Strategy - assessment template

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Information about Strategy - assessment template
Business & Mgmt

Published on May 20, 2009

Author: michael_ling



Application of Value Chain in Strategic Assessment and Marketing.

1How to conduct a strategic fitassessment – a value chain approachUpdated version - 2013Michael Ling

2A Value Chain Approach

Approach 3Step High-level assessment of current assets capabilitiesand commercial relationships Strategic Assessment of Current Organisation (Assets, Capabilities and Commercial Relationships) Content Marketing Transport Billing & Customer Product Sales and Aggregation Service and and Collection Care Development Distribution and Provioning Branding Access Management Enterprise Network Management support Capability IT Infrastructure Alliance and Supplier Management People and Organisation Management Financial and Corporate Services Key Partner and Commercial Relationships AAA BBB

Approach 4 Step Assessment of assets capabilities and commercial relationships for each strategic option Strategic Option 1 Strategic Option 2 Content ContentMarketing Transport Billing & Customer Marketing Transport Billing & Customer Product Sales and Aggregation Service Product Sales and Aggregation Service and and Collection Care and and Collection Care Development Distribution and Provioning Development Distribution and ProvioningBranding Access Branding Access Management Management Network Management Network Management IT Infrastructure IT Infrastructure Alliance and Supplier Management Alliance and Supplier Management People and Organisation Management People and Organisation Management Financial and Corporate Services Financial and Corporate Services For each element of the organization’s value chain we need to identify the core capabilities and assets for each specific strategic option Pricing • Description of the Capability • Why the capability is important Segmentation • Description of the Capability • Why the capability is important

Approach 5Step Identify Gaps for each Strategic OptionIdentify gaps and priorities and consider how they should be closed internallythrough acquisitions or business partners and alliancesWe conclude options based on the overall fit of each strategic option with the keyissues and suggest next steps and priorities VC Segment /Capability Significance of Gap Priority How to fill the Gap A xx H Internal Marketing B x M Internal + Partner and C x L Acquisition ? Branding (example) D xxx M Internal E x M-H Partner

6The Framework (a sample)

Marketing & Branding Commercial market 7Business customers are less receptive to mass marketing and branding messages. Marketing needscapability to identify and campaign focus on customer base to promote 1-2-1 sell via sales teams andalliance partnersCapability Description Driver Detailed • Precise information for eg matrix segmentation • Customer needs are diverging as • Primary research and rigorous analysis of customer products become more sophisticatedunderstanding • Exploit opportunities for tiered marketing base of customer as customer requirements mature base Pricing based • Less price sensitivity than mass market for • Greater opportunity for value add on value add personalised service mix. Value add factors: decision making since decisions are not pure price functionality, established relationship, ongoing more complex over a wider portfolio competition support, flexible bundling • Marketing channels and product promotions be • Ability to address marketing messages One to One tailored to target customers eg demos at trade directly to target customer marketing conventions, roadshows in target locations, IT dealership/VAR- based promotions • Much of the application portfolio will be from • Access to extended customer base; new Co- marketing companies with their own valuable brand marketing channels; strengthened value and branding • High level solutions branding is needed to give proposition; complementary expertise stability as product packages change

Marketing and Branding: segment focus 8The SME market is not uniform. Needs for vertical and horizontal solutions vary widelybetween and within segments. It is essential to conduct market research to understandcustomer base, target SMEs and develop products and services to address their needs... SMEIndustry Segmentation•Import/export trade Client locations•Wholesale/retail •SME density•Finance, Insurance, etc Supply/Distribution Partners •Industry mix•Transport •Community of interest•Manufacturing Local Supplier Mainland Local Retailer Foreign A Supplier B C Importer DProduct and Service needs SME Trading Characteristics Service Support needs•Fixed/mobile voice •Employees, client branches •IT/SI consultancy•Segment packages •Telephony, IT & e-coms usage •Technical Helpdesk•Managed business services •Supply chain characteristics •Account Managers•Supply chain integration •Number/location suppliers •Call centre support•B2B e-marketplace •Type/number retail outlets•Applications hosting •Geographic markets

