Center for Simplified Strategic Planning

Author: Dana Baldwin

  • Is Your Company a Good Supplier?

    Strategic Planning Expert

    by M. Dana Baldwin, Senior Consultant

    In your strategic analysis of your customers’ buying behavior, have you noticed that most of the time there are three major areas that come into play? 

    First: Brand.  The elements of your brand that impact your customers’ buying decisions include:

                Quality: Do the products we make and/or the services we provide stack up well against the quality expected by those customers?  How closely does your definition of quality agree with that of your customers?  Are your products the same every time and in adherence to the standards to which you have selected to make them? Are those standards published and are they generally accepted in your customers’ industries?  Do you deliver on time and to standard every time, every order?

                Service: How do your customers perceive your entire service package, from inquiry through order, delivery, documentation and even final acceptance and payment?  Are your people given sufficient authority that your customers are satisfied that they will be well taken care of, and that their contacts have the responsibility and authority to quickly make right anything which might go wrong?  When something does go wrong, are your people able to resolve the issues immediately, so that your customers know that their business is important to not only your company, but to each individual in your company?

                Relationship: As your people interact with your customers, are they conscious of trying to establish and build up the personal relationships so that your customers not only know where to go for help but trust that their contacts in your company know what they want and need well enough to do the job right the first time   With today’s internet buying and communication too many people think that establishing relationships is passé. However, in many companies the human relationship can be of utmost importance for your brand.

                Convenience: Is your company easy to do business with?  Do emails receive prompt response?  Are phones promptly answered?  Are inquiries addressed and followed through on quickly?  A company that doesn’t respond within a reasonable window of time is not convenient to do business with and will soon find themselves losing business to their competitors who are.  

    The second major area: Reputation. 

    Many of the attributes above also fall into this category.  Your reputation is your perceived value in the real world.  How customers see you will determine whether they think the effort of contacting you and buying from you will be worth the result.  Simply put, are you worth their effort to have you as a supplier?  To make buying from you the best option for those customers you must not only provide what potential customers want to buy, but you need to be known for “low-hassle.”.  If your reputation is good, you should get real opportunities to become the supplier of choice for those companies that need what you can supply. 

    The third area: Strategy. 

    Your strategies must include learning what customers really want and matching that with what you can supply.  Not only does this mean products and services, but also those “softer” elements of reputation and brand that must be good enough to warrant their making the effort to become your customer.  As outlined above, this includes the quality, responsiveness and the relationships that you must establish and sustain in order to be the preferred supplier for your chosen customers. 

    If you are having difficulties in any of these areas, your strategic planning needs to address each of these elements.  For guidance and leadership in your strategy development, please contact us at www.cssp.com.

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2012 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

    

  • How Do You Handle Under-performers?

    By M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert

    Have you ever had the situation in your company in which employees who seemed to have good skills, knowledge and capabilities simply were not performing anywhere near their potential?  What happened to them?  Were they kept in their current position for a long period of time?  Were they terminated or transferred within the company?  Or did someone take an interest in them and change their situation so they could do much better?

    When someone is under-performing, there are at least three possible outcomes.  First, you might just terminate their employment or they might quit out of frustration and attitude degeneration.  In either case, the problem with this is that the individual may be a good employee who is simply in the wrong place within the company.  By letting them go, you lose the investment you have made to hire and train them, not to mention possible future contributions this person may make when they are put into a position which is a better fit.  If you take the time to find out why they are under-performing, and determine where might be a better fit, you may well be able to help both the individual and the company.

    The second outcome is that you might “promote” them to another area of the company, getting rid of the problem in your area.  The obvious difficulty with this action is that the reasons for under-performance will not have been addressed and the consequent under-performing may not change.  Now you have simply passed on the problem to someone else, with little or no indication to the new supervisor that this person may need some guidance or mentoring to become more productive.

