某咨詢戰(zhàn)略咨詢手冊課件

CONFIDENTIALBUStrategicPlanBasicsTrainingmaterialsThisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinsey&Company.ThismaterialwasusedbyMcKinsey&Companyduringanoralpresentation;itisnotacompleterecordofthediscussion.JimAyala–PHOMelissaGil–PHOReginaManzano–PHOSureshMustapha–PHOSteveShaw–HKOShellyYeh–PHOChoon-GinTan–SIO?CONFIDENTIALBUStrategicPlanDESCRIPTIONOFMATERIALSThisdocumentwasdevelopedasatrainingpresentationforthenewlyappointedBusinessUnitCEOsofanAsianFamily-ownedconglomerate.ThepurposeofthisdocumentistoguidenewCEOsthroughthebasicelementsofdevelopingaBU-levelstrategicplan.Thispresentationiscomplementedbyacompaniondocumentthe“BUStrategicPlanTemplateBook”whichprovidescompletenessandconsistencyofBUstrategicplansubmissions.ThesetemplatesarenotintendedtoreplaceorconstrainBUstrategicthinkingandshouldbeadaptedtoreflectaparticularBU’ssectoralcontextasrequired1?DESCRIPTIONOFMATERIALSThisdWHATISABUSTRATEGY?Astrongbusinessconceptthatdrivesanintegratedsetofactionsthatcreatesvalueby:Creatingproducts/serviceswhosevalueexceedsthecostofprovidingthemCapturingvaluefromcompetitors,customers,distributors,suppliers,andproducersofsubstituteproductsandservices2?WHATISABUSTRATEGY?AstrongRATIONALEFORPROPOSEDDEFINITIONAstrongbusinessconceptthatdrivesanintegratedsetofactionsthatcreatesvalueby:Creatingproducts/serviceswhosevalueexceedsthecostofprovidingthemCapturingvaluefromcompetitors,customers,distributors,suppliers,andproducersofsubstituteproductsandservices1. Recognizedualroleofcreatingandcapturingvalueinallelementsofbusinesssystem2. Forceschoices6. Competitive7. Externallyoriented,customerdriven4. Recognizesimportanceofcostascompetitivetool5. Considerstradeoffsbetweenbenefitprovidedtocustomersandcoststheyincur3. Givesconsiderationtoallelementsof

thebusinesssystem3?RATIONALEFORPROPOSEDDEFINITCOMMONELEMENTSOFREAL-LIFESTRATEGIESVisionWhere?Strongbusiness

concept

consistingofHowto

compete?Integrated

setofactionsDevelopedhighqualitystandardsandexcellentoperationalproceduresFocusondevelopingcriticalmassofstoresandestablishingmarketdominanceMcDonald’sexperiencedphenomenalsuccessinglobalizationdueto:SuccessfullyscreeningfranchiseesandadedicationtointenseinitialandongoingtrainingConsistentdeliveryofhigh-qualityfoodandservicearoundtheworldHugeeconomiesofscaleandpowerfulsupplierleverageCapitalizedon“American”appealofMcDonald’sSuccessintailoringassortmentmixtomeetlocalneeds“Wewanttobetheworld’sbestquick-servicerestaurantexperience”"Wewillofferidenticalexcellentqualityacrosstheworld"Targetingabroadsetoftheurbanpopulation,increasinglyofferingabundledproduct(i.e.,meals)atalowpriceinmajorcitiesaroundtheworldMcDONALD’SEXAMPLE4?COMMONELEMENTSOFREAL-LIFESBUSTRATEGYREVIEWINTERACTIONSHighlyinteractivedebatedrivenbyfact-basedunderstandingofenvironmentandinternalcapabilitiesHowdoyouexpectCompetitorAtoreact?Howsustainable

