Академический Документы
Профессиональный Документы
Культура Документы
RUDRA CHATTERJEE
*%
*%
* *
4 16 *
* *
2
* * *
0 *
-2 * * * 12
*
*
-4
-6 8 *
-8 Size of Bubble: Revenue Size of Bubble: Revenue
-10 4
20 30 *0 *0 *0 *0 *0 *0 *0 * * * * * *
Portfolio * Score *
Degree to which a company leverages a common set of capabilities across its different businesses
Sources: Booz & Company; Capital IQ; Bloomberg; Automotive analysis based on 2003-2007 financial data
Right to
Win
What are we going to
What do we need to do sell in this market and
well to deliver that value to whom?
proposition?
Winning companies align their strategic direction to the capabilities that make them unique.
They make hard choices about differentiation and stick to them.
Booz & Company
6
Case study
Value Pfizer redeemed the value built by PCH when it sold the business to J&J for an
Capture unprecedented $16.6Bn or 20.6 times EBITDA in 2006
Focus and dedication on creating a winning capabilities system in your way to play
Effectiveness Barriers for competitors who are less coherent, with less effective capabilities
Ongoing improvement engine for the few capabilities that matter
Provision of objective for the enterprise the value behind the portfolio
Focused
Direction of capital and attention to those opportunities that extend a capabilities lead
Investment Guide for both organic growth and M&A decisions
Pursuing growth
at all cost Basing portfolio
decisions on near-term
financial results
?
consumer insight, distribution Owned by PepsiCo
management, superior merchandising, Famous for its direct-store delivery system
shelf management and navigation in More than 40% market share
heavily regulated, state-based alcohol
market Although industry has some monopolistic elements
(aggressive pricing, distribution policies among chip
Experiencing a stagnant market for makers), regional presence of many large and small
beer manufacturers keeps it highly competitive
Familiar with selling pretzels and Key success factors in snack market include gaining
snacks to bars and restaurants shelf space, in supermarkets, convenience markets,
gas stations, etc. and flavor innovation
Continuous
innovation of new Skilful global consumer
products with store marketing to rapidly build
level response demand for initially
information going successful products
directly to R&D
Way to Play
Rapid innovation, distribution and marketing to stimulate and meet
customer snacking needs
Booz & Company
12
Products and services must fit a companys capabilities
system and way to play
Example: The Listerine Pocket Pack Story
Supply
* x
Chain ROIC
Categories
Expansion
(158 reviewed)
Category
Innovator Marketing Organic
x
Invested Plays
Trends Capital
Wellness and
Nutrition
Geographic
Sales
Convenience Solution
Value and (all markets) Risk
Provider * x
Premiumization M&A
Authenticity
Winners
Losers
# of Deals
N=169
N=169
Align
Grow or
Grow acquire
and Grow
and Expand
Financial
potential
Are we clear about how we choose to create value in the Are we investing in the capabilities that really matter to
Way to Play
marketplace? our way to play?
Do all our businesses draw on this superior capabilities
Can we articulate the three to six capabilities that
system?
describe what we do uniquely better than anyone else?
Capabilities
Do our organizational structure and operating model
System Have we defined how they work together in a system?
support and leverage it?
Do our strategy documents reflect this?
Does our performance management system reinforce it?
Do most of the products and services we sell fit with our
Have we specified our product and service sweet
capabilities system?
Product & spot?
Service Fit Are new products and acquisitions evaluated on the
Do we understand how to leverage the capabilities
basis of their fit with the way to play and capabilities
system in new or unexpected arenas?
system?
Articulate current way Assess way to play Choose the future way Detail specific Track progress and
to play, capabilities, options: ability to to play and associated implications for growth monitor ongoing
Activities
products & services succeed, risk, and capabilities system plays, cost & portfolio choices
and their coherence headroom/financials most likely to provide a Communicate vision Drive continuous
Establish viable Evaluate hypotheses right to win Identify needed improvement of the
alternative future ways based on value and operating model capabilities system -
to play and their success probability changes live coherence every
required capabilities Begin implementation day
Coherence Test
Example
Status quo Assessment of value Decided upon way to Prioritized growth Delivery of strategic
self-assessment created by & risk of play opportunities roadmap
Deliverables
Current market adopting each way to Roadmap to re-align Ongoing activity and
landscape including play option costs and products/ continued commitment
competitors ways to In-depth evaluation of services in support of the new
play & capabilities each hypothesis Action plan to fill way to play and
Key market trends including related critical capability gaps capabilities system
Initial hypotheses on capabilities, effect on Communication &
future ways to play products & services, implementation plan
and feasibility
Booz & Company
22
We have identified the power of coherence in many leading
companies
Examples of Coherent Companies
Just because a company can doesnt mean it should. Their A refreshingly new approach. Water naturally flows
books key insightthe idea of coherenceis of particular downhilland companies naturally slide into an incoherent
importance as companies face pressure to increase their strategy. This book teaches how to pump water uphill by
comparable sales year over year and begin to turn outside of orchestrating three elements for coherence: the way to play,
their core business to build revenue. distinctive capabilities, and the portfolio.
Michael Roberts, R. Gopalakrishnan,
Former President & COO, McDonalds Corporation Executive director, Tata Sons
For at least thirty years people have been trying to figure out
Here, at last, is a book that helps a CEO sort through the
how to build corporate strategy around a company's
many conflicting demands on him. The framework that
capabilities. Leinwand and Mainardi offer an elegant solution,
intrinsically links capabilities to strategy is clear; it makes
one that demonstrates the power of having all the pieces fit
sense; its practical; and, I know from experience; it works.
together into a coherent, focused way forward.
Saud Al Daweesh,
Walter Kiechel,
Group CEO of Saudi Telecom
Author, The Lords of Strategy
Sources: Endorsements for The Essential Advantage by Paul Leinwand and Cesare Mainardi, to be published in December 2009 by Harvard Business Review Press