    The message sent by doing either of the above is that the company doesn’t really care about individuals, and is not willing to make the effort to help people adapt and grow.  It may be perceived as a lack of leadership as well.  None of this is lost on the other employees, who most often know what is going on with the particular individual who is not performing well.

    The third outcome is that you address the problem of under-performance directly with the person, taking the time to find out why their performance is not up to par.  Often, it can be not having the person in the right position within the company.  Actively mentoring and seeking a solution, can usually make everyone a contributor and winner.  By doing this, you are sending a message to everyone that every person is worthy of your making an investment of time and effort.  Setting an atmosphere of support and effective leadership should pay off handsomely in the long run with a triple win–for the individual, for you, the leader, and for the company.

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2011 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • What Kind of Leader Are You?

    by M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert

    What is your leadership style?  It may be very difficult to put such an all-encompassing subject into a few words, but let’s have a go at it.  What are the factors that determine your leadership style? 

    One of the first likely will be your vision: Where do you want to take your company?  Are you deeply involved in developing your strategic plan?  Do you encourage others to not just participate in the development of your strategies, but to be pro-active in suggesting different approaches, different strategies, and different perceived opportunities to expand, modify, change or re-direct the aims of the company?  Or do you tend to dominate discussions, forcing others to the same channel you are in, and squashing any different opinions?   

    Another is: how do you lead your people to accomplish your mission/vision? Are you one who tries to inspire others to excel?  Do you challenge people to do something different or better than they have been doing?  Do you lead by example rather than by dictate? 

    Yet another is: how do you treat your people?  Do you offer real encouragement and appropriate praise when it is due?  Do you give people enough room to make mistakes, learn from them and turn them into successes?  Or do you second-guess them, keeping them in their place so they won’t challenge you? 

    How do others perceive your leadership?  Do you take credit for others’ accomplishments, or do you give credit where credit is due?  Will people come to you for advice, or do they fear doing so will leave an impression they are not capable of doing their jobs? 

    Certainly there are more and different characteristics we could explore, but the questions above do help us focus on some of the keys to interpersonal relationships, which can build up the performance of your team or can tear it down, depending on how you actually are perceived by your people. 

    A good leader will work hard to set a good example.  This could mean you are one who comes in early and leaves late.  You clearly inform your staff about your strategic plan and how their work affects the overall success of that plan. You set a good standard when you encourage people to take ownership of their work, to take pride in what they do, and when you give out meaningful praise in a timely manner which is relevant to the job actually done.  You give credit where credit is due, fully supporting those who make good contributions to the company and team. 

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2011 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution

  • How To Provide High Value In Competitive Industries

    By M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert

    Providing superior value through a formal strategic planning process to determine what your targeted customers want is a key to success.  Good strategic planning not only identifies the targeted customer wants, but also permits a company to select their targeted customers (their niche) from the spectrum of customers in the total market.  Some companies get this concept and become ongoing winners.  Examples of this include Apple and Singapore Airlines.  Apple has been analyzed in depth, so let’s look at Singapore Air.

    In a recent survey, Singapore Airlines was named World’s Best Airline by Conde’ Nast.  The remarkable thing about this is that Singapore has won this award 21 of the 22 times it has been awarded.  How has Singapore been able to consistently provide such excellent service and maintain a good level of profitability for so many years?  How have they developed the capability to provide excellent value for so long? 

    Singapore Airlines operates one of the youngest fleets in the world.  Newer airplanes have a number of benefits for both operators and for customers.  Because the planes are newer, they are usually more reliable, having fewer breakdowns than older planes.  Because the planes are newer, they will likely  be more efficient to operate than older ones.  And because the planes are newer, customers will have up-to-date amenities and comforts, thus having a more enhanced travel experience. 

    Singapore also invests heavily in training their staff in all aspects of operating the airline.  The people of Singapore Air are trained to deliver excellent service in the cabin, on the ground and in the terminal.   Singapore actually has one of the lowest costs of operations of any airline, with a cost below 7.5 cents per seat mile, which is actually below many of the so-called budget airlines.  What is interesting is that Singapore actually staffs each flight with more than competing airlines.  They provide superior service on every flight.  Among frequent fliers, the reputation of Singapore Air is outstanding! 