Product Development Commercial market 9SME product development will require capability to co-ordinate elements from a variety ofinternal and external sources, to integrate E-applications in the operational environment anddeliver using a common portal frameworkCapability Description Driver • Capability to coordinate elements from internal and • End-to-end nature of solutions requiring Integrated external sources and integrate applications in the ability to package internal and externalcross-functional operational environment products to provide solutions project • Solutions are getting more complex and management require implementation and integration capability Mass • Products should be designed to be scaleable and to • Potential to realise the cost advantages, support incremental additions speed of implementation and flexibility customised of mass customisation solutionsComplementary • Applications will be embedded in a complex • Product development needs deep cross- product operational environment and delivered using a platform technical expertise to develop development unified portal interoperable solutions with ASPsMicropackaging • Product development will need the capability • Optimise current portfolio and gainof products for leverage existing infrastructure and platforms to added value from existing base of service provide new combinations with potentially different products bundling pricing models

Product Development Commercial market 10Product development focus is changing towards co-ordination of inputs and technologies in acomplex environment. Internal/external cross-functional collaboration is the KEY to success. •Service portfolio mix •Market trends •Business model •Competitor Analysis Joint working with Internal Units Complementary development Conception with external partners Marketing and Branding •Customer needs •Functionality Hardware & •Innovations CPE Suppliers Portal •Portal framework •Lead time Provision and •Content manage- Management ment Feasibility Analysis Network •Scaleability Provisioning •Scaleability Systems •Interoperability Integrators and Operations •Lead time IT and Technology •Support system Management functionality Product Design •Data models Service •Synergies •Interfaces ASPs Provision and •Lead time •Customisation Management •CPE functionality Lifetime Billing •Billing enhancement Billing functionality

Sales and Distribution Commercial market 11Selling to the Commercial market is primarily accomplished through account teams thattarget and customise sales approach for each SME.Capability Description Driver • Strong account management capability will be • SME needs are unique, based on required to understand and develop solutions for differing size, industry, location, etc. Account specific customer needs, supported by integrated • SME’s have unique needs which cannot Management systems (internal, supplier, alliance), be satisfied fully by off-the-shelf propositions In-depth • Account sales team (internal and alliance partners) • Sales team may need to educate off-Net segment and collectively need technical understanding across SMES product solutions range knowledge of vertical segment • Knowledge essential to maintain knowledge needs credibility with target companies • Permanent outlets in commercial districts can attract • Sales prospects will want to see Leverage walk-in customers, provide demonstration site for solutions demonstrated in a real multiple prospects and be a retail outlet for immediate sales environment and talk through the channels • IT dealerships are potential sales/distribution technology/service elements with channel extensions, with staff qualified to knowledgeable staff demonstrate applications and SI solution aspects • On-line product/service catalogue, contacts, self- • Extends sales channels and has major On-line provisioning capability potential for integration across back- management office functions

Content Aggregation and Management Commercial market 12E-commerce Portal provision is increasingly an extension of product development for SMEswhich needs to be integrated with overall product development approach for all lines ofbusinessCapability Description DriverIntegration with • There is an accelerating trend towards cross- • Cross-functional product development firm-wide platform applications which are front-ended with management is needed to systematise product internet portals interfaces and leverage existing development infrastructure and processes • Portal platform should be designed to support • Flexibility and open standards are major Scaleable smooth expansion of the application base and factors in gaining competitive advantage platform and incremental addition of services without further through speedy implementation applications customisation Streamlined • Content management should support real-time data • Content management is a core content and changes, be automated, maintain consistent data capability which has to be right first time transaction descriptions and fully reflect business terms of users and all the time managementInteroperability • Solutions should have a bottom line narrowband • SME sales are to a community rather capability (in the medium term) and reflect than an individual, so all parties need toin a community industry/community standards for business be able to play at some level environment exchanges

