CONFIDENTIAL

Strategic Plan
Template
STRATEGY PLANNING INSTRUCTIONS

• The objective of these templates is to provide completeness and

consistency of Business Unit (“BU”) strategic plan submissions.
These templates are not intended to replace or constrain BU
strategic thinking and should be adapted to reflect a particular
BU’s sectoral context as required

• Each section begins with a summary that is based on a synthesis

of questions and analyses that follow. The suggested approach
would be to first complete the relevant back-up analyses and then
work towards the overall synthesis
y

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TABLE OF CONTENTS

I. Executive summary

II. Environmental and internal assessment

A. Industry dynamics and its implications
B. Competitive assessment
C Internal assessment
C.

III. Strategic definition and implications

A. Strategy articulation
B Strategic initiatives
B.
C. Financial projection
D. Risks/contingencies and strategic alternatives

IV Exhibits
IV. E hibits

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BU STRATEGIC PLAN DEVELOPMENT
Environmental and internal assessment Strategic
g definition and implications
p

Industry • What are the major • What strategy will your BU

changes in industry Strategy pursue over the next 3 years?
dynamics and
dynamics and resulting articulation
implications
p
opportunities
t iti and d risks?
i k ?

+ +
• What are your competitive • What will be the impact of
Competitive t th and
strengths d Strategic j strategic
major t t i initiatives?
i iti ti ?
assessment weaknesses? initiatives

+ +

• How does your current • What are the expected

Internal business emphasis fit with Financial financial returns of your
assessment industry opportunity and projections strategy?
competitive landscape?

Risk/contingen-
g • What strategic alternatives
cies & strategic h
have you considered?
id d?
alternatives

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I. EXECUTIVE SUMMARY
Instructions:
Th E
The Executive
ti S Summary
provides a synthesis of the
Environmental and Internal
Assessments and the
resultant BU
Strategic Plans

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II. ENVIRONMENTAL AND INTERNAL
ASSESSMENT

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IIA. INDUSTRY DYNAMICS AND IMPLICATIONS – SUMMARY

?
A. What are the major changes in industry dynamics and the resulting opportunities and risks?

Instructions:
The answer to this
overarching question
requires a recapitulation
of the section’s main
findings

A.1 What industry are you competing

in? What are the various segments
in the industry?

A.2 How is industry structure changing

(demand, supply, and industry Instructions:
chain economics)? What are the
resulting opportunities and risks? These subsections
contain a 1-2 sentence
A.3 What is the expected competitor summary of the relevant
conduct? What are the resulting
findings
opportunities and risks?

A.4
A 4 What are the present and ffuture
t re
external factors that could present
new opportunities and risks?

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IIA. INDUSTRY DYNAMICS AND IMPLICATIONS – BACK-UP 1

A 1What industry are you

A.1What • Industry definition
• Industry segmentation
competing in? What are – Definition
the various segments in – Sizing Instructions:
the industry?
Exhibit 1 could provide
a useful framework for
Industry definition:
answering this question

Industry segmentation:

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IIA. INDUSTRY DYNAMICS AND IMPLICATIONS – BACK-UP 2

• Economics of demand
A 2H
A.2How iis industry
i d t – By segment
structure changing with – Substitutes, ability to differentiate
respect to demand, – Volatility, cyclicality Instructions:
• Economics of supply
supply, and industry – Producer concentration and diversity Exhibit 2,3 or 4 could provide
chain economics? What – Import competition
a useful framework for
– Capacity utilization
are the resulting – Entry/exit barriers answering this question
opportunities and – Cost structure (fixed and variable)
risks? • Industry chain economics
– Customer and supplier bargaining power

8
IIA. INDUSTRY DYNAMICS AND IMPLICATIONS – BACK-UP 3

A 3 What is the expected

A.3 • Major industry competitor moves
– Marketing initiatives
competitor conduct? – Industry capacity changes
Instructions:
What are the resulting – M&As, divestitures
opportunities and
– Vertical integration/disaggregation Exhibit 2,3 or 4 could provide
– Alliances and partnerships
risks? – Cost control and efficiency improvements a useful framework for
answering this question

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IIA. INDUSTRY DYNAMICS AND IMPLICATIONS – BACK-UP 4

A 4 What are the present

A.4 • Impact and likelihood of major industry discontinuities
– Changes in regulation/government policy
and future external – Technological breakthroughs
factors that could
Instructions:
present new Exhibit 2,3 or 4 could provide
opportunities and a useful framework for
risks? answering this question

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IIB. COMPETITIVE ASSESSMENT – SUMMARY

B. What are your competitive strengths and weaknesses?

Instructions:
The answer to this
overarching question
requires
i a recapitulation
it l ti
of the section’s main
findings

B.1 What are the capabilities

required to succeed in Instructions:
this industry? These subsections
contain a 1-2 sentence
summary of the relevant
B.2 How do you compare findings
against these necessary
capabilities?

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IIB. COMPETITIVE ASSESSMENT – BACK-UP 1

• Privileged assets that create competitive advantage e g physical assets

advantage, e.g. assets, location/”space”
location/ space ,
B.1 What are the distribution/sales network, intangible assets (intellectual capital, network, brands, talents)
• Distinctive skills/competencies that create competitive advantage, e.g.innovation, talent
capabilities required to development
succeed in this
industry?
Instructions:
I t ti
Exhibit 5 could provide
a useful framework for
answering this question

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IIB. COMPETITIVE ASSESSMENT – BACK-UP 2

• Strengths and weaknesses of your competitive position vs

vs. necessary capabilities
B.2 How do you compare • Benchmark performance against the industry’s relevant key performance indicators (KPIs)*,
with margin and market share as the required minimum
against these
necessary
capabilities?