    One more factor: Singapore runs the entire operation with a very small corporate staff.  Their administration costs are among the very lowest in the industry.  This helps the profitability of the airline as well.

    What is the point we are making here?  Simply put, in order to compete and compete well in an extremely competitive marketplace, a company must provide service and value at an appropriate price.  People will pay for results which reach their expectations.  This is true at every level of service and value.  For poor or minimal service, people expect to pay only a modest amount, so the perceived value is commensurate with the price paid.  For more exceptional service, with the perceived higher value, a company may realize a higher price and/or become the supplier of choice.  On occasion, one will encounter a company like Singapore Airlines that provides exceptional service and exceptional value, all at a competitive price.   

    How is this to be accomplished?  By focusing its efforts on those parts of the business which add value, and minimizing or eliminating those parts of the operation which do not add value or for which customers won’t pay, a company can be seen as exceptional.  This may be done across the spectrum of price and features, in commodity markets and specialty markets.  Excellence and attention to what really matters to the people who purchase your service or products are some of the keystones of a successful strategy.  As you develop your strategic plan be sure that you identify what differentiates you in the market in your customers’ eyes.  If you need assistance in developing your strategic plan to deliver high value to your targeted customers, please contact CSSP, Inc.

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2011 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution

  • How Has The “Great Recession” Impacted Your Company?

    By M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert

    When the economy goes through the tough times it has recently, a number of things start to change both inside and outside your company.  First, review your strategic plan, to account for the changing business conditions.  As a part of this, you look around to see what can be trimmed without harming your service levels and your products.  Next you look to see what technologies can replace your current processes and people, and if it is affordable at a time when you are tightening your belt and not spending money unless there is excellent justification for doing so. 

    You make every effort to do more with less, as is everyone else.  Maybe you do less promotion, go to fewer trade exhibitions and shows, cut your advertising budget, send one person on a sales call when in the past you might have sent two. 

    But what effects will these changes have on your culture and processes going forward, once the recession is behind us, and the economy is more robust? 

    Will you continue to be thrifty, as you are now with the recession so close behind us?  Will your prior habits take over again, or will you continue your closely controlled ways?  Good questions, and only you and your people can answer them for your company. 

    Are there some longer term effects which may remain with you for the foreseeable future?  For example, one possible effect of your tightened control on expenditures may have had both short term benefits and longer term impacts which may or may not be favorable to your company. 

    The short term benefits are usually pretty obvious: Better utilization of cash, more people contributing to the effectiveness of your company by working additional hours, taking on additional responsibilities, doing more with less, etc. 

    But at what price for the long term?  How have your company’s relationships with customers been changed?  Has this been for the better, or is there a negative impact possible if you do not go back to more personal contact?  How has technology impacted these relationships?  Are your customers willing to accept less personal contact during the slow times, but expecting to increase that type of contact when things improve?  

    Do your customers like the effects of technology, or are they merely putting up with it during the slow times because they know everyone is keeping a tight rein on expenses?  What will be the longer term use of technology that will help your relationships with your customers?  

    Inevitably, some will do just fine with the new levels of contact, less personal and remote.  Others will want to resume the more intimate, personal service that they enjoyed prior to the recession, and will resent not getting it if you do not respond to their needs as they were used to having them met. 

    Your challenge is to determine what each customer needs and to meet those needs.  And, don’t expect them to tell you without your probing to find out.  If you don’t change to fulfill their expectations, they may drift away, and you may suffer because of your insensitivity to their preferred mode of communication.  We suggest you work with your people to help them determine the best way to communicate with each individual contact so you meet their needs and preferences for communication, both formal and informal, so you nurture the relationships.  Your business will be healthier for it, and so will your customers’ businesses. 