Transport and Access Commercial market 13Transport and Local Access are critical for delivering end-to-end solutions to wherecustomers need them, but is quickly being commoditised and is increasingly not a source ofsustainable competitive advantageCapability Description Driver • Reducing basic access costs and shifting customer • Commoditisation of transport and Low Cost/High value to added services and solutions access caused by hyper-competition • Compete with low fixed cost to customer, increasing • Regulatory unbundling of Telco and Bandwidth perception of value by shifting cost to high value cable local loopTransport/Access portions of propositions • Customer looking for ways to reduce fixed costs of access • Giving customer common experiences and • Customers want access to information Multi-platform applications in the office, at home (tele-commuting) and applications wherever they are Delivery and in the field (mobile). • Most competitors are limited in their Capability • Making value-added services always accessible ability to provide both fixed and mobile • Enable e-commerce anywhere applications cost effectively • Ability to transact business in the field - at customer • Significant value add for business will be Mobile Data locations, away from office, etc. access to office applications and Capability • Ability to have access to information and solutions in solutions anywhere they transact Hong Kong and Greater China business • Reduce perception of fixed cost for customers • Customers increasingly unwilling to pay Cost Effective • Minimum fixed costs associated with service for accessAccess Network provision • Access still fundamental bottleneck and cost of service provision

Service Provisioning Commercial market 14SME service bundles need co-ordination for service management, to ensure that the wholesolution is delivered in a co-ordinated and timely fashionCapability Description Driver • Systems and processes need to support integrated • Alignment of logical and physical Co-ordinated management of service activation, co-ordination and processes is increasingly complex one-step timing cross-service, but users will expect the provisioning package to be available from day one • External elements, logical and physical components • Full provisioning capability will be Co-ordinated (eg CPE, human resource, host system activation) critically dependent on third parties so supplier and required to complete service offering supply chain integration will be a major alliance issue logistics • On-line customer interaction for information and • Gives customer hour capability action on service provisioning, account checking, independent of business hours and staff Self follow up progress on order etc availability provisioning • Potential to cut costs through direct service activation and amendment

Billing and Collection Commercial market 15Billing systems are critical for the SME segment. Flexible and powerful billing systems areneeded to support charging and billing across multiple services, tariff bundles and chargingmodelsCapability Description Driver • Ability to create individualised billing formats • Flexible billing is a major factor in which are tailored to requirements customer satisfaction and potentially Customised customer retention billing • Single billing model is not sufficient to meet their needs Integration of • Billing/charging capability to take elements from • A new range of services are transactional a variety of pricing models and integrate these developing that are not appropriately elements into the billing stream and bill format charged through current models, Support for • Multiple permutations of cross-bundle charging • Typically, agility and innovation in cross-service and discounts potentially applied across a range tariff/service bundling is constrainedtariff innovation of services mainly by limits on billing system functionality.

Customer Care Commercial market 16Differentiated customer care by segment service level and integration with other functionsand processes is required to be able to retain and enhance customers Integrated CRMsystems and processes are vital to supprt this Account management teams will be criticalcustomer care elementCapability Description Driver • Combination of fast customer identification through • Ensuring that the most important CLI customer code identification etc and fast links to customers, at a minimum, get the best Tiered relevant profile on CRM systems possible service and that all customers customised get consistent service levels service levels • Business customer expectation for service level agreements for solutions • A smooth process whereby customers are able to go • Troubleshooting complexity is increased Streamlined directly to technical support sources when they by complexity of service and its escalation and recognise problems and are seamlessly managed technical elements, but users will expect resolution of through resolution of (initially) unknown service a holistic responsetechnical queries problems • Customer is able to access a range of services • Customers increasingly expect to have On-line self- electronically, e.g. bill payment, reporting of non- on-line alternatives/supplements to real- urgent issues, review of service portfolio and, time telephone contact with CRM by increasingly, to interact transactionally • Customer self-management can reduce customer CRM staff costs and workload

