Growth Strategy

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PowerPoint Diagram Pack
Growth Strategy Toolkit

This toolkit includes instructional slides and templates covering the following areas: -Growth challenges -Traditional strategy thinking (e.g. Porters Five Forces) -Modern strategy thinking (e.g. Blue Ocean Strategy) -A growth strategy project initiative (project approach, design, frameworks & analytics, deliverables) -Case examples
Competitive Scope
Broad Narrow
Competitive Advantage Lower Cost Cost Leadership Differentiation Differentiation
Cost Focus
Differentiation Focus
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Contents
Growth Challenge Traditional Strategy Thinking - Porters Five Forces Modern Strategy Thinking - Blue Ocean Strategy - Blue Ocean Examples Growth Strategy Project - Project Approach - Project Design - Analytics & Frameworks - Deliverables learnppt.com
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Questions & feedback? Email me dave@learnppt.com The diagrams in this pack are to be used by the original buyer only.
Contents
All companies are faced with the challenge of achieving sustainable growth
The Challenge Sustainable Growth
Not many companies achieve significant growth Fortune 500 median revenue growth rate between 1963 and 2003 is 6.3% in real terms and 10.2% in nominal terms Real revenue growth fluctuates more than Return on Invested Capital (ROIC) ranging from 1 to 11%
Most difficult for large companies
Large companies struggle to grow Excluding the first year, companies entering the Fortune 50 grow at an average of 1% above inflation over a 15 year timeframe Only 1/3 of the Fortune 500 are able to sustain top-line growth above GDP and generate returns above the S&P500 90% of them concentrated in 4 sectors (FSI, HC, Tech, Retail)
THISHigh-growth rates decay very rapidly IS A PARTIAL PREVIEW

Those that do, find it You can difficult to sustain
preview the full above 20% salesdocument and down to 8% Companies PowerPoint growth typically slide within 5 years, and down to 5% by the 10 year download it at http://learnppt.com/powerpoint/ marker
Source: The do-or-die struggle for growth, McKinsey Quarterly, 2005 November 3
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Growth is commonly inhibited by a lack of breakthrough ideas, balancing cost-out and margin trade-offs, and execution challenges
Growth Challenges
Current Situation Few breakthrough growth offerings identified Growth at the expense of profitability Lack of execution followthrough for growth initiatives
Focus is on existing markets and demand (e.g., line extensions, substitutes) Strategic Issues Consumers are increasingly sophisticated and hard to please Opportunities are defined by internal/operational capabilities
Benefit trade-offs are not made (e.g., the right mix of attributes) Pricing and cost structure are driven by competition Organizational structure is not in line with new business
Lack of committed financial resources Metrics and rewards based on current operations Structure and processes to develop and manage growth do not exist
THIS IS A PARTIAL PREVIEW

