FTM Business Template - Strategic Framework

Strategic Framework
Business Template
What is a Strategic Framework? When should you use it?

The Strategy Framework template provides a Ensure that the Strategic Framework forms an
structured method for planning a business or team integral part of the Annual Business Planning (ABP)
strategy. The framework will determine the process. Before you consider forecasts and finances,
products and services that will be offered, the take time to agree on product and market
markets and customers that will be served and the boundaries. Once set, put formal quarterly review
distinctive capabilities of the business or team. meetings in everyone’s diaries.
Why is it relevant? How should you implement it?

A strategy provides the overall vision, direction and Before setting the framework, ask functional heads
priorities for a team. It will contain the basis on around the business to collect and assess Market
which the business will compete and survive in a and Customer Insights (MCI) – “what is happening in
competitive market place. Without it, the business our business environment and how does it impact
or team is often reactive and not aligned to key us?” Then plan a workshop where a cross-functional
success factors. team will review the MCI and make decisions about
products and markets as laid out in the Strategic
Who needs to be involved? Framework template. Then, translate the
Make sure that the strategy is owned by the most framework into tangible changes to day-to-day
senior manager – for a business this will be the Chief operations – this will form your overall change
Executive. However, involve a cross-functional team programme. Finally, reset the monthly Key
in the development process in order to provide Performance Indicators (KPIs) that you use to
expert inputs and to gain commitment to monitor performance so that you can check if your
implementation of necessary changes. strategy is correct and if it is happening.
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Strategic Framework
This is a case example based on a fictitious company called TVT – all the data is displayed for demonstration
purposes only. For a detailed explanation of what each cell is used for please refer to the Virtual Consultant on the
following pages.
Form 1: Strategic Positioning

Statement of Strategic Intent
Frozen food market place is a stable international market dominated by major retail outlets and food
service organisations. The essential nature of the product makes it a stable and mature market place. It
Industry Overview
can be segmented into bulk purchase (such as 1 and 2 litre tubs) and ‘impulse’ purchase (such as Ice
Lollies) – this tends to be much more seasonal and susceptible to the weather
Major trends currently include supplier consolidation (reducing our purchasing power and increasing
dependency on sole supplies), escalating food ingredient costs (making it more difficult to maintain
Business Drivers margins), and relentless EU legislation (further increasing costs). Consumers are becoming more health
aware which is raising increasing questions around the need to legislate, and there is a continuing
preference for luxury / higher quality brands
Our mission is to be a leading provider of specialist frozen dessert produce to UK retailers before the end
Purpose or Mission of 2010. This will be achieved through a combination of organic growth and acquisition, and through a
focus on aligning our business strategy with serving the needs of the major retailers
We differentiate ourselves from our competition through the levels of service delivered through our
supply chain excellence. Whilst we will not compete on price, we will drive our costs down relentlessly
Unique Capability
so that we will not have a price disadvantage versus our major competitors – this will be increasingly
important as the market becomes more global
Our three year vision is to build the retail business to a value of £16,000,000 with a single customer
representing less than 25% of turnover. We will explore additional product-markets, but will always seek
3 Year Vision
to maintain an limit to the size of the overall portfolio (operating a one-in one-out policy for all future
new product introductions
The business will be funded through operational cash-flow for the next two years, but external
Funding
investment capital will be considered to fund selective investments in acquisitions as we move into
Mechanism
specialist UK markets
Growth or Exit We will grow the business through selective acquisition of complimentary small businesses, and will float
Strategy on the UK market before the end of 2015
Form 2: Product and Services
Product Segments Top 3 Current Products Top 3 New Product Ideas Competitors & Substitutes
P1 Frozen Surprise-lite, Arctic range Lo-Cal Walls
Trio complete, Trio
P2 Chilled 2-Fresh, F2006 range C217
multipack, TVT
Arctic flavours, Moller, OL - Alpha, Super sweet
P3 Own label RESEARCH
Standard range
P4 Ready-to-bake NA NPD required Macphie direct, ABC direct
Form 3: Customers and Markets

Market Segments Top 3 Current Customers Top 3 Target Customers Major Competitors
M1 Major retailers in the UK Tesco, Waitrose, Asda Morrisons Walls
Second tier retailers in Mango, Esso stores.
M2 Iceland, 24-7, Co-op Indo direct, System-X
the UK Independents
M3 Food Service Starbucks, Brakes Sainsbury in-store cafe Indo direct, System-X
M4 Export markets Bechtel retail RESEARCH RESEARCH
Form 4: Product-Market Priorities

Product-Market Matrix M1 M2 M3 M4
Major UK retailers Second tier retailers Food Service Export markets
P1 Frozen H-Green H-Green H-Red H-Red
P2 Chilled M-Red H-Green M-Green Research-Blue
P3 Own label L-Amber M-Green M-Amber Research-Blue
P4 Ready-to-bake L-Amber NoGo-Black NoGo-Black NoGo-Black
Form 5: Financials Forecast