isyourbusinessmodel?Canitbeeasilyduplicated?Howrobustareyourcontingencyplans?Howquicklycanyoushiftyourbusinessemphasistocaptureindustryopportunities?BU-CEO5?BUSTRATEGYREVIEWINTERACTIONBUSTRATEGICPLANDEVELOPMENTIndustrydynamicsandimplicationsEnvironmentalandinternalassessmentCompetitiveassessmentInternalassessmentWhatarethemajorchangesinindustrydynamicsandresultingopportunitiesandrisks?Whatareyourcompetitivestrengthsandweaknesses?Howdoesyourcurrentbusinessemphasisfitwithindustryopportunityandcompetitivelandscape?StrategyarticulationStrategicdefinitionandimplicationsStrategicinitiativesFinancialprojectionsWhatstrategywillyourBUpursueoverthenext3years?Whatwillbetheimpactofmajorstrategicinitiatives?Whataretheexpectedfinancialreturnsofyourstrategy?++++Risk/contingen-cies&strategicalternativesWhatstrategicalternativeshaveyouconsidered?+6?BUSTRATEGICPLANDEVELOPMENTIINDUSTRYDYNAMICSANDIMPLICATIONSEconomicsofdemandBysegmentSubstitutes,abilitytodifferentiateVolatility,cyclicalityEconomicsofsupplyProducerconcentrationanddiversityImportcompetitionCapacityutilizationEntry/exitbarriersCoststructure(fixedandvariable)IndustrychaineconomicsCustomerandsupplierbargainingpowerWhatarethe

majorchangesinindustrydynamicsandtheresultingopportunitiesandrisks?Howisindustrystructurechangingwithrespecttodemand,supply,andindustrychaineconomics?Whataretheresultingopportunitiesandrisks?Whatistheexpectedcompetitorconduct?Whataretheresultingopportunitiesandrisks?Whatarethepresentandfutureexternalfactorsthatcouldpresentnewopportunitiesandrisks?MajorindustrycompetitormovesMarketinginitiativesIndustrycapacitychangesM&As,divestituresVerticalintegration/disaggregationAlliancesandpartnershipsCostcontrolandefficiencyimprovementsImpactandlikelihoodofmajorindustrydiscontinuitiesChangesinregulation/governmentpolicyTechnologicalbreakthroughsKeyquestionSub-questionsIssuestobeconsidered* * MayormaynotbeapplicabletoallBUsWhatindustryareyoucompetingin?Whatarethevarioussegmentsintheindustry?IndustrydefinitionIndustrysegmentationDefinitionSizing7?INDUSTRYDYNAMICSANDIMPLICATSEGMENTANALYSISILLUSTRATIVEIndustryboundariesSegmentsIndustrysegmentsRelativelydistinctsub-groupingswithintheindustryMarketisrelativelysimilarwithinthesegmentbutdifferentacrosssegmentsDifferentindustrydynamicsmayvaryinimportanceindifferentsegments8?SEGMENTANALYSISILLUSTRATIVEInProducersIndustrySTechnologybreakthroughsChangesingovernmentpolicy/regulationsDomesticInternationalEconomicsofdemandAvailabilityofsubstitutesDifferentiabilityofproductsRateofgrowthVolatility/cyclicalityEconomicsofsupplyConcentrationofproducersImportcompetitionDiversityofproducersFixed/variablecoststructureCapacityutilizationEntry/exitbarriersIndustrychaineconomicsBargainingpowerofinputsuppliersBargainingpowerofcustomersMarketingPricingVolumeAdvertising/promotionNewproducts/R&DDistributionCapacitychangeExpansion/contractionEntry/exitAcquisition/merger/divestitureVerticalintegrationForward/backwardintegrationVerticaljointventuresLong-termcontractsInternalefficiencyCostcontrolLogisticsProcessR&DOrganizationeffectivenessFinanceProfitabilityValuecreationTechnologicalprogressEmploymentobjectivesExternalshocksFeedbacktructureConductPerformanceSTRUCTURE-CONDUCT-PERFORMANCE(SCP)MODEL9?ProducersIndustrySTechnologyb1. DeterminantsofsupplierpowerDifferentiationofinputsSwitchingcostsofsuppliersandfirmsintheindustryPresenceofsubstituteinputsSupplierconcentrationImportanceofvolumetosupplierCostrelativetototalpurchasesintheindustryImpactofinputsoncostordifferentiationThreatofforwardintegrationrelativetothreatofbackwardintegrationbyfirmsintheindustry2. DeterminantsofbarrierstoentryEconomiesofscaleProprietaryproductdifferencesBrandidentitySwitchingcostsCapitalrequirementsAccesstodistributionAbsolutecostadvantagesProprietarylearningcurveAccesstonecessaryinputsProprietary,low-costproductdesignGovernmentpolicyExpectedretaliation5. RivalrydeterminantsIndustrygrowthFixed(orstorage)cost/valueaddedIntermittentovercapacityProductdifferencesBrandidentitySwitchingcostsConcentrationandbalanceInformationalcomplexityDiversityofcompetitorsCorporatestakesExitbarriers3. DeterminantsofbuyingpowerBargainingleverageBuyerconcentrationvs.firmconcentrationBuyervolumeBuyerswitchingcostsrelativetofirmswitchingcostsBuyerinformationAbilitytobackwardintegrateSubstituteproductsPull-through4. Determinantsof