The Resolution Create customer value Align value proposition Effectively execute You(Value Innovation) the full operations/organization can preview with PowerPoint document and strategy download it at http://learnppt.com/powerpoint/
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Successful companies balance the competing demands of optimizing existing core businesses while building new ones
Framing the Growth Challenge
Horizon 2 Profit Horizon 1 Extend and defend the core business Core business of the company Critical to near-term performance, cashflow and profits Some growth potential, but typically will flatten over time Lay foundation for future growth Manage for profitability Stage Objectives Continuing innovation Build emerging businesses Time Build new business and streams of revenue Extend current business or move in new directions After a few years, these businesses should be accelerated to replicate success like the core Drive ventures to take root Replicate the PREVIEW IS A PARTIAL business model Seeds of the future businesses that will transform the industry New ideas backed by investments Could take form of research, alliances, pilots, minority stakes Eventually take hold (10 year horizon) Seed growth options Test business model Create viable options for future growth Horizon 3
Description
THIS Efficiency optimization
Managing for Growth requires
You can preview the full PowerPoint document and download it at Strong Operational Managers / http://learnppt.com/powerpoint/ Business Builders / Visionaries /
Leaders Entrepreneurial Value Creators
Unconventional Thinkers
Source: The Alchemy of Growth, Baghai, Coley and White, 1999.
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managing short and long-term thinking and investment to create growth-enabled organizations
Barriers to Growth
Horizons Under siege 1 2 3 Common Barriers Core business underperforming, lack ideas in the pipeline Need to earn the right to grow by putting the core business back on track
Losing the right to grow Running out of steam
Obsessive focus on new business without developing the core, spreading the organization and management thin Basic performance improvement in core required Strong focus on core business, but no focus on next big idea; businesses could mature, position could be threatened Start journey toward growth
Inventing a new future Generating ideas but not new businesses Failing to seed for the future
Due to external triggers (regulatory change, technology), company must transition out of core business to new space
Good core business THIS IS A PARTIAL PREVIEW with a lot of new ideas, but lack
initiatives to translating ideas into real businesses (Dot.com)
You can preview the full PowerPoint document and Have strong core and new businesses to drive returns download it at http://learnppt.com/powerpoint/ for several years, but lack institutional capabilities for
innovation
Source: The Alchemy of Growth, Baghai, Coley and White, 1999.
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Faced with challenges to grow profitably, we work clients to identify their path to value creation and innovation
Paths to Growth
Expand Into New Segments / Categories
Develop New Products/Brands Expanding Business Scope
Develop New Formats/ Channels
Expand Geographically Growth Opportunities Build, Buy, Ally
Improve/Change Value Proposition Solidify Customer Relationships Increasing Value from Current Business
THIS IS A Improve Pricing PREVIEW PARTIAL
You can preview the Penetrate markets with existing products and full PowerPoint document download it at http://learnppt.com/powerpoint/
Optimize Product Mix
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Contents
Traditional concepts of growth strategy are based on internal analysis and interpretation of the marketplace
Common Growth Concepts
Competitive Advantage
Prote Build Protect ct selectively Position and refoc Competitive us Position Manage Invest Manage Medium to Build for for earnings earnings Build Weak Divest Harvest selectively
Strong
Low Cost Broad Target
Differentiation
Competitive Scope
Narrow Target
Cost Leadersh Differenti ation ip
Focus
Focus on current business and capabilities Define opportunities by relative competitor position
McKinsey, General Electric, Shell
Low Medium High Attractiveness
M. Porter, Competitive Strategy
Dominant
Natural Development
Harvest
+ 50 %
Strong
Competitive Position
Stars
Favorable Selective Development Reorientation Reorientation Marginal
Question Marks
Growth
+5%
Unfavorable
Cash THIS IS A PARTIAL PREVIEW Dogs Cows
Look internally and to competitors, as opposed to customers, for growth options
Infancy
Arthur D. Little
- 10 % You can preview the full PowerPoint document and 10 1 0.1 Relative Market Share download it at http://learnppt.com/powerpoint/ Maturity
Divestment
Growth Maturity Ageing
Boston Consulting Group
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Traditional approach to growth strategy is based on the teachings of Michael Porternamely Porters Five Forces framework
Traditional Strategy Thinking Porters Five Forces
1. Potential new competitors Threat by new competitors
4. Suppliers Suppliers negotiation power
2. Competitors in the industry Rivalry among existing companies
5. Customers Buyers negotiation power
THIS IS A PARTIAL PREVIEW 3. Substitution You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/ Threat by
substitution products products
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Porters Five Forces assesses the attractiveness of an industry along each competitive force to determine the correct competitive strategy
Porters Five Forces
Threat of New Entrants
Barriers to entry: Economies of scale (including shared resources) Product differentiation (proprietary) Capital requirements Switching costs Access to distribution channels Cost disadvantages independent of scale Government policy Expected reaction of incumbent
Competitive Advantage Lower Cost Cost Leadership Cost Focus Differentiation Differentiation Differentiation Focus
Competitive Scope
Broad Narrow
Bargaining Power of Suppliers A supplier group is powerful when: It is dominated by a few companies and is more concentrated than the industry it sells to. There are no substitute products. The industry is not an important customer. Its products are important to the industry. Products are differentiated or suppliers have built up switching costs. It poses a credible threat of forward integration.
Intensity of Rivalry
Intense rivalry results from: Numerous or equally balanced competitors Slow industry growth High fixed or storage costs Lack of differentiation or switching costs Capacity augmented in large increments Diverse competitors High strategic stakes High exit barriers
Bargaining Power of Buyers A buyer group is powerful when: It is concentrated or purchases large volumes relative to seller sales. The products represent a significant fraction of the buyers costs or purchases. The products are standard or undifferentiated. It faces few switching costs. It earns low profits. It poses a credible threat of backward integration. The bought product is unimportant. It has full information.
Exit Barriers L H
Pressure from Substitute Products THIS IS A PARTIAL PREVIEW Search for products that can perform the same function. Assess buyers propensity to substitute. Focus on those that: Are improving their price performance trade-off compared with the industries products. Require low switching costs. Are produced by industries earning high profits.
Entry Barriers
L H
Low, stable returns High, stable returns
YouLow, risky preview the full PowerPoint document and can returns download it at http://learnppt.com/powerpoint/
High, risky returns
Take offensive or defensive actions to create a defensible position against the forces: Positioning the firm so its capabilities provide the best defence Influencing the balance of forces through strategic moves Anticipating shifts in the factors underlying the forces and responding to them
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Headline message
Porters Five Forces Template
INDUSTRY COMPETITIVE ASSESSMENT COMPETITIVE STRATEGY
New Entrants
Bullet point 1 Bullet point 2 Bullet point 3 Bullet point 4
Competitive Advantage Lower Cost Differentiation Differentiation
Suppliers
Internal Rivalry
Buyers
Competitive Scope
Broad
Cost Leadership
Narrow
Cost Focus
Differentiation Focus
You can preview the full PowerPoint document and Bullet point 1 Bullet point 2 download it at http://learnppt.com/powerpoint/
Bullet point 3 Bullet point 4
Substitutes
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Contents
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The modern strategy thinking of Blue Ocean Strategy focuses on enabling innovation, value creation, and effective execution
Modern Strategy Thinking
Growth Focus
Start with customer needs Look beyond traditional markets, industries and competitors Create multi-horizon portfolio Develop growth platforms for market mining
Consumer Need Market Trends
Value Identification
Understand what the customer values Prioritize initiatives
Value
Value Creation
Select and develop growth option Align operating model to deliver value and fair value
Costs
Effective Execution
Concept Execution
Venture Launch Organizational alignment Funding / Resource Allocation Measurements Accountability
Growth Platform
Eliminate Reduce
Raise
Create
THIS IS A PARTIALValue PREVIEW Innovation You can preview the full PowerPoint document Value download it at http://learnppt.com/powerpoint/
Source: C. Kim, R. Mauborgne, Harvard Business Review (1997).
Sustainable Growth and Structure