Current Year 1 Year 2 Year 3 Financial Assumptions
The frozen market place will continue to grow as more
P1 £5,000,000 £7,000,000 £7,500,000 £8,000,000 luxury items are developed for this category, and health
products such as Low Fat become generally accepted
Whilst the market is stable, there are still opportunities to
P2 £2,000,000 £2,500,000 £3,300,000 £4,000,000 grow sales through wholesalers. It will be possible to
achieve this through existing relationships
Food service will continue to be highly competitive and
P3 £2,500,000 £2,500,000 £2,500,000 £2,500,000
cost reductions across the product range will be required
Ready-to-bake is exciting but still unproven market space
P4 £0 £500,000 £1,000,000 £1,500,000
and needs more research before committing resources
£9,500,000 £12,500,000 £14,300,000 £16,000,000
Form 6: Core Process Model
Core Process Deliverable or Key Performance Indicator Status Change Programme
Clarity of direction and executive decision making at both
People & strategic and operational levels - including the management and
Green
Leadership motivation of all staff. DELIVERABLE: Motivate team with less
than 10% turn-over
Effective external scanning process to proactively identify and Need to establish a formal
Industry analyse opportunities and threats in the market. DELIVERABLE: quarterly external analysis and
Amber
Drivers 100% of major trends are reported in the internal quarterly MCI dissemination programme across
reports all functions
Appropriate strategic direction in terms of current and future
Strategy & product-markets and defendable source of competitive
Green
Goals advantage. DELIVERABLE: At least one clear USP reflected
through all functional teams
Creating of a culture of creativity, innovation and constructive Need to implement an ideas and
Innovation & challenge where it is accepted that doing what we did yesterday innovation process focusing on
Red
Change will not succeed tomorrow. DELIVERABLE: Active Ideas Pipeline radical process change and NPD
'beyond NPD' process improvement
Development of a portfolio of products and services in line with
NPD & musts and wants of target customer groups as defined in the
Green
Sourcing strategy. DELIVERABLE: Gaps in Product Portfolio addressed in
line with roadmap
Positioning of the TVT corporate and product brands as the
Brands & preferred supplier in our chosen markets. DELIVERABLE: Over
Green
Marketing 75% unprompted awareness within target customer group in
annual survey
Development of profitable sales in line with strategic targets, and
Sales achieving the right level of balance between direct and indirect
Green
Channels channels. DELIVERABLE: Quarterly sales in line with revenue and
profit targets
Need to instigate a programme
Effective and efficient operational processes delivering against
Operations & of complexity cost reduction
operational KPIs, what is required, when required. DELIVERABLE: Amber
Process focusing on product and
Exceeding operational KPIs in all areas of the supply chain
customer simplification
Availability of both free cash-flow from operations and external
Finance &
funding for investments as and when required. DELIVERABLE: Green
Cashflow
Financial results in line with Annual Business Plan
Compliance with all legal and ethical requirements, and the Need to identify industry best
Business effective monitoring and control of day-to-day business activities. practices for all core processes
Red
Governance DELIVERABLE: Occurrence of monthly meetings and maintenance and instigate a regular audit /
of risk register compliance process
Graphic: Core Process Model
Core Process Model
Form 7: The Top Team