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2011 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Final Steps: Follow-through and Monitoring

    By M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert

    Strategic Planning is a process, not an event.  It consists of a series of analyses and decisions which end up with an actionable strategic plan.  Coming out of the strategies are a series of actions which need to be carried out, either now or later. In an earlier article, we discussed Time to Start Planning for Growth – Step One: Analysis, and in a second article we asked, “Will We Be Ready to Take Advantage of the Improving Economy As It Arrives?”

    In the first article, we discussed most of the overall process of getting your company ready for the improving business climate now slowly arriving in the USA.  We analyzed the current situation, reviewing what our customers really want and need.  We reviewed what we are good at doing and what our competition does well.

    In the second article, we reviewed the actual process of developing a strategic plan, from incorporating our analyses to determining our strategies.  Based on those strategies, we selected a group of objectives to pursue.  Many of these will be handled and completed in the normal course of business.  These are the responsibility of the various functions within the company, such as sales, personnel (HR), accounting, manufacturing and/or service, etc., which have the responsibility to take the actions and complete them as part of their overall jobs.

    Then there are the selected objectives.  We define these as tasks which will not be completed in the normal course of business without being assigned to a team responsible for completing the task.  They are very important to enable the company to carry out its mission and strategies.  All these objectives are specific, time-related, and necessary to move the company in the direction the strategic planning team has determined will be the course and direction for the company for the next three to five years.

    Once these objectives have been selected, they are assigned to a team for the purpose of writing an action plan to complete the task.  An action plan is simply a verbal road map which is designed to accomplish the objective in a timely manner, with specific steps to complete the task decided upon, responsibility for completing each step assigned and a reasonable estimate of the actual time needed for each step made, in order to develop a time-line for completion of the objective.

    After accepting the action plan, the strategic planning team will schedule the individual steps of each action plan, in order of priority, so your team will concentrate on the most important objectives first.

    Monitoring is key to the success of your action plans.  Every month, your team must hold a short meeting to update each action plan and to schedule the day(s) on which the action steps which must be completed during the upcoming month will occur.  Here, the people who will do that action step compare calendars and agree upon dates to address that step.

    Execution is the key to completing an action plan, and monitoring of the action plan helps assure that the process will be followed and completed in a timely manner.  If your company is having difficulty making regular progress toward completing your action plans, we can help you with the monitoring process.  Contact us at: www.cssp.com and click on “Consulting” to select a consultant and send an email.

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2011 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Strategy Analysis 2: Maintain Strategy

    by M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert

    In an earlier article, we discussed the Expand strategy – Growing our selected market segment much faster than the overall segment is growing.  Because we will be grabbing a competitor’s share, it is an aggressive strategy, often involving considerable expense and time of key people.

    In this article, we will explore the characteristics of a Maintain strategy.  The book definition is to grow our market segment about as fast as the entire market is growing.  To many people, this appears to be a passive strategy.  This may be partly because they misinterpret the word Maintain to mean “keep the same volume”.  Maintain means “protect your current percentage market share” against competitors who want to Expand at your expense.  That’s not easy.  In reality, the Maintain strategy can also be one which requires a large investment and possibly an extensive amount of time for key personnel. 

    One example of a Maintain strategy is found in the “Cola Wars.”  Remember the blind taste tests?  Fundamentally, the cola market is made up of products from Coca Cola, Pepsi, Diet Rite, Fanta and other regional bottlers and store brands.  A large percentage of people who drink colas drink either Pepsi or Coke.  The rest of cola drinkers drink the regional colas or are strictly price buyers, purchasing whatever is low in price when they go shopping. 

    How do Coke and Pepsi market their products?  Generally, one can state that they are aggressive in marketing their colas.  They use a lot of in-store promotions, coupons, sales and extensive advertising and marketing investments to assure that they keep their core drinkers.  Both companies spend a lot of promotion money to keep their names in front of potential buyers.  One example is the Coca Cola 400, a NASCAR race held at the Atlanta Motor Speedway near Atlanta (Coca Cola’s headquarters).  A different approach is Pepsi’s Super Bowl ads – a recent Super Bowl had six different ads shown. 

