftly whenever required.
- 31. 3131 Road Map Understand what growth means to us Understanding Scale/Scope Strategies for growth Key functions Achieving Sustainability What to do “now” ?
- 32. 3232 Key points for action Articulate the purpose of growth Have some clarity of the kind of organisation that you wish to grow into Articulate what kind of economy that you wish to adopt Articulate broadly the kind of strategy for growth Have a vision of how and what your key functions will look like Make a business plan for growth
- 33. 33 Vinod Manvi Principal Consultant Savoir faire Management Services Pvt Ltd Starting Up – Creating a Business Plan June 19, 2010
- 35. 3535 Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
- 36. 3636 Customer of the Business Plan Long Term Investor Lender Venture Capitalist/ Private Equity Customer Yourself Long Term Profit Earning Potential Scalability; Exit Will my money be safe? Intention of showing the Business Plan to the Customer?! Convincing yourself
- 37. 3737 Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
- 38. 3838 Balance Sheet Basics Money Required Fixed Assets Working Capital Money Funded Share Capital + Reserves Loaned Funds Net Worth Source of Funds Application of Funds Financing Investing
- 39. 3939 Egg or Hen? This is what I require…. ஃ this is the funding required ……. OR This is the funding available … ஃ this is what I’ll do with that fund
- 40. 4040 Sourcing options Venture Capital Seed Capital Angel Investor Private Equity Lender Boot Strap • Long Term • Managerial and Tech expertise • High risk, High return • Long term influence in the venture • Friends and relatives • Pre-revenue stage • To attract the attention of the Venture Capital • To get the business off the ground •“At risk” investment of promoters • More favourable terms than other type of investors • For the person than the project • Focus on helping the business succeed than huge profit for the future • Not quoted on exchanges • Revival, multiple investors • Buy, Strip and Flip • Building company from own finances
- 41. 4141 Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
- 42. 4242 Market or Capabilities Key factor/ Limiting Factor/ Constraint I know the size of the market I am going to address I know the amount I require to run my business to start with
- 43. 4343 Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
- 44. 4444 Assumptions Ockham’s razor (Pluralis non est ponenda sine neccesitate) Explicit vs implicit assumptions Understand the domains of control and influence Info.Sources Growth Timing Controls Valid Assumption
- 45. 4545 Beyond Influence & Control Within Sphere of Influence Domains of Influence and control Within Span of Control
- 46. 4646 Assumptions Assumptions proving incorrect Mistrust the obvious Ockham’s razor (Pluralis non est ponenda sine neccesitate) Explicit vs implicit assumptions Understand the domains of control and influence Info.Sources Growth Timing Controls Valid Assumption
- 47. 4747 Road Map Understand the “Customer” of the Business Plan Egg or Hen – starting point for the business plan Where do I start? – Market or Capabilities Assumptions Tie-up the loose ends
- 49. 4949 Sales Plan Product ion Plan Cost Plan Projected Profit and Loss Account Invest ment Plan Debt/ Equity Plan Projected Balance Sheet Cash Flow Statement Milestone reporting Assumpti ons Charts/ Graphs and Pictures Critical Annexures
- 50. 5050 What makes a good plan? Simple Is it easy to understand and to act on? Does it communicate its contents easily and practically? Specific Are its objectives concrete and measurable? Does it include specific actions and activities, each with specific dates of completion, specific persons responsible and specific budgets? Simple Specific Realistic Complete Follow up Actions Results Plan • Realistic • Are the sales goals, expense budgets, and milestone dates realistic? Is the plan complete? • Complete • Does it include all the necessary elements?
- 51. 51 Have a satisfied customer to have satisfied investor Thank you vinod@sfccostmanagment.com www.sfccostmanagement.com +919867851919