Infrastructure Culture Alliance Management M&A
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Modern thinking moves away from a traditional focus on competition to blue oceans of opportunity
Shift to Make Competition Irrelevant
Traditional Thinking Industry Modern Thinking Industry conditions are given compete Industry conditions can be shaped in existing market space create uncontested market space
Strategy
Companies must build competitive advantages to beat competition Exploit existing demand
Make competition irrelevant
Market
Create and capture new demand
Resources
Make the value-cost trade-off
Break the value-cost trade-off
Organization
Align the whole system of a firms activities with its strategic choice of THIS IS A PARTIAL differentiation or low cost
Align the whole system of a firms activities PREVIEWin pursuit of differentiation and low cost
Offerings
You can preview the full PowerPoint document and solution that Maximizing the offerings value within Offering buyers the total industry boundaries transcends the industry download it at http://learnppt.com/powerpoint/
Source: C. Kim, R. Mauborgne, Harvard Business Review (1997)
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Value is created from more than just meeting customer needs

Portfolio Positioning
Pioneers
(Need beyond buyers cognition)
14% of launches 38% of sales 61% of profits
Migrators
(Need known but not articulated by the buyer) 86% of launches 62% of sales 39% of profits
Settlers
(Need identified)
(Company sampling)
You can preview the full PowerPoint document and Deliver Product Service Platform Platform Platform download it at http://learnppt.com/powerpoint/
Source: C. Kim, R. Mauborgne, Harvard Business Review (1997)
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END OF PARTIAL PREVIEW You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/
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Questions & feedback? Email me dave@learnppt.com The diagrams in this pack are to be used by the original buyer only. 19

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learnppt.

Growth Strategy Toolkit

Competitive Advantage Lower Cost Cost Leadership Differentiation Differentiation

Most difficult for large companies

THISHigh-growth rates decay very rapidly IS A PARTIAL PREVIEW

THIS IS A PARTIAL PREVIEW

THIS Efficiency optimization

Managing for Growth requires

Source: The Alchemy of Growth, Baghai, Coley and White, 1999.

Losing the right to grow Running out of steam

initiatives to translating ideas into real businesses (Dot.com)

Source: The Alchemy of Growth, Baghai, Coley and White, 1999.

Develop New Products/Brands Expanding Business Scope

Develop New Formats/ Channels

Expand Geographically Growth Opportunities Build, Buy, Ally

THIS IS A Improve Pricing PREVIEW PARTIAL

Low Cost Broad Target

Cost Leadersh Differenti ation ip

McKinsey, General Electric, Shell

Low Medium High Attractiveness

M. Porter, Competitive Strategy

Cash THIS IS A PARTIAL PREVIEW Dogs Cows

Look internally and to competitors, as opposed to customers, for growth options

Boston Consulting Group

4. Suppliers Suppliers negotiation power

2. Competitors in the industry Rivalry among existing companies

5. Customers Buyers negotiation power

Low, stable returns High, stable returns

Competitive Advantage Lower Cost Differentiation Differentiation

THIS IS A PARTIAL PREVIEW

Sustainable Growth and Structure

Make competition irrelevant

Create and capture new demand

Make the value-cost trade-off

Break the value-cost trade-off

Source: C. Kim, R. Mauborgne, Harvard Business Review (1997)

Value is created from more than just meeting customer needs

14% of launches 38% of sales 61% of profits

THIS IS A PARTIAL PREVIEW

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