    They each realize that many people form a lasting allegiance to their preferred cola.  Most people who like Coke strongly prefer Coke, and most people who prefer Pepsi strongly prefer Pepsi.  Few Coke drinkers will knowingly drink Pepsi, although many will drink it on occasion when Coke is not available, and, in all likelihood, the reverse is probably true.  But, whenever their preferred cola is available they will order it. 

    So why are Coke and Pepsi involved in marketing wars?  Our understanding is that Coke and Pepsi generally have two major objectives for their investments in promotions, advertising and marketing expenditures: First, they want to maintain their core product drinkers.  Second, they want to attract new cola drinkers to their product, so they may, at a minimum, keep their market share.  Of course they would like to grow their share, but keeping their share will still result in modest but real growth in volume of sales. 

    What are the lessons we can determine from this analysis?  A Maintain strategy is seldom a passive strategy.  Like the Cola Wars, it can be very expensive due to the high levels of spending on promotions, advertising campaigns, sales and coupons.  For you, it might mean having to invest in major changes to counter a competitor’s major move to capture some of your share. 

    As long as your goals are clearly stated, with rational approaches to the tactics taken, a Maintain strategy will make good sense for a number of your market segments.  Just don’t expect to accomplish it by going on “cruise-control”.  What doesn’t make good sense is to plan an Expand strategy in all of your segments. Very few companies have the resources to afford that.  If you are having trouble deciding on your strategies for some or all of your market segments, the Center for Simplified Strategic Planning stands ready to help you with your strategic planning.

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2011 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Is Success Your Worst Enemy?

    by M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert

    In the 80s, families, teens, many of us used to go to Blockbuster Video to select movies for our entertainment.  The business model was simple: go to the store, wander the aisles, select one or more videos to bring home, watch the videos and bring them back to the store within 3 days or so to avoid the late return fee. 

    A significant source of revenue for Blockbuster was the fee for returning videos late.  If a customer returned a video late, the total cost for the rental could well double or triple. In 2000, Blockbuster reaped nearly $800 million in late fees alone.  This was nearly 16% of operating revenue.  By 2009, this number had dropped to $134 million, or about 3% of revenue. 

    But in the market place, things were changing.  In 1999, a new startup appeared on Blockbuster’s horizon.  An upstart company, Netflix, started taking orders over the phone or on the internet for DVDs and mailing the DVDs to the customer.  They changed the terms of competition, too, by allowing the customer to keep the DVD as long as they wished.  The cost for this, instead of the late fee, was covered by charging a flat monthly fee for the service.  Blockbuster tried dropping the late fee a few years ago, but for Blockbuster this meant that some of the more popular videos stayed out longer, thus impacting their rental revenue. 

    When other strategies didn’t work, Blockbuster entered the rental of videos by mail segment to try to compete directly with Netflix.  What this accomplished was to lower the average contribution per rental to under $2.80 per disc, about a dollar below their prior level.  

    Even then, the management of Blockbuster considered Netflix to be only a sub-segment of the market.  By 2002 Netflix had gathered enough market share and volume, to go through an IPO and yet Blockbuster still dismissed it as a “niche service”. 

    More recently, video rental services, including Netflix, have moved to downloading movies directly to DVRs in the home.  This makes delivery of a movie essentially instantaneous, saving a trip to the video store or waiting for the mail to arrive.   Not only did this service allow people to rent a movie on impulse, but it further cut the heart out of the Blockbuster model. 

    Blockbuster’s innovative business model helped generate the growth of home video viewing and helped sell VCRs and, later, DVD players.  It also helped generate billions in revenue for Hollywood.  But, its success led to its own failure.  Blockbuster was hugely successful early on, with over 9100 stores.  Because it was so dominant for so long, it missed the changes in the market.  When the changes became so obvious, that they could not be ignored, Blockbuster still pooh-poohed the evolution and moved too late to accept the changes. 

