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Strategy, Business Model & Business Plan. IEI Business Plan Workshops. Business plan outline Technology Plan Management & Organization Social Responsibility Development & Milestones Financials

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strategy business model business plan

Strategy, Business Model & Business Plan

IEI Business Plan Workshops

business plan outline www sbm temple edu iei word planigenttemplateoutline 003 doc
Business plan
  • Technology Plan
  • Management & Organization
  • Social Responsibility
  • Development & Milestones
  • Financials
    • Including Capital Requirements & Financial Statements
  • Appendix
  • Executive Summary
  • Company Description
    • Including product/service & technology/core knowledge
  • Industry Analysis & Trends
  • Target Market
  • Competition
  • Strategy/Business Model
  • Marketing and Sales Plan
  • Production/Operations Plan
strategy funnel

Environmental Trends

Customer &Benefits









Strategic Positioning

Strategy funnel

Goal: Articulate and execute long-term, defensible offer of unique value to customers

what is strategy

Strategic Management

  • Strategic Position
  • Strategic Navigation
What is strategy?
  • Plan
  • Process
  • Position
  • Pattern
  • Perspective
  • Procedure
  • Play
  • Ploy
  • Strategic Tactics
strategic management

Environmental Scanning


Evaluation &Control



Strategic management


  • Disciplined, iterative process of driving towards vision, by finding or making and maintaining a defensible space or trajectory in a given businessenvironment.
strategy checklist
Strategy checklist
  • Vision
  • Value proposition
  • Position or direction
    • Structure or resource base
  • Revenue & business model
  • Timeline or guidelines
  • Fit
value proposition
Value proposition
  • Specific, concrete offer of benefits
    • Price, quality, convenience, choice, cost-savings, reliability, etc
  • To precisely defined customers
    • Who recognize that the offer solves a problem for the
    • EG: Our clients grow their business, large or small, typically by a minimum of 30-50% over the previous year. They accomplish this without working 80 hour weeks and sacrificing their personal lives.
  • Stable core
    • Mission: Central audience + core product/service
    • Ideology: Values, principles, culture
  • Focused ambition
    • Concrete picture of successful impact
    • Serious, scary stretch goals
    • Disciplined experimentation
vision exercise
Vision exercise
  • Stable core
    • Mission:
    • Ideology:
  • Focused ambition
    • What success will look like – in the marketplace:
    • One audacious goal:
position or navigation
Position or navigation?
  • Position Strategies
    • Unique, valuable, defensible position in a market or industry
    • Supported by a tightly integrated value chain / activity system
    • Good for relatively stable industries/markets
  • Navigation Strategies
    • Vision-driven nurturing and leveraging of core resources
    • Supported by tight culture and explicit learning
    • Good for dynamic industries/markets
strategic positions require niches
Strategic positionsrequire niches
  • A niche includes the market the firm is uniquely qualified to serve

External Opportunities& Threats


Internal Strengths & Weaknesses

strategic situation
Strategic situation



regulatory, technological

& community



dynamics, &


Unmet customer needs & desires

External Factors

Strategic Situation

Resources (know-how, people, money, etc)

Competitive position (through customers eyes & in industry)

Vision, values



Internal Factors

match sw to ot
Match SW to OT




Weaknesses (W)



Opportunities (O)

SO Strategies


WO Strategies


Use strengths to

take advantage of


Offset weaknesses

to take advantage

of opportunities

ST Strategies


WT Strategies



Use strengths to

avoid threats

Min. weaknesses to avoid threats

otsw exercise




External Factors

Strategic Situation


Competitive Position


Internal Factors

OTSW exercise
  • Map SW to OT..
classic position strategies
Classic position strategies
  • Cost (price) leadership
    • Efficiency and scale
  • Differentiation
    • Quality, design, support/service, image -- that make a product or service special
  • Focus
    • Explicit tie to a broad or narrowmarket segment
  • Cost (price) leadership
    • Dell Computers (logistics, volume)
    • Motel 6 (location, services, salespeople).
    • Southwest Airlines (corporate culture, service)
  • Differentiation
    • Quality (Mercedes)
    • Design (Apple)
    • Service (Nordstrom).
    • Image (Nike).
    • Special niches (Zitner’s candied apples; independent films)
  • Focus
    • Broad (Wal-Mart - rural)
    • Narrow (NSP - activists, NRI - network administrators)
    • Segmented (Computer security – spooks and commerce, Financial services – rich, poor and in-between.)
  • Penetrate new markets
    • Insurance in India.
  • Develop new markets
    • Ice hotels
  • Develop new products
    • Gillette. Intel.
  • Become indispensable
    • Microsoft. Best subcontractors.
  • Fortify
    • Borders wholesalers. B&N’s leases.
value discipline positioning
Value discipline positioning