substitutionthreatRelativepriceperformanceofsubstitutesSwitchingcostsBuyerpropensitytosubstitute2.Newentrants3.Buyers4.SubstitutesIntensityofrivalry1.SuppliersPricesensitivityPrice/totalpurchasesProductdifferencesBrandIdentityImpactonqualityperceptionBuyerprofitsDecisionmakers'incentives5.Industrycompetitors"FORCESATWORK"FRAMEWORK10?1. DeterminantsofsupplierpoOpportunities/ThreatsHowaredemandandsupplyexpectedtoevolve?Howdoyouexpecttheindustrychaineconomicstoevolve?Whatarethepotentialmajorindustrydiscontinuities?Whatcompetitoractionsdoyouexpect?YOURBUSWOTANALYSISCONVERT

OPPORTUNITIESBUILDONSTRENGTHSNEUTRALIZETHREATSADDRESSWEAK-NESSESStrengths/WeaknessesWhatareyourBU’sassets/competenciesthatsolidifyyourcompetitiveposition?WhatareyourBU’sassets/competenciesthatweakenyourcompetitiveposition?CanbeusedasathoughtstarterforcompetitiveanalysisandinternalassessmentSurfacespotentialopportunities/threatsarisingfromfactorsexternaltotheBU11?Opportunities/ThreatsYOURBUSWSCPAPPLIEDTOLEXMARKRapidlychangingtechnology,e.g.,birthofportable,handheld,wirelesscomputersRapidlychangingcustomerpreferencesPossibilityofapaperlesssocietygivenincreasingenvironmentalconcernandriseoftheinternetEconomicsofdemandInkjetprintersreplacinglaserinnon-networkenvironmentHighpricesensitivity;minimalopportunityformajorproductdifferentiationGrowthoflaserandinkjetprintermarketsstablebutdependentonPCsalesanddegreeofreplacementEconomicsofsupplyHPholdslion’sshareofprintermarketIndustrycapacityexceedsmarketdemandPresenceofcounterfeitandrecycledproductsupplyespeciallyinconsumablesHighexitbarriersduetoassetintensityIndustrychaineconomicsBargainingpowerofsupplierslowBargainingpowerofdistributorshighLittleintegration(forwardorbackward)MarketingManufacturerscompetingmainlyonpriceRetaildominantdistributionchannelAggressivedevelopmentandreleaseofnewproductsMovestoincreasebrandawarenessviamarketingcampaignsCreativefinancingpackagesInternalefficiencyRelentlessdrivetolowcostmanufacturingContinuouseffortstocreatemorespecializedfeaturesand/orfunctionsOthersEntryofPCandperipheralsplayersClampdownoncounterfeitandrecycledconsumablessuppliersFinancePricecompetitiononprinterhardwaredrivesmarginsdownandforcesplayerstorelyonprofitsfromconsumableproducts(goodmargins)andhighvolumecaptureonhardwareSExternalshocksFeedbacktructureConductPerformance12?SCPAPPLIEDTOLEXMARKRapidlyRESULTINGOPPORTUNITIESANDRISKSFORLEXMARKOpportunitiesRisksBecomethefirstmoverinprintersforportable,handheld,wirelesscomputermarketGrowdemandbaseviauseofcreative,non-traditionalchannelsandalternativefinancing/paymentmethodsGrowdemandforconsumablesviaprogramstoincreaseprintingusageBethesupplierofprintersforPC/peripheralplayershopingtotheexpandintoprintermarketExpandleadershipincorporate’institutionalaccountsIncreasingdemandforcustomizationmayincreasecostsanderodemarginsAnydeclineinPCsalesmaysignificantlybringdownrevenuesMarketsharemaybeerodedascompetitionintensifiesBranding/marketingpushfromestablishedplayersPricingpushfromlow-costmanufacturersMarginsatriskifprintingusagedeclineswithpushforpaperlesssocietyNOTEXHAUSTIVE13?RESULTINGOPPORTUNITIESANDRICOMPETITIVEASSESSMENTPrivilegedassetsthatcreatecompetitiveadvantage,e.g.physicalassets,location/”space”,distribution/salesnetworkDistinctiveskills/competenciesthatcreatecompetitiveadvantage,e.g.innovation,talentdevelopmentWhatareyour

