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Tactical Decision Making Model - WIP.pptx
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- 2. Do we entera new market? Objective • Market share • Economy of scale • Global footprints • Profitability Current Market Major player & Market Share Product Differentiation Barriers to entry Entering If Yes, how? Start from Scratch Acquisition Join Venture No Cost-benefit Analysis Analyze • Size • Growth Rate • Customer Segments
- 3. Industry Analysis toEnter/Diversify? Objective • Enter the market • Diversify the business • Current Scenario Market Life Cycle Performance Position within Industry Major players & market share Industry Changes Drivers Emerging? Maturity? Decline Growing? Declining? New players, technology, regulations brand, technology, size Supplier How many? Product Availability What’s going on in their market Future Players entering or leaving? Mergers & Acquisition Barriers to Entry, to Exit?
- 4. Mergers & Acquisition,Why? Objectives • Market Access • Boost Brand • Increase Market Share • Diversify Holdings • Pre-empt Competition • Taxes • Synergies • Cost Saving >> Reduction of Fixed or Variable cost • Cultural Integration • Distribution Channel Expansion Acquisition Costs Fair price? Can we afford it? Reintegration Cost What if economy sours Due Diligence/Risks Economy shape? Market and customers Industry / technology risk Competitive response Exit Strategy Hold for how long? Break it up or sell of its part? How to pay? Debt, Equity
- 5. Do we needa new product? Objective • Product Portfolio • Market Share • Customer Satisfaction • Profitability • Economies of scope R&D Product Substitution Product Fit & Patents Pros & Cons Market Strategy Cannibalization Customer base Customer Channels to reach Retain customer Financing Funding Can we support debt
- 6. How to decidea price? Competitive Analysis Competitor s price Substitution Consumer habits Price based costing Willingness to pay Hedonic benefits Supply & Demand Cost based pricing COGS Breakeven point Profit margin Objectives Market Share Profit
- 7. How to Growin your existing market? Objective • Market Share • Profitability • Customer base • Economies of scale • Brand name Growth Increase Distribution Channel Increase Product Line Increase Major Marketing Campaign Diversify Product & Services Acquire Competitors
- 8. Starting a NewBusiness? Market Competitor Regulations Management Core competency Advisory board Plans Barriers to entry Competitive response Channels generalist specialist Product Competitive edge Technology proprietary Customers behaviour Retaining them Finance Allocation of funds debts Other important measures • Market Size • Capital requirement
- 9. Responding to acompetitor? Objective • Gain advantage • Market Share • Profitability Competitive Analysis Competitor new product What’s changed? Have they picked up market share? Responses Increase our own profile with P.R campaign Acquire the competitor Merge with the competitor Copy the competitor Hire the competitor management
- 10. Sales and CostImbalance? Objective • Increasing Sales • Reducing Cost Increasing Sales Increase Volume Increase amount on each sale Increase Prices Create Seasonal balance Reducing Cost Breakdown costs Benchmark competitors Labour saving technologies Economy & Government policy
- 11. How to improvebottom line? Analysing Revenue Revenue Streams % of total revenue each stream represent Check the balance of percentages % changed lately if so why? Examine cost Identify major costs Major shift in costs Any cost out of line Benchmark against competition Volume Expand to new area Increase sales force Increase Marketing or reduce price Improve customer services
- 12. How to turnaround? Analyse information Whyfailing? - Products, Economy, management Industry Performance Competitor situation Access to capital Response Review business and operations Review service and products, are they out of date? Secure finances so next plan has a chance Review employee efficiency and requirement Revise short term and long-term goals Reassure shareholders, client and suppliers Prioritize goals to have small success asap. Objective • Healthy Operations • Avoid short term loans