This document discusses evaluating business plans and models. It outlines an approach to analyze a firm's past performance and key drivers of success. These drivers are then used to study how well the business plan forecasts correlate with projected performance in future planning periods. As an example, the document shows charts comparing an unnamed Firm X's actual past performance data to its optimistic planned values for profitability, which exceed actuals by a factor of 5-6 despite unchanged key drivers.

1. Winning Business Models: Evaluating Business
Plans
• Further, we can use our approach to evaluate the consistency of
business plans on the corporate level and/or on the divisional level
• We analyze a firm‘s past performance and identify the key drivers of
performance/success
• We then take these drivers and study how well they are correlating with
the performance of the group for the planning periods ahead
• Example: Firm X
Source: H.Rüll © Dr. Hartwig Ruell – Senior Excellence 1

2. Winning Business Models: Business Plans of Firm X
Observation: whereas the actuals for
2012 are varying widely along the
regression line, the planned values for
the year 2013 are concentrated in the
upper right corner (high profitability)
Source: H.Rüll

3. Winning Business Models: Business Plans of Firm X
Observation: this chart shows the
profitability of firm X vs. one of the key
drivers of profitability of this firm.
Note the discrapency in the area
between the dotted lines: actuals vs.
planned values: although the key
drivers of profitability remain
unchanged, the planned profitabilities
(2013) exceed the actuals (2012) by a
factor of 5-6!
Source: H.Rüll