The Strategic Business Planning Process

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Prepared by : Phil Enright

Enright Hendy & Partners
eh! House, 310 Nudgee Road
HENDRA Q 4011

PH: (07) 32681212 FAX: (07) 32681262

Web: www.ehp.com.au
Email: phil.enright@ehp.com.au

Page 1 of 7, Enright Hendy & Partners Strategic Business Planning Process

STRATEGIC BUSINESS PLAN’S BENEFITS & CONTENT
The essential processes/elements of a Strategic Business Plan that can deliver
Sustainable Competitive Advantage are a complete detailed review of all facets
of the external and internal business environments, identifying the key issues that
impact on the short, medium, and long term performance of the business
(quantifying that impact wherever possible).

Objectives will be set to address those key issues.

Strategies will be developed to achieve each of the nominated objectives

Action Plans and implementation timetables will be developed for each strategy,
nominating the personnel responsible for each aspect of implementation, and the
managers responsible for monitoring and reporting on that implementation.

None of the above will be fruitful without invoking a very disciplined approach to
costing, measuring and monitoring performance prior to and during
implementation on an ongoing basis.

In particular, no Plan is effective without a defined Organisational Structure, Job

Descriptions, Roles, Processes, KPI’s and Reporting. Equally crucial are the
Financials – a breakeven analysis which defines the level of billings and income
required to cover costs in the re-designed organization. Implementation Plans must
incorporate monthly P&L and cash flow projections through to breakeven if the Plan
commences with the business in loss.

This template and process can be applied to any industry, but has been modified
to some extent for an ad agency.

Page 2 of 7, Enright Hendy & Partners Strategic Business Planning Process

PLANNING ACTIVITY CHECK LIST

1. Overview, to be undertaken by the management team and/or staff

(collectively, individually or a combination of the two as appropriate) -
Why we're doing it and the rules of conduct in any meetings of the process

2. Vision – CEO’s current vision of the company in the market, what it does
and seeks to do better than its competitors, its structure and the
processes and disciplines by which it does it.

3. Data Review Activities:

The Assets of the Business including our People
Market comparative appeal/perceived value of our service
Customer analysis
Product analysis
Pareto analysis (sales in relation to customer groups)
Attitude survey (what do we all feel are the issues)
Key success factors (best practice/our practice)
Skills audit (what skills does the organisation have & need)
Financial review – breakeven analysis
Key performance indicators
Barriers to change
Management review (who, what do we monitor and how, key performance
indicators, feedback, reward/remuneration, process management (quality),
change management.)

4. Environmental Scan - refer checklist

5. Issues Analysis
6. Set Goals and Objectives Addressing Issues
7. Develop Strategic Options
8. Vision & Core Values
9. Implementation - Action Plans (activities, roles, timetable and reporting)
10. Organisational Structure, Job Descriptions, Roles, Processes, KPI’s and
Reporting
11. Financials – breakeven analysis (level of billings and income required to cover
costs in re-designed organisation

Page 3 of 7, Enright Hendy & Partners Strategic Business Planning Process

ENVIRONMENTAL SCAN CHECKLIST

1. Internal (Company) Environment

* Size * Management
* Complexity * Management competence
* Structure * Workforce competence
* Systems * Capital intensity
* Communications * Technological intensity
* Power structure * Product diversification
* Role definitions * Market diversification
* Centralisation/decentralisation * Technological diversification
* Values and norms

2. Competitive Environment

1. Industry Competition 3. New Entrants

* Concentration and number of competitors * Market attractiveness
* Relative market shares of competitors * Easy access to distribution channel
* Merger and acquisition trends * No. of organisations able to "buy in”
* Customer attitudes towards competitors
* Market Growth trends
* Size as competitive tool 4. Suppliers
* Shrinking product life-cycles * Shortage of strategic resources
* Reduced forecasting horizons * Importance of suppliers' input

2. Buyers 5. Substitute Products or Services

* Concentration of number of buyers * Relative prices of substitutes
* Distortion of the 80/20 rule * Number of possible substitutes
* Dependence on one particular industry * Product improvements based on

* Linkages between customers and process improvements

competitors

Page 4 of 7, Enright Hendy & Partners Strategic Business Planning Process

3. Macro Environment

1. Political 3. Social
* Trends in developed countries * Affluence of consumers
* Government control on business * Change in age distribution of
* Relative prices of substitutes consumers
* Legislation restricting trading partners * Social attitudes towards business
* Protectionism versus free trade * Changing work attitudes
* Union pressure * Minority group pressure

2. Economic 4. Technological
* Monetary trends * Technology as a competitive tool
* Inflationary trends * Technological breakthroughs
* Growth of service by sector * Level of threat represented by:-
- Applied technology
- Developed technology
- Emerging technology
- Conceptualised technology

It is essential that any Plan be based upon a reliable understanding of the markets
(and their dynamics), currently and potentially available to your business. In this
"Draft" form, the Plan must canvass all possible strategic options. In so doing it will
provide the basis for management decision-making, planning and implementation.

Any valuable Plan requires that you know what is the current comparative appeal of
the brand/s and product/s to each of the current and potential markets;
– trade segments and their influencers
– consumer segments and their influencers
– retail trade segments and their influencers
– distributors and their influencers
out of which will emerge a real appreciation of the markets' dynamics and your
ability to influence those dynamics.

Page 5 of 7, Enright Hendy & Partners Strategic Business Planning Process

 It is envisaged that in order to produce a Plan that will incorporate an analysis of the
comparative potential and demands of each of the strategic options offered, it will
often be necessary to conduct trade research as well as initial guiding, consumer
(internal and external, observational, phone and face-to-face) research of all
potential purchasers, users and their influencers.

Experience has shown that there are essentially three viable research options in the
strategic planning endeavour (over 90% of new products launched fail, and over
70% of those are researched — they fail because the distinction of roles, strategist
and researcher, is invariably not appreciated):

• desk research to quantify the size of the markets, and consumer and trade
research (via limited face-to-face and phone research) to establish the market
dynamics and their ‘drivers’ by interviewing representative samples of buyers in
the distributor, trade and retail outlets operating within all distribution channels
to establish:
– perceptions of the current and potential performance of each product/service
and its main competitors.
– profit contribution of the category and their (distributors, trade and
retailers) interest in any area of the market
– perceptions of areas of untapped potential
– perceptions of the various competitors and their performance and the
impact their "way of doing business" (the competitors) has on the market
– perceptions of what they would like from their ideal supplier
– their perceptions of the performance of past promotions by suppliers—
what do they feel works the best?
– the nature, preferences (product, brand, packaging and distribution) and
behaviour of the various relevant market segments, possibly also testing
their reactions to alternate distribution channels, packaging and/or
positionings.

• test marketing in an isolated (in the marketing sense) regional area

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 • highly sophisticated and quantified research that defines:
– the total market's products'/services' brand personalities
– the way in which the products'/services' characteristics and brand
positionings are related, and are influenced by pricing, distribution
and their positioning (launch) communications
– the markets' segments and their varying purchasing behaviours based
upon changing preferences, usage occasion, and (in turn)
their linkage to purchasing behaviours and their determinants

Page 7 of 7, Enright Hendy & Partners Strategic Business Planning Process