competitive

strengthsand

weaknesses?Whatarethecapabilitiesrequiredtosucceedinthisindustry?Howdoyoucompareagainstthesenecessarycapabilities?Strengthsandweaknessesofyourcompetitivepositionvs.necessarycapabilitiesBenchmarkperformanceagainsttheindustry’srelevantkeyperformanceindicators(KPIs),withmarginandmarketshareastherequiredminimumKeyquestionSub-questionsIssuestobeconsidered * KPIsareahandfulofleversthatdrivethevalueoftheindustry/business14?COMPETITIVEASSESSMENTPrivilegCAPABILITYPLATFORM:ASSESSMENTOFSOURCESOF

COMPETITIVEADVANTAGE(1/2)PhysicalassetLocation/"space"

Distribution/salesnetworkBrand/reputationPatentRelationshipwith"license"allocatorBHP’slow-costminesTelecomm/mediacompanywithrights

radiospectrumAvon’srepresentativesCoca-ColaPharmaceuticalcompanywitha"wonderdrug”"Favorednation"statuswithakeyministerinliberalizingeconomyInnovationCross-functionalcoordinationMarketpositioningCost/efficiencymanagementTalentdevelopment3MwithnewproductsMcDonald’swithQSC&VJ&JwithbrandedconsumerhealthproductsEmersonElectric’sBestCostProducerprogramP&GbrandmanagementprogramPrivilegedassetsDistinctivecompetenciesNecessarycapabilitiesinordertosucceedintheindustryExample15?CAPABILITYPLATFORM:ASSESSMEStep1:Ensurethatthesearethecapabilitiesrequiredtosucceedintheindustry.Usethislistasathoughtstarter,addanddeleteasyouseeappropriateBUOverallSegmentsABCStep2:Assessyouroverallpositionrelativetothecapabilitiesrequiredtosucceedintheindustry.Also,determineifthesecapabilitiesarerelevanttothesegmentsyouservePhysicalassetLocation/"space"

Distribution/salesnetworkBrand/reputationPatentRelationshipwith"license"allocatorInnovationCross-functionalcoordinationMarketpositioningCost/efficiencymanagementTalentdevelopmentPrivileged

assetsDistinctivecompetenciesNecessarycapabilitiesinordertosucceedintheindustryCAPABILITYPLATFORM:ASSESSMENTOFSOURCESOFCOMPETITIVEADVANTAGEBYSEGMENT(2/2)ILLUSTRATIVEExtremelyrelevantSomewhatrelevantIrrelevant16?Step1:EnsurethattheseareBUOverallCompetitorsABCStep3:Comparethestrengthsandweaknessesofyourcompetitivepositionvs.thenecessaryskillsPhysicalassetLocation/"space"

Distribution/salesnetworkBrand/reputationPatentRelationshipwith"license"allocatorInnovationCross-functionalcoordinationMarketpositioningCost/efficiencymanagementTalentdevelopmentPrivileged

assetsDistinctivecompetenciesNecessarycapabilitiesinordertosucceedintheindustry

COMPETITORCAPABILITYCOMPARISONILLUSTRATIVE17?BUOverallCompetitorsABCStep3Necessarycapabili-tiesinordertosucceedintheindustryPrivilegedassetsDistinctivecompeten-ciesCAPABILITYPLATFORMAPPLIEDTOLEXMARKDistribution/salesnetworkBrand/reputationInnovationCross-functionalcoordinationMarketpositioningCost/efficiencymanagement