    The obvious lesson here is that Blockbuster could not or would not accept that their market was changing.  Their assumptions about the direction of their markets contained the fundamental error of assuming that the direction they were going would continue forever because they were good at it and dominated the market place for most of their 25 year history.  They refused to accept the facts that their market was evolving and changing, and kept their model intact – in effect, keeping their heads in the sand. 

    There are 4 types of assumption errors: Missing, Wishful thinking, Excessive Conviction and Naïve Projection.  My “assumption” is that Blockbuster was primarily guilty of missing an assumption and wishful thinking, helped by their need to satisfy their parent at the time, Viacom, who likely acquired them as a Cash Cow. 

    How does a company avoid making this type of assumption error in its strategic planning?  All assumptions are subject to errors because they are only educated guesses, not facts, and must be regularly reviewed for accuracy and how well they fit the current conditions in the market.  In addition, a reality check that asks, “What could go wrong with the results of your assumption,” should be performed.  If you need help in making and reviewing your assumptions, as a part of your strategic planning, please contact the Center for Simplified Strategic Planning, Inc. at www.cssp.com.

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2010 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • How Agile is Your Company?

    by M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert

    Great Companies develop Strategic Plans which incorporate agility in execution.  What is generally meant by being agile?

    Most companies intend to carry out their goal of being agile by becoming more responsive, more sensitive to meeting their customers’ needs and preferences and doing all of this more rapidly.

    How does a company become more agile?  Much of the process of becoming agile is more easily said than done. In order to be more agile, the culture within the company has to change.  Control must be ceded down further into the organization. This means that senior managers must do a number of things which will lessen their direct control over what is happening day to day, communicate much better and at deeper levels within the company, and change the way in which their subordinates operate.

    Many companies dictate exactly what an individual may do, and may not do, in the performance of their daily jobs. In order to become more agile, and to become more effective at being agile, the whole approach must shift. The subordinates must have a clear understanding of what is wanted in terms of performance and actions in order to carry out the mission of the company. This means that their instructions must evolve from “you will do this task, this way” to “this is the result we want from you, and you have the freedom and the responsibility to act within these parameters to accomplish your job.”

    To do this effectively, the senior managers must develop effective communications with each individual, must develop sufficient trust in the capabilities and training of each individual – that each one knows and understands what the overall goals and strategies are for the company, and how each of their actions may have an impact on the ultimate results, including the overall satisfaction of the individual customer.

    Agile companies tend to listen well to their customers. When there is good input from customers that may affect the course and direction of the company, each person is encouraged to pass along this information to the higher-ups in order to take advantage of the broader insight offered by the customers. To do this, everyone needs to know the strategic direction of the company, and how their actions may influence the results.

    In the long run, the company must develop and maintain a high level of trust, both from manager to subordinate, and from subordinate to manager. To effect this, there must be good communication each way in the relationships, so that the unusual situation may be isolated and dealt with at the proper level, but also, and more importantly, so that the daily processes become almost routine, with their quick response, proper results and high levels of customer satisfaction the expected and achieved norm.

    To do this effectively, a company needs to have a clear, concise and actionable strategic plan. It needs to communicate this plan throughout the company, so that every person perceives how his or her actions may impact the results for the company. It means that managers must develop and use effective communications within the company. And it means that customers will perceive the improved response times and results so their satisfaction with the company is higher. This should result in improved relationships with customers, and within the company.  If your company needs effective, efficient guidance in developing your internal and external strategies, contact the Center for Simplified Strategic Planning Inc. at www.cssp.com

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at .

  • Strategy Analysis: Expand

    by M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert

    In strategic planning, there are five basic strategies one may pursue: Expand, Maintain, Contract, Milk or Withdraw.  The most aggressive strategy is Expand.  What does an Expand strategy encompass?