Strengths and weaknesses of your competitive position vs. necessary capabilities:

I t ti
Instructions:
Exhibits 6 and 7 could
provide a useful framework
for answering this question

Benchmark performance against the relevant industry’s KPIs:

Instructions:
Exhibit 8 could provide
a useful framework for
answering this question

* KPIs are a handful of levers that drive the value of the industry/business
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IIC. INTERNAL ASSESSMENT – SUMMARY

C
C. How does your current business emphasis fit with the industry opportunities and
the competitive landscape?
Instructions:
The answer to this
overarching question
requires a recapitulation
of the section’s main
findings

C.1 Which segments of the

business are providing
the highest returns?

Instructions:
C.2 What have been the These subsections
performance trends
contain a 1
1-2
2 sentence
along major BU KPIs?
summary of the relevant
findings
C.3 Which intangible assets*
could be near-term
potential sources of
value?

* Please refer to Exhibit 12 for further description

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IIC. INTERNAL ASSESSMENT – BACK-UP 1

• Relevant BU segments (based on customer

customer, product
product, geography
geography, channel)
• Operating contribution estimates for each segment
C.1 Which segments of the
business are providing Instructions:
the highest returns?* Exhibit 9 could provide
a useful framework for
answering this question

* Based on latest available, 1-2 year historical financial statements

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IIC. INTERNAL ASSESSMENT – BACK-UP 2

• KPI performance trends over the last 3-5

3 5 years
years, e
e.g.
g return on capital employed (ROCE)
(ROCE),
operating income, margins, capital employed
• Assessment of underlying trend drivers
C.2 What have been • Expected evolution
performance trends
along major BU KPIs?
ROCE = Operating income x (1 (1- tax rate)
All interest bearing debt (short and long) +
minority interest + stockholders’ equity

Instructions:
Exhibits 10 and 11 could
provide a useful framework
for answering this question

16
IIC. INTERNAL ASSESSMENT – BACK-UP 3

• Identification of in-house property talent,

in house intellectual property, talent networks,
networks brand/image
C.3 Which intangible • Conversion into sources of value
assets could be near-
term potential sources
of value?
Instructions:
Exhibit 12 could provide
a useful framework for
answering this question

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III. STRATEGIC DEFINITION AND
IMPLICATIONS

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IIIA. STRATEGY ARTICULATION – SUMMARY

A. What strategy will your BU pursue over the next 3 years?

Instructions:
The answer to this
overarching question
requires a recapitulation
of the section’s main
findings

A.1 Where to compete?

A.2 What is your customer value

proposition for the different Instructions:
segments you are going to
serve? These subsections
contain a 1-2 sentence
A.3 What is your business summary off the
th relevant
l t
model? findings
A.4 How does your chosen
gy exploit
strategy p y
industry
opportunities and address
industry/competitive threats?

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IIIA. STRATEGY ARTICULATION – BACK-UP 1

• Where are you going to compete along these dimensions and why:
– Target market
– Distribution channels
A.1 Where to compete? – Product (breadth and depth)
– Geographic scope
Instructions:
Exhibit
E hibit 13 could
ld provide
id
a useful framework for
answering this question

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IIIA. STRATEGY ARTICULATION – BACK-UP 2

• Target customer definition

A 2 What is your customer
A.2 • Benefits that you will offer the customers
value proposition for • Product pricing
the different segments • Position against competition vis-à-vis the benefits provided and the price charged
you are going to
serve?

Who is your target customer?

What are the explicit benefits you provide to your customers?

What perceived value do you provide to the customer better than competition?

How much value do your customers attach to the benefits you provide?

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IIIA. STRATEGY ARTICULATION – BACK-UP 3

• Delivery and communication of customer value proposition (value delivery system)

• Competitive advantage in delivering these benefits to the customer
A.3 What is your business
model? Instructions:
Exhibit 15 could provide
a useful framework for
How will the value proposition be provided and communicated? answering this question

Which of your BU’s existing strengths can be leveraged? What skills/capabilities do you need to
build?

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IIIA. STRATEGY ARTICULATION – BACK-UP 4

A 4 How does your chosen

A.4 • Industry attractiveness and implication review
• Alignment of strategy and environmental realities
strategy exploit the
industry opportunities Instructions:
and address the A review of the section on Industry
industry/competitive Dynamics and Implications, together
threats? with the frameworks used (Exhibit 2,3
or 4) is useful for answering this
question

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IIIB. STRATEGIC INITIATIVES – SUMMARY

B. What will be the impact of major strategic initiatives?

Instructions:
The answer to this
overarching question
requires a recapitulation
of the section’s main
findings

B1. What major strategic initiatives

are required to successfully
implement your selected
business model?

B2. What are the sources of value

created from each strategic Instructions:
initiative? These subsections
contain a 1-2 sentence
B3. How much value will be created summary of the relevant
from each strategic initiative? findings

B4. What resources will

each strategic initiative
require?

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IIIB. STRATEGIC INITIATIVES – BACK-UP 1

• Possible strategic initiatives list

B 1 What major strategic
B.1
initiatives are required
to successfully imple-
ment your selected
business model?

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