LaserInkjet

(Salesnetwork)(Distribution)(Reputation)(Brand)SegmentsExtremelyrelevantSomewhatrelevantIrrelevant18?Necessarycapabili-tiesinordNecessarycapabilitiesinordertosucceedintheindustryPrivilegedassetsDistinctivecompetenciesCOMPETITORCAPABILITYCOMPARISONAPPLIEDTOLEXMARKDistribution/sales

networkBrand/reputationInnovationCost/efficiencymanagementLexmarkHPEpson

Formedownaccountteams;customerrelationshipsinheritedfromIBMWell-establishedretaildistribution/dealernetworkKnownforqualityspecializedproductsandnetworksoftwareBest-knownbrandKnownforproductqualityQuicktomarketwithnewtechnologiesAwardedleaderinimplementa-tionofnecessaryproductfeaturesLeaderinprintqualityCross-functionalcoordinationdeliverssuperiorproductdesignandcustomerserviceMarketpositioningCross-functionalcoordinationOwnershipoftechnologyallowslow-cost,in-housemanufactureofcriticalcomponents

19?NecessarycapabilitiesinordeBENCHMARKPERFORMANCEAGAINSTRELEVANTINDUSTRYKPIsKPIs(examples)FinancialindicatorsMarginNetincomeROCE

OperatingindicatorsAdvertisingeffectivenessUtilizationrateStrategicindicatorsMarketsharePercentofrevenuefromnewproductsWorkingcapitaltrendExternalindicatorsMarketpricesofrawmaterialsBUCompetitorACompetitorBCompetitorC20?BENCHMARKPERFORMANCEAGAINSTKPIsFinancialindicatorsOperatingincomeMarginsROCEOperatingindicatorsDistributionreachCycletimeStrategicindicatorsMarketshareBrandawarenessLexmarkHPEpsonBENCHMARKINGAPPLIEDTOLEXMARKStrongMediumWeak * Includesotherinformationequipment(e.g.scanners,projectors)$457million12%29%$1,573million*9%*11%*$583million*6%*N/A*12%47%17%21?KPIsFinancialindicatorsLexmarINTERNALASSESSMENTRelevantBUsegments(basedoncustomer,product,geography,distributionchannel)OperatingcontributionestimatesforeachsegmentHowdoesyourcurrentbusinessemphasisfitwiththeindustryopportunitiesandthecompetitivelandscape?Whichsegmentsofthebusinessareprovidingthehighestreturns?*WhathavebeentheperformancetrendsalongmajorBUKPIs?KPIperformancetrendsoverthelast3-5years,e.g.returnoncapitalemployed(ROCE)**,operatingincome,margins,capitalemployedAssessmentofunderlyingtrenddriversExpectedevolutionKeyquestionSub-questionsIssuestobeconsideredWhichintangibleassetscouldbenear-termsourcesofvalue?Identificationofin-houseintellectualproperty,talent,networks,brand/imageConversionintosourcesofvalue * Basedonlatestavailable,1-2yearhistoricalfinancialstatements ** ROCE=Operatingincomex(1-taxrate) Allinterestbearingdebt(shortandlong)+minorityinterest+stockholders’equity22?INTERNALASSESSMENTRelevantBUSEGMENTANALYSISRevenueGrossprofitOperatingprofitAssetsemployedPeopleemployedOperating