Cornerstone Person Prime Responsibilities Status Change Programme
Need to build industry
Chief Leadership, motivation and direction. Networking
John Mactear Amber network and establish
Executive within the industry and being seen as a 'thought leader'
influencing process
Efficient and effective production and supply chain
Operations Joanna Derry including development of food technologies to support Green
the planned NPD programme
Securing of repeatable profitable sales growth, Need to develop partner
Sales &
Maid Bhatti researching the export market space, and developing Amber and channel management
Marketing
the TVT brand programme / capability
Finance Jaz Qadeer Cash-flow management and investment for growth Green
Non- Patrick External challenge, issues of Governance, and access to
Green
Executives Harper networks for sales and potential funding
Virtual ConsultantTM
The Virtual ConsultantTM provides a step-by-step guide to completing this business template. It is worded as a
series of questions designed to make you stop and think about this topic in a challenging and creative way – as if a
business coach or consultant was sitting next to you.
Industry Overview
What is the name, size, growth and description of the industry in which you compete?
Business Drivers
What factors are currently determining success in this industry - what are the trends? Reflect on all of the changes
currently occurring and identify the key opportunities and threats
Purpose or Mission
What is the overall purpose for the business or team? Note: this should include a brief statement of what products
and services will be provided to which customers and markets. It might also contain an aspirational statement 'To
be the number one provider of ....'
Unique Capabilities
What is the unique capability or contribution? This will be the Unique Selling Proposition (USP) or source of
competitive advantage for an organisation that will ensure that new customers will be attracted, and existing
customers will remain loyal over the next three years? Note: reflect on internal strengths that a) give customers
something they want, b) are provided at a competitive level of performance, and c) can be sustained over a three
year period
3 Year Vision
What is the level of ambition in terms of development and growth for the next three years? Explain how different
the business or team will be in three years?
Funding Mechanism
What is the preferred process for funding the growth of the business or team over the next three years? Note:
think about the cash-flow required to fund both ongoing operations and strategic growth. Cash flow is particularly
important for some organisations or teams, and a separate cash flow analysis should be completed using a
spreadsheet and attached as a document to this strategy. Alternatively, you can use the Scorecard tool to track
cash-flow changes on a month-by-month basis
Growth or Exit Strategy
What is the preferred way for the business or team to grow? This could be through organic development, strategic
partnerships or possible mergers and acquisitions. Alternatively, if withdrawal is being considered, how will this be
achieved? For SME, what is the preferred way in which the current owners and shareholders will recoup their
investment in the business?
Product Segments
What is the natural grouping or segmentation for current and future products & services?
Top 3 Current Products
What are the top 3 products or services in each product segment?
Top 3 New Product Ideas
What are the top 3 new product or service ideas for development or sourcing over the next three years?
Competitors & Substitutes
What are the main competitive or substitute products and services in each segment?
Status RAG
Finally, what is the current status in each segment? Note: think about how competitive each product segment is
and whether significant changes are required
 Red = major concerns and immediate corrective action required
 Amber = some concerns and future action is required
 Green = performance is acceptable and no changes are required
Note: Red status items should result in the creation of improvement actions (which form part of the change
programme) and Amber status items that reflect risks and need to be monitored closely.
Market Segments
What is the natural grouping or segmentation for current and future customers & markets?
Top 3 Current Customers
Who are the top 3 customers or markets in each market segment?
Top 3 Target Customers
Who are the top 3 target customers and markets for conversion over the next three years?
Major Competition
Who are the main competitors in each segment?
Action
What actions should be planned in order to address concerns in each segment?
For each product-market what is the relative emphasis (H = High, M = Medium, L = Low and 0 = None) and status?
 Red = major concerns and immediate corrective action is required
 Amber = some concerns and needs to be monitored closely
 Green = on-track and no change required
 Blue = needs research
 Black = not applicable

Financial forecasts
What is the forecast income or budget trend (growth or decline) over the next three years?
Assumptions
What are the critical assumptions that need to hold true in order for these forecasts to be achieved? Note: each
assumption represents an area of risk and will need to be managed
Core Processes
What are the core processes for your business or team? Note: this might reflect the TVT Core Process Model
Deliverable or Key Performance Indicator
What is the main deliverable or Key Performance Indicator (KPI) for each core process? Reflect on how you will
know if each is working
Status
What is the current status of each core process?
 Amber = Some issues and needs to be monitored closely - represents areas of future risk
 Green = operating effectively and efficiently
 Black = not relevant to your business

Core Process Model
What is a graphical model for you organisations that shows: 1) the core processes, and 2) how they link together?
Note: keep it as simple as possible in order to make it understandable by all members of the team. It may be best
simply to use the TVT core process model, and colour each element according to whether it is Red-Amber-Green
status
Cornerstone
What are the key roles within the business, and which member of the management team is responsible for
delivery in each area? Note: the term 'cornerstone' was introduced in the book 'The Beermat Entrepreneur'
Prime Responsibilities
What are the prime responsibilities of each cornerstone?
Status
What is the current status of each position?
 Amber = some concerns and needs to be monitored closely
 Green = right person with the right profile in the right role
Action
What specific actions should be taken to address each Red status item?
Strategic Framework
Use the following blank template to address an issue or opportunity within your business or team
Statement of Strategic Intent
Industry Overview
Business Drivers
Purpose or Mission
Unique Capability
3 Year Vision
Funding
Mechanism
Growth or Exit
Strategy
Product Segments Top 3 Current Products Top 3 New Product Ideas Competitors & Substitutes
P1
P2
P3
P4

Market Segments Top 3 Current Customers Top 3 Target Customers Major Competitors
M1
M2
M3
M4

Product-Market Matrix M1 M2 M3 M4
P1
P2
P3
P4

Current Year 1 Year 2 Year 3 Financial Assumptions
P1
P2
P3
P4
Core Process Deliverable or Key Performance Indicator Status Change Programme
People &
Leadership
Industry
Drivers
Strategy &
Goals
Innovation &
Change
NPD &
Sourcing
Brands &
Marketing
Sales
Channels
Operations &
Process
Finance &
Cashflow
Business
Governance
Core Process Model

Cornerstone Person Prime Responsibilities Status Change Programme

FTM Business Template - Strategic Framework

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Strategic Framework

What is a Strategic Framework? When should you use it?

Why is it relevant? How should you implement it?

Form 1: Strategic Positioning

Form 3: Customers and Markets

Form 4: Product-Market Priorities

Form 5: Financials Forecast

Core Process Model

Form 7: The Top Team

Form 1: Strategic Positioning

Form 2: Product and Services

Form 3: Customers and Markets

Form 4: Product-Market Priorities

Form 5: Financials Forecast

Graphic: Core Process Model

Form 7: The Top Team

Form 3: Customers and Markets

Form 4: Product-Market Priorities

Form 5: Financials Forecast

Core Process Model

Form 7: The Top Team

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