Product Leadership

  • (Differentiation)

Operational Excellence

  • (Cost Leadership)

Customer Intimacy

  • (Focus)
value disciplines
Value disciplines

Product Leadership - Compete on Speed

  • Good design, great execution
  • Educate & lead the market
  • Ad hoc, risk oriented culture
  • Organization designed for innovation

Operational Excellence - Compete on Scale

  • Low price, limited options, ultimate convenience
  • Managed customer expectations
  • Measurement culture
  • Processes & transactions continually redesignedfor efficiency
value disciplines1
Value disciplines

Customer Intimacy - Compete on Scope

  • Offerings tailored to customers & segments
  • Deep insight into customer needs
  • Problem solving service culture
  • Full range of services, so customers stay
  • Breakthrough thinking, unique solutions
position strategy exercise

Product Leadership

  • (Differentiation)

Operational Excellence

  • (Cost Leadership)

Customer Intimacy

  • (Focus)
Position strategy exercise

Choose a position strategy and explain how you will achieve it.

strategic positions require fit
Strategic positions require fit
  • Fit refers to the integration of every part of firms’ internal structures to better serve a niche.
  • Well-positioned firms craft themselves to serve niches better than others.
fit entrepreneurial advantage
Fit: Entrepreneurial advantage
  • Possibility of crafting a perfect fit between specific opportunities and internal capabilities
  • Firms that fit opportunities extremely well have an advantage over bigger, stronger opponents…
  • Examples:
    • Dollar Express vs Dollar Tree
    • Youthbuild vs School District
    • Giovanni’s Room vs Borders
value chain

Human Resources





Value chain

After SalesService


  • A strong value chain is a cross-linked net of activities that affects the cost or performance of the whole.
  • Supporting a strategy by optimizing both individual functions and the links between them to support a strategy yields a powerful, durable, hard-to-duplicate advantage.




activity system
Activity system
  • A less linear way of thinking about the internal fit that supports strategy.
  • Map crucially interrelated features and functions that define a firm’s unique skills and strategy.
  • Support competitive advantage with reinforcing patterns or systems.
ikea s activity system




Low MfgCost

High-traffic store layout

Design focused on low cost

Most items in stock

Year-round stocking

Flat packing kits


Limitedsales staff

Customer loyalty

Self -assembly

Suburban Location

On-site inventory

Easy to make

Wide variety

Long-term suppliers

Easy transport

Impulse buying

Explanatory labeling

Ikea’s Activity System
experience curve
Experience curve
  • For positional strategies, experience is the ultimate source of advantage.
  • Experience fuels the tacit knowledge that drives productivity improvements, innovations, elaborations of strategy, etc
  • Successful firms are especially good at creating the social and institutional structures that support the shared development of such tacit knowledge
fit exercise
Fit exercise
  • Draw the value chain for your firm
  • Note reinforcing (and jarring) pieces
  • Try to create more reinforcements


  • Jot down functions and features
  • Look for patterns and connections
  • Try to crystallize patterns
business model
Business model
  • A business model describes what a firm will do, and how, to build and capture wealth for stakeholders
  • Effective business models operationalize good strategies -- turning position and fit into wealth
effective business models build capture wealth
Effective business models build & capture wealth
  • Build wealth:
    • By efficiently (profitably) transforming inputs into something that customers value enough to pay for – again and again and again
    • By supporting growth
  • Capture wealth:
    • By siphoning off some of the accumulated wealth for stakeholders
    • And by developing recognizable value – strategic positions, know-how, customers, free cash flow, lifestyles, social impact – that can be captured
effective business models require hard choices
Effective business models require hard choices
  • About who matters
    • Owners, investors, family, workers, community
  • About what kind of wealth matters
    • Financial capital, social capital, intellectual, cash, good life, rich family life, entrepreneurial impact, social impact
  • About the strategy that will deliver the wealth that matters to the stakeholders that matter
  • About the structure that supports strategy
business models start with what the world gives
Business models start with what the world gives

1.Describe the landscape:

  • Porter
  • Environment, industry, and relevant trends.