    First, let’s define the Expand strategy so we have a basis on which to base discussion.  The dictionary defines expand as: to increase the extent, number, volume, or scope of, to enlarge. We further define an expand strategy as one in which we are growing significantly faster than the market or market segment is growing overall.

    To follow an expand strategy, a company must decide to provide the resources which will support the targeted growth rate.  It implies that the company’s growth will absorb much of the real growth of the markets in which the company is competing.  It also implies that the company is willing to take on competitors in order to take market share from them, in addition to absorbing the growth in the market place itself.

    Before we select the expand strategy, we need to look in depth at each market segment to see whether it will qualify for an expand strategy.  What are the requirements that a market segment should have in order to be eligible for an expand strategy?

    First, we need to be able to have sufficient resources, both people and money, to properly support the strategy to expand our sales volume in each affected market segment.  An expansion strategy can be quite expensive, and will likely absorb a lot of time of some key people in your company.

    Second, it should be in a relatively attractive market.  We use a 3 x 3 matrix to demonstrate how attractive a market segment is, and also how strong a competitor we are relative to our own competition.

    When you look at the matrix above, you can readily see that the market attractiveness for the suggested strategy of expand is high.  Notice too, that the competitive strength (vertical axis) may range from being a weak competitor/new entry to being a strong, dominant competitor.  Our goal over time is to move our competitive position up the axis to the strongest possible competitive position.

    Often it won’t make a lot of sense to expand in a less attractive market segment.  The one exception for this is in a moderately attractive market in which you are the dominant player.  If the potential for a good long term reward is present in a moderately attractive segment where you are a strong number one, then expand should certainly be considered.

    Many companies simply do not have the depth of resources – usually people resources – to support too many expand strategies.  Companies need to select the few markets where they want to expend the resources to significantly gain market share.  Focusing resources is paramount to any plan’s success – so your team should not try to expand in all markets.  Rather, we suggest pick the 2-3 that, given the effort, will deliver the most bang for your buck.  We find that if you force the team to pick only 2-3 expand strategies immediately, a few “winners” will be chosen.  This selection of only a few “expands” helps ensure that a team will be successful on the chosen markets.

    In conclusion, an expand strategy is a strong bet on your company’s ability to grab market share at a rate higher than the market is expanding, with the goal of increasing your return on investment over time.  This means you will aim to increase your top line sales and bottom line profits at a rate higher than the additional costs you will be incurring in your expansion efforts.

    For detailed directions for using the expand strategy in your Simplified Strategic Planning process go to Simplified Strategic Planning book.

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2010 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Next Steps: Will we be ready to take advantage of the improving economy as it arrives?

    Strategic Planning Expert
    Strategic Planning Expert

    by M. Dana Baldwin, Senior Consultant

    In my prior article (“Time to Start Planning for Growth – Step One: Analysis“), we discussed the lessons we should be learning from the major slowdown in business experienced during the recession, and how to analyze them so we would be positioned to plan to grow as business improves.

    As indicated in the previous article, we tried to learn what our markets would be looking for as their business improves.  We studied the competition to learn how they were reacting to the slowdown in business during the recession.  We probed for weaknesses and looked to see where our competitors pulled back and possibly even lowered service levels.  We tried to anticipate what the market would be asking for as business improved in order to be positioned to better serve the market in the future. 

    Now that it appears that the recession is ebbing, and growth is returning to the economy, what steps should our company be taking to establish strategies that will lead to improving our sales and our profits? 

    First, we need to revisit our strategic planning.  In order to take the best advantage of our earlier work, we must review our market segments to obtain the best information on which we will base our strategies.  Especially important is the updating of our assumptions.  The efficacy of our work on assumptions will guide our future course and direction, so the importance of doing this well and thoroughly cannot be overemphasized.  Good work here will mean we likely will have appropriate strategies for our core market segments. 