profitmarginGrossprofit

marginROCEStep1:IdentifytherelevantsegmentsStep2:Provideasegmentanalysisbasedonthefollowingminimumfinancialmetrics:revenue,grossprofitandmargin,operatingprofitandmarginStep3:Totheextentassetsandpeoplecanbedisaggregatedbysegment,deploymentofassetsagainstreturnscanbeanalyzed%PhP%oftotalSegment1PhP%oftotalSegment2PhP%oftotalSegment3PhP%oftotalSegment4PhP%oftotalTotal%%%%Segment1Segment2Segment3Segment4Total23?SEGMENTANALYSISRevenueOperatiSEGMENTANALYSISAPPLIEDTOLEXMARKPrintersandsuppliersOtherofficeimagingKeyboardsandotherRestofworldEuropeUSProductPercentGeographyPercentoftotalrevenues,1995100%=USD3,807million100%=$2494m100%=$895m11414864846100%=$3021m100%=$1024m14355184646100%=$3452m100%=$1031m1428584060100%=$3807m100%=$1164m9236832671GrossprofitRev1992GrossprofitRev1993GrossprofitRev1994GrossprofitRev1995024?SEGMENTANALYSISAPPLIEDTOLETRENDANALYSIS–RETURNONCAPITALEMPLOYED(ROCE)TheROCEtreecanbedisaggregatedtoshowtheotherrelevantKPIsofaBUROCEPercentOperatingincomex(1-taxrate)PhPmillionCapitalemployedPhPmillion÷RevenuePhPmillionOperatingmarginPercentx(1-taxrate)PercentxMarketsharePercentIndustrysalesPhPmillionxILLUSTRATIVE25?TRENDANALYSIS–RETURNONCAPTRENDANALYSIS–CASHThecashflowtreecanbedisaggregatedtoshowtheotherrelevantKPIsofaBUCashflowgeneratedPhPmillionOperatingcashflowPhPmillionInvestingcashflowPhPmillion+NetincomePhPmillionNon-cashexpensesPhPmillion+ChangeinworkingcapitalPhPmillion+FinancingcashflowPhPmillion+NOTEXHAUSTIVE26?TRENDANALYSIS–CASHThecashTRENDANALYSISAPPLIEDTOLEXMARKROCEPercentOperatingincomex(1-taxrate)USDMCapitalemployedUSDM÷RevenueUSDMOperatingmarginPercentx(1-taxrate)PercentxMarketsharePercentIndustrysalesUSDMxNOTEXHAUSTIVE27?TRENDANALYSISAPPLIEDTOLEXMINTANGIBLEASSETCHECKLIST

IntangibleassetsWaystoextractnear-termvalue

TalentHighlymotivatedandcompetentworkforceleveragingspecificskillsetstoGenerategrowthImprove/increasecompanyintangibles

IntellectualpropertyPatentsgeneratinglicensingfeesUnderstandingofcustomerbehaviorRiskmanagementSoftware

NetworkInterconnectedwebsofpartiesNon-exclusiveAdditionalmemberlowerscosts,increasesbenefits

Brand/imageInherentimageorbrandbuiltuponexcellentserviceandproductofferingsLowersearchcostsforcustomers

28?INTANGIBLEASSETCHECKLISTInTechnologyforproductsNetworkingsoftwareINTANGIBLEASSETASSESSMENTAPPLIEDTOLEXMARKIntangibleassetsWaystoextractnear-termvalueCustomizetosuitindustrysegmentscurrentlynotservedDeveloprelatedproductsthatmayusenetworkingsoftwarein-houseorviapartnershipSalesforceengineersDevelopthebestproducttosuitidentifiedcustomerneedsTalentRelationshipwithsuppliersGoodworkingrelationshipallowsbettercaptureofproductionefficienciesthatimproveproductcycletimeandcostefficiencyNetworkIntellectualpropertyNOTEXHAUSTIVE29?TechnologyforproductsINTANGISTRATEGYARTICULATIONWhereareyougoingtocompetealongthesedimensionsandwhy:TargetmarketDistributionchannelsProduct(breadthanddepth)GeographicscopeTargetcustomerdefinitionBenefitsthatyouwillofferthecustomersProductpricingPositionagainstcompetitionvis-à-visthebenefitsprovidedandthepricechargedDeliveryandcommunicationofcustomervalueproposition(valuedeliverysystem)CompetitiveadvantageindeliveringthesebenefitstothecustomerWheretocompete?Whatisyourcustomervaluepropositionforthedifferentsegmentsyouaregoingtoserve?Whatisyourbusinessmodel?WhatstrategywillyourBUpursueoverthenext3