2. Paint in competitors:

  • Competitor table. Perceptual maps.
  • What do you need to play? How do competitors compete? What opportunities exist?

3. Identify strengths & weaknesses

  • Vision, skills, core technologies
business models are based on strategy
Business models are based on strategy

4. Identify stakeholders you must serve

  • Owners, family, workers, community

5. Identify the wealth you will capture

  • Capital, good life, family life, fameentrepreneurial effectiveness, social value

6. Choose a position or approach

  • And elaborate a strategy to realize this
  • Especially a revenue model
business models define structure
Business models define structure

7. Sketch a structure to operationalize the strategy

  • Value chain, activity system, culture, simple rules

8. Work out the implications

  • Functional strategies
  • Timeline and milestones
  • Financial projections & capital needs
  • Path to profitability, sale, or other realizationof value
build a business model exercise
Build a business model exercise
  • Opportunity
  • Stakeholders
  • Wealth
  • Strategy
  • Model
    • Structural implications, timing, capital needs, etc
good execution is more important than good strategy
Good execution is more important than good strategy!
  • Seeing a position or approach is fundamentally creative
    • Immersion, scenarios, future search,
  • Constructing a strategy involves careful analysis and planning
  • Executing a strategy requires relentless discipline
  • Verna Allee, “Reconfiguring the Value Network,” The Journal of Business Strategy, 21 (4), PP 36-39.
  • R Boulton, B Libert, S Samek, “A Business Model for the New Economy,” The Journal of Business Strategy, 21 (4), July-August 2000, pp 29-35.
  • James Collins & Jerry Porras, Built to Last (HarperBusiness, 1994).
  • Richard D’Aveni, Hypercompetition (Free Press: 1994).
  • Kathleen Eisenhardt & Donald Sull, “Strategy as Simple Rules,” Harvard Business Review, January 2001.
  • Mark Feldman & Michael Spratt, PWC, Five Frogs on a Log: A CEO’s Guide to Accelerating the Transition in Mergers, Acquisitions and Gut Wrenching Change, (HarperBusiness 1999).
  • Craig Fleisher & Babette Bensoussan, Strategic and Competitive Analysis (Prentice Hall, 2003).
  • Pankaj Ghemawat, Strategy and the Business Landscape (Prentice Hall, 2001).
  • G. Hamel & C. K. Prahalad, “Strategic Intent,” Harvard Business Review, May-June 1989.
  • Robert Hamilton lecture notes, 1998.
  • Robert Hamilton, E. Eskin, M. Michael, "Assessing Competitors: The Gap between Strategic Intent and Core Capability", International Journal of Strategic Management-Long Range Planning, Vol. 31, No. 3, pp. 406-417, 1998


bibliography continued
Bibliography (continued)
  • TL Hill lecture notes, 1999, 2001, 2002
  • J. D. Hunger & T.L. Wheelan, Essentials of Strategic Management (Prentice Hall, 2001).
  • Ivan Lansberg, Succeeding Generations (Harvard Business School Press, 2000).
  • B. Mahadevan, “Business Models for Internet-based E-Commerce,” California Management Review, 42 (4), Summer 2000, pp 55-69.
  • Henry Mintzberg & James Brian Quinn, Readings in the Strategy Process, 3rd Edition (Prentice Hall, 1998).
  • Henry Mintzberg & Joseph Lampel, “Reflecting on the Strategy Process,” Sloan Management Review, Spring, 1999.
  • Alex Moss, Praxis Consulting presentation on worker ownership, 1999
  • Sharon Oster, Modern Competitive Analysis, 2nd Edition (Oxford University Press, 1994).
  • Michael Porter, Competitive Advantage (Free Press, 1985).
  • Michael Porter, “What is Strategy?”, Harvard Business Review, November-December 1996.
  • Jim Portwood lecture notes, 1998.
  • C.K, Prahalad & G. Hamel, “The Core Competence of Corporations,” Harvard Business Review, May-June, 1990.
  • Pamela Tudor, Notes on responsibility charting, 1999