    Another key part of strategic planning is our focus on new opportunities.  Part of our work to establish our future course and direction will be started with our brainstorming of perceived opportunities.  At least some of these perceived opportunities should come from the analysis we did in our pre-planning efforts (discussed in the prior article).  These efforts should have resulted in our looking for what our customers and prospective customers will be seeking as they recover, and should be targeted at responding to their anticipated needs and preferences. 

    Once we have established the products and services which our markets – both current customers and future prospects – will be seeking, we need to determine what our responses will be.  We need to assess each opportunity to determine how each one will address the future needs and preferences of our prospects, and how each one will fit into our future.  How does each relate to our capabilities and our strategic competency?  Is each opportunity a good fit with our course and direction?  Selecting those which fit our future direction and which utilize our strengths and competencies, and which meet the anticipated needs of our customers and prospects is a key to our future success. 

    Next step is the actual execution of our strategies and our action plans.  Action plans are simply the step by step roadmap which will be used to accomplish our objectives.  A detailed action plan with responsibilities assigned and dates agreed upon is the key tool in accomplishing the objective.  Monthly update meetings are used to keep our action plans on time.  In the monthly update sessions, the action plan leaders report on progress, confirm schedules for the upcoming month and make any updates or changes needed to make the action plan effective.  Pulling all this together and getting our strategies and action plans executed effectively are keys to our profitability in the future. 

    If you’ve been dragging your feet about doing SP because of the cost or uncertainty, “bite the bullet, and get going”.  It’s ultimately about execution, but intelligent formulation of strategic direction is necessary first. And the time is now! 

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2010 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Time to Start Planning for Growth – Step One: Analysis

    By M. Dana Baldwin, Senior Consultant

    Strategic Planning Expert
    Strategic Planning Expert

    As we get further into 2010, the time has come to start planning for the uptick in the economy.  No, it likely will not be a “V” shaped recovery.  And, if the government and the Federal Reserve get it wrong, we could have a “W” shaped double dip rather than a recovery.  But, sooner or later, the economy will recover, and you would do well to plan for it and to be ready when the indicators turn positive essentially across the board.  

    So, what is involved in this planning for the recovery?  To be ready, there are a number of areas you should check out and be ready for.  First: will your customers after the recovery begins be the same customers you were selling before and during the recession?  Have you serviced them well enough that they will continue to want to do business with you?  Do you have the relationships deeply enough established that you will continue to enjoy their business in the future? 

    Second: What will you be selling in the future, as compared with what you sold prior to the slowdown, and with what you actually were selling during the slow period we are just beginning to emerge from now? 

    Third: What do you want to sell going forward?  Are there any lessons you have learned about your business, your products and services, that can translate forward into more business, more profits and better products and services for your customers, present and future?  What did you do well for your customers during the slowdown, and what did you learn about yourself, your products and services, and your customers that will make your future better and more profitable? 

    Fourth: Why were you able to sustain your business during the recession?  What was it that your customers valued that kept your business viable?  What did you stop doing during the recession that impacted your bottom line, either positively or negatively?  What did you learn from the changes you made in order to get through the tough times?  How can these lessons be applied toward ensuring success as business improves? 

    We have posed a lot of questions above, and getting the answers will involve considerable effort and introspection.  The challenges of the future must be analyzed objectively and systematically in order to learn from the events so we may prosper as the economic activity improves.  At the same time, we must be objective about making changes to support increased activities, so we do not lag behind the curve and miss opportunities, and so we don’t leap too far, burdening our companies with increased costs and commitments. 

    This is where a formal, well-structured, objective strategic planning process comes into play.  In order to be properly prepared, with milestones for making changes, and contingency plans for various scenarios, a thorough planning process is key to steering toward success.  Without an objective analysis of the past, along with a realistic set of goals, objectives and strategies to follow for the future, you may not be able to take advantage of the opportunities which will come along as the economic atmosphere improves.  Planning is essential for success, and this planning should likely start soon so you are prepared when the tide changes.

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2010 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.