Stretegic Thinking - the Tool for Mastering the Future Viktor Vauhnik – RECO d.o.o.

1. 2nd Conference on Management and OrganizationOrganizational Changes for Dynamic StabilityThe Slovenian Academy of ManagementBrdo, June 8th, 2012 Stretegic Thinking- the Tool for Mastering the Future Viktor Vauhnik – RECO d.o.o.

2. Stretegic Thinking- the Tool for Mastering the Future • Strategic thinking is very important basic tool focuses on finding and developing unique opportunities to create value, company’s mission and vision and unique competitive strategies to survive. • The strategic thinking is present in an organization, when we are aware of the necessity and the complexity of changes, when we know how to anticipate events in our environment and how to manage competitive advantages of the company.

3. Quality tools are our passion… We can talk about strategic thinking in its broadest sense among employees who can affect a company’s direction, when they understand and co-create the mission, vision and changing of the organization by creative dialogue about critical factors for the development of the company.

4. Small Shops seem more friendly as Their Big Brother These critical factors for the company’s development are: • Products and Offerings (what is the portfolio of offerings - products, services, price, image.., what makes them unique…), • Environment an Industry (what is the structure of the industry, what is our position in the industry, what do we want it to be…), • Competencies and Skills (what are company’s strengths, what are weaknesses, what is it’s unique competitive advantages…), • Market and Customers (who are the target customers, what are their needs, how is the company qualified to meet these particular needs..), • Competitors and Substitutes (how are our main competitors similar or different from us, what are the competitor’s unique strengths and strategies..), • Suppliers and buyers (what is their relative power compared with us…).

6. Different skills and competences reflect different attitudes to the strategic thinking • Companies – their management team and other employees have different skills, different sensitivity and flexibility and reflect different attitudes to the strategic thinking. • They achieve their mission, their vision and strategic plans with different approaches. Different sensitivity and flexibility reflect their character, their culture and actual level in the process of strategic thinking. • We can divide companies in four different groups according to their capabilities and competencesof detecting and managing changes.

7. In the first group are companies facing difficulties by steering their energy into a veryshort term action –how to reduce the number of employees, how to increase a sales, how to cut the costs and / or how to provide long term financing and / or how to find a strategic partner.

8. In the second group are companies that are aware of market changes dictated by competition and of the changes in expectations of clients – but they are not managing changes effectively and on time. Short term expectations and satisfactory achievements in the past dominate their climate.

9. In the third group are companies which understand the necessity and the meaning of changes on time and are aware of changes in behaviour and needs of clients, of new technologies and of fast competitors growth. These are focused on long term development of product, providing new market niches and enhancing the higher speed in their competitive advantages and profitable business in the future.

10. Dozens of innovations and the mini consumer trends • And in the last group there are companies able to predict the development of business environment and capacities and requests of individual participants in the near future. Such companies always posses superb knowledge and their marketing and technical orientation has to be linked to higher level of intuition as a result of many years of focusing in certain activity.

11. Solutions and successful steps taken by visionary companies in the retail industry • Urban policy in cities (urban planning, new shopping centers vs. redesign the old ones) • Logistic and supply chain strategy (sources of supply on the domestic and neighbouring markets) • Packaging (minimising the use of the harmful material) • Sales promotion and marketing attractions (no more using mass marketing, aggressive flyers and mass advertisements) • Store layout concepts and designed of stores,appropriate size with rational – nice looking atmosphere)

12. Expected Changes in the Retail Industry over the next Decade • Strategic thinking as a way of understanding the expected changes in the retail industry opens unique opportunities where visions and challenges have to concern:

13. Strategic thinking as a way of understanding the expected changes in the retail industry opens unique opportunities where visions and challenges have to concern: • 1. Introducing new innovative products and services,diversifying global sales program, testing different operating models, ensuring a local touch.

14. Strategic thinking as a way of understanding the expected changes in the retail industry opens unique opportunities where visions and challenges have to concern: • 1. Introducing new innovative products and services,diversifying global sales program, testing different operating models, ensuring a local touch. • 2. Targeting to individuals with perfect customised offers and tailor made benefits.

15. Strategic thinking as a way of understanding the expected changes in the retail industry opens unique opportunities where visions and challenges have to concern: • 1. Introducing new innovative products and services,diversifying global sales program, testing different operating models, ensuring a local touch. • 2. Target to individuals with perfect customised offers and tailor made benefits. • 3. Searching for new models of retailing with the integration of the local personalized services and on – line convenience.

16. Strategic thinking as a way of understanding the expected changes in the retail industry opens unique opportunities where visions and challenges have to concern: • 1. Introducing new innovative products and services,diversifying global sales program, testing different operating models, ensuring a local touch. • 2. Target to individuals with perfect customised offers and tailor made benefits. • 3. Searching for new models of retailing with the integration of the local personalized services and on – line convenience. • 4. Readiness for sustainability – the retail industry bears the responsibility of educating consumers about choices available in the market and create the new, higher standards for the ethical trading.

17. Expected Changes in the Retail Industry over the next Decade • In this context - Strategic thinking as a way of understanding the expected changes in the retail industry opens unique opportunities where visions and challenges have to concern: • Introducing new innovative products and services, diversifying global sales program and brands and testing different operating models aimed at improving customer experience and ensuring a local touch. • Targeting to individuals with perfect customised offers at the right time, at an acceptable price and tailor made benefits to the individual customer will be one of the winning factors in retailing in the nearest future. • Searching for strategies where retailers must design experiences that merge local, personalized service in physical store and on - line shopping (where on – line retailers win on prices, on virtual cloud of information for discovering and comparison, on transaction processes and convenience). (In the slide is shown on – line shopping by smart phones in Tesco in the corridor of a metro station in Seul). • Readiness for sustainability is one of the key development issues. The retail industry – as the main customer point of contact – bears the responsibility of educating consumers about the sustainability choices available in the market. Through global education programs a great many world class companies, such as one of the best examples ECO OPTIONS by HOME DEPOT, they help to educate the market about energy saving or recycling materials and create the new, higher standards for the ethical trading.