Enterprise Support Capability Commercial market 17Important enterprise support capabilities will be required to address the E-SME opportunity.These capabilities tend to cut across the traditional value chain elements. For the E-SMEoption, we see three critical areas of enterprise support required. Network Management IT Infrastructure Alliance and Supplier Management People and Organisation Management Financial and Corporate Services (including IPR management, Tax, Legal, Risk Management, Procurement) Capability Description Driver • Mediated, potentially interactive, access to elements • Integrated support systems, coupled of a single data model of all company and linked with data warehouse techniques, are IT Integration supply chain information available, at suitably vital to give global access to company, aggregated/ secured level to staff, customers and market and supply chain info suppliers • Capability to manage alliances and suppliers across • Alliances and partnerships will be Alliance and functional and value chain element boundaries. essential to complete service offerings, Supplier • Taking a corporate level approach and identifying develop innovative products and give Management synergy potential across the industry value chain. complementary expertise in sales, marketing and customer care

18Gap analysis

Gap Analysis 19Capabilities are analysed in terms of the significance of gap, relative priority, and how to fill the gap VC Segment /Capability Significance of Gap Priority How to fill the Gap Customer Understanding XXX H Internal/Partner Marketing Value-based Pricing XX H Internal and Branding Co-Marketing and Branding XXX M Internal / Partner 1 to 1 Marketing XXX M Internal / Partner Project Management XX H Internal Product Mass-Customised Solutions XX L Internal / Partner Development Joint Product Development XX H Internal MicroPackaging for Bundling XX M Internal / Partner Account Management Account Management XXXX H H Internal / Partner Internal / Partner Sales and Segment/Product Sales and Distribution Segment/Product Knowledge Knowledge XXX XXX M M Internal / Partner Internal / Partner Distribution On-Line Management On-Line Management XXXX M M Internal / Partner Internal / Partner Leverage Multiple Leverage Multiple Channels Channels XXXX M M Internal / Partner Internal / Partner

Gap Analysis 20 VC Segment /Capability GAP / Strength Priority How to fill the Gap Integrated Product Dev. XX M Internal / Partner Content Aggregation and Scalable Platform/Applications X H Internal Management Streamlined Content Mgmt XX M With Partners Interoperable/Community X M Internal Environment Low Cost/High Bandwidth Transport XXX M With Partners Transport/Access and Access Multi-platform Delivery Capability XXX M Internal / Partners Mobile Data Capability XXX H Internal / Partner Cost Effective Access Network XXX H Internal / Partner Service One-Stop Provisioning X M With Partners Provisioning / Activation Partner Logistics coordination XXX M With Partners Self-provisioning XXX M Internal / Partner

Gap Analysis 21 VC Segment /Capability Significance of Gap Priority How to fill the Gap Tiered, Customised Service Levels XX M Internal / Partners Customer Care Stream-lined Escalation XXX M Internal On-line Self-Care XXX M Internal / Partners Broadband Network Deployment & X H Internal / Partners Mgmt Enterprise IT/Network Integration XX H Internal / Partners Support IT Integration XXX M Internal / Partners Alliance & Supplier Mgmt XXX H Internal

22Next steps

Next Steps 23  Both opportunities will require XX to develop or acquire a range of new capabilities that have either not been required in its current business, or in which they have not developed the sufficient level of capability required.  Both opportunities will require a significant amount of partnering. XX must carefully consider how they can build the appropriate partnering capability and culture to be successful initiating and managing the number of strategic and tactical partnerships that will be required. There are still a number of questions that need to be addressed:  Timing - can we pursue option #1 now, and focus resources on early success?  Do we have a clear enough view of the economics of the option, its financial impact and the risks involved?  Can we bring in the right resources (people, funding) and establish the right partnerships quickly?  Segmentation analysis - have we developed enough knowledge of the customer segments and their specific needs to appropriately target our efforts, and how do we proceed with gaining this market knowledge? The next recommended next steps are:  Develop detailed business models of the options to provide input to decision  Decide on which strategic option(s) to pursue  Develop long-term strategic goals based on option(s) selected  If the option is chosen, move quickly on initiating a partnership with Y  Inform Organisation Design and Business Planning effort of strategic focus  Review Technology and Systems Strategy with respect to strategic options chosen

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