years?KeyquestionSub-questionsIssuestobeconsideredIndustryattractivenessandimplicationreviewAlignmentofchosenstrategyandenvironmentalrealitiesHowdoesyourchosenstrategyexploittheindustryopportunitiesandaddresstheindustry/competitivethreats?30?STRATEGYARTICULATIONWhereareWHERETOCOMPETE?CustomersChannelsProductsGeographicmarketsTargetcustomersandsegmentsWhichcustomersareyoutryingtotargetorattract?Whichareyouwillingtoserve,butwillnotspendresourcestoattract?Whichwouldyouprefernottoserve?HowdoestheentityreachitstargetcustomersWhichdistributionchannelswillyouuse?Whatcustomersegmentscantheyreach?GeographicalscopeofbusinessactivitiesGeographiclimitstothebusiness?Local,regional,multi-local,national,international,orglobalplayer?Iflocal,whichlocalities?QualityandbreadthoftheproductlineBreadthoftheproductline?Qualityoftheproductline?Productbundlesoraseriesofunrelatedproducts?31?WHERETOCOMPETE?CustomersChanWHERETOCOMPETE?LEXMARKEXAMPLEStagedexpansion:national,theninternationalFortune1000companiesinbanking,insurance,retail/pharmacyindustriesforlaserprintersHaveuniquenetworkprintingneedsLargeprinterusersValue(notprice)orientedsegmentsConsumermassmarketforinkjetprintersUsedbroadestrangeofchannelsforcustomerfreedomTraditionalretailchannels(i.e.,dealernetwork,value-addedresellers,about5,000retailoutlets)OwnaccountmarketingteamstoselldirecttocustomersLaserprintersColorinkjetprintersAssociatedconsumablesuppliesMarkVisioncompleteprintermanagementsystemCustomersChannelsProductsGeographicmarkets32?WHERETOCOMPETE?LEXMARKEXAMPVALUEPROPOSITION

Acompany’sspecificpromisetoitstargetcustomersofthebenefitsitwillprovideatanexplicitpriceItanswerthefollowingquestions:Whoisyourtargetcustomer?Whataretheexplicitbenefitsyouprovidetoyourcustomer?Whatperceivedvaluedoyouprovidetothecustomerbetterthancompetition?Howmuchvaluedoyourcustomersattachtothebenefitsyouprovide?33?VALUEPROPOSITIONAcompany’s“Wewillservethefast-growingsegmentsof

thenetworkprintermarketwithhighquality,technologically-advancedproductstargetedtocustomerneedsatamoderatelyhigherpricethanundifferentiatedlaserprinters”.LEXMARK'SVALUEPROPOSITIONFORLASERPRINTERS34?“Wewillservethefast-growinFlashmemoryallowinginstantaneousprintingandupdatingofformsinmultiplelocationsDuplexprinting–abilitytoprintonbothsidesofpaperPapertraystohandlethreeormoresizesofpaperandformsTechnicalservicesupporttohelpwithsystemsdesignandproductproblemsTargetedtosegmentneedsHighqualityTechnologicallyadvancedCompetitivepriceSlightpremiumBankingPriceBenefitsWhychoose

Lexmark?SlightpremiumPharmacyTAILORVALUEPROPOSITIONTOVARIOUSCUSTOMERSEGMENTSAbilitytoprintprescriptionlabelswithoutjamming(duetospacingofrollers)TechnicalservicesupporttohelpwithsystemdesignandproductproblemsLEXMARKEXAMPLESegment35?FlashmemoryallowinginstantaBUSINESSMODELUnderstandvaluedesiresSelecttargetChoosethevalueValuepropositionDesignproduct/processProcure,manu-factureDistri-buteProvidethevalueServicePriceDefinebenefits/

priceSalesmessageCommunicatethevalueBusinessmodel:IntegratedsetofactionstoprovideandcommunicatethevaluepropositiontocustomersSegmentationValuepropositionAdver-tisingPromo-tional/PRValuedeliverysystem(VDS)EachBUmustaddressthese2issuestodefinetheirbusinessmodel

Illustrationofhowthevaluepropositionwillbeprovidedandcommunicated Identificationofexistingstrengthsthatcanbeleveragedandrequiredcapabilitiesthatneedtobebuilttobedistinctiveinchosenvaluedeliverysystem1236?BUSINESSMODELUnderstandSelectLEXMARKLINKEDVALUEPROPOSITIONTO

CHANGESINBUSINESSSYSTEMProductDesignProcessProcurementManu-facturingDistributionMarketing

&SalesAfter-SaleServiceProvidetheValueCommunicatetheValueHighly-customizedtocustomersegments12monthdesigncycleFullycross-functionalLimitedtospecifictargetsegmentsIn-housecontrolofcriticaltechnologiesOutsourcedonlynon-criticalcomponentsUtilizedpreferredsuppliersKepthighvalueaddedprocesses

in-houseImprovedflexibilityandreducedproduc