Analysis Quick Takes

Transcription

1 Analysis Quick Takes SLA Presentation October 15, 2014 Derek Johnson

2 Agenda 1. Brief Introduction to Four (4) Analysis Techniques: Issues Analysis Scenario Analysis SWOT Analysis Win/Loss Analysis 2. Acknowledgements

3 As Chief Executive Officer and Managing Director Worldwide Services of Aurora WDC, Derek Johnson spends most of his time guiding the overall strategy of the business and directing the firm s external consulting opportunities with clients. Prior to this promotion in March 2010, he served the prior seven years as Chief Operating Officer and Director of Research with the firm. Chief Executive Derek.Johnson@AuroraWDC.com Prior to joining Aurora in 2003, Mr. Johnson was in the Investment Management industry as an account and portfolio manager. He served as Wisconsin s SCIP chapter co-chair from and remains on the steering committee, was Program Chair of the 2009 SCIP International Conference, and is a SCIP Catalyst Award recipient. He is also a Chartered Financial Analyst (CFA), with this designation conferred upon him in 2001.

4 Analysis Frameworks At its most basic definition, an analysis framework is problem solving tool. It is a way in which information can be assessed and analyzed in a particular context to solve a specific issue. Not all frameworks are created equally, and not all frameworks are appropriate to answer any strategic question. The framework used to assess data should match the issue.

5 Issues Analysis

6 Outline Issue Analysis Introductory case: McDonald s issues Overview Advantages Limitations Process for Applying the Method Complimentary Analysis Methods

7 Introductory Case Study: McDonald s Issues McDonald s was founded in 1940 by businessman Ray Kroc and is now headquartered in Oak Brook, Illinois. McD s faces a variety of external challenges, some like nutrition concerns, employment, global growth have become issues. Many of these issues are listed and described in some detail at: Already facing increased competition from formidable rivals like Subway and fighting to grow market share on many fronts, it now has government policy makers, activist groups and regulators in many countries putting the company in their sights and want to restrict its discretion to operate.

8 A Current, Strategic Issue for McDonald s

9 Introductory Case Study: KITs/KIQs for McD s Using Issue Analysis What legitimate criticisms is McD s receiving from its key stakeholders? In which countries are laws or rules changing that impact McD s operations? Are there laws or regulations changing anywhere around the globe that can reduce McD s discretion to operate? Relative to identified issues, which groups support us? Which ones oppose us? What institutional arenas do we need to be active in to influence public policy making? What actions should McD s be taking to level the competitive playing field level?

10 Process: Before an issue can be analyzed, it has to be identified. Three tasks are precursors to issue analysis: - Identifying issue categories - Identifying their source - Assessing their evolutionary development Information-search techniques for identifying issues: - Content analysis - Scenario development - Survey techniques

11 Scenario Analysis

12 Short Description A scenario is a detailed, consistent description of what the future may look like and is based on a set of assumptions that are critical for an economy s, industry s, or technology s evolution. Scenario analysis is a structured way of developing multiple scenarios that address two common decision-making errors under-prediction and over prediction of change. The overall purpose of scenario analysis is to build a shared baseline for strategic thinking and provide strategic early warning.

13 Some KITs/KIQs for Using Scenario Analysis Is the industry an attractive one for us to enter or to remain in? What technology platforms will be dominant in 5-10 years? Will personal computing be done primarily by mobile telephony, or other means in the next decade? What new applications and uses can be found for our current products and services? Can/How can our company influence the industry forces that are reducing our profits?

14 Process for Applying the Technique Follows systematic and recognizable phases. The process is highly interactive, intense and imaginative. Phases of Scenario Development:

15 Introductory Case: The Future for Microsoft Founded by Bill Gates and Paul Allen in 1975, Microsoft is one of the most successful computing-industry companies of the last 3 decades. It has seen 3 major shifts occur, all of which it successfully navigated from the front: 1) MS-Dos, 2) Windows, 3) Office Suite. Today, it faces a new breed of challenges and rivals, from large rivals like Google, Linux, Apple, open sources, the cloud, and its own momentum. What will the future look like for Microsoft? Will it still lead in 10 years?

16 SWOT Analysis

17 Background: The 4 Elements Strengths : Characteristics of the business or a team that give it an advantage over others in the industry. Opportunities: Chances to make greater profits, attractive factors that offer reasons for the organization to develop Weaknesses: Characteristics that place the firm at a disadvantage relative to others. Threats: Elements in the environment that could cause trouble for the business.

18 Strategic Rationale SWOT forces managers to better understand the factors that can have the greatest impact on an organization s performance. These factors are the organization s strategic issues - existing either inside or outside the organization that are likely to have a major impact on the firm s ability to meet its competitive Constant review of strengths, weaknesses, opportunities and threats is required as issues evolve, change.

19 List and Evaluate Factors over which you have more control Strengths: Advantages that make an organization more competitive than peers. Beware of internal biases- stick to the facts Weaknesses: Area where organization performs poorly, has inferior capabilities and will keep it from achieving its objectives Opportunities: A situation in the external environment (trend or overlooked need) that supports the demand for a product/svc. that could enhance position Threats: Unfavorable situation, trend or change in external environment that threatens organization s ability to compete (barrier or constraint) Factors that you have less control over

20 Case Study: ABC Bank in Hong Kong The ABC Bank is one of the more conservative banks in Hong Kong. Advantages: deals only with inter-banking and corporate banking. Has no bad debts, and is flush with cash. Disadvantages: It remains very low profile within the HK market. Opportunities: It is looking to grow out from its Hong Kong base and has unused capacity Threats: There is always political uncertainty, and the competition on the mainland is fierce.

21 Case Study: ABC s Enhanced SWOT External Internal Strengths S1 - Cash rich S2 - Steady cash deposits (US $300,000 per month) S3 - No bad debt Weaknesses W1 - Lack of public awareness W2 - Weak technological systems W3 - Lack of staff development Opportunities O1 - Foreign trading /market O2 - Acquire new technology from foreign banks Threats T1 - Political changes from China T2 - Highly competitive banking Strengths/Opportunities Strategies S1, S2, O1 - Setup an affiliation with a US (FDIC) bank or saving and loans (F) Strengths/Threats Strategies S1, S2, S3, T1 - Expand boundary to foreign banking community (C) Weaknesses/Opportunities Strategies W2, O2 - Setup IT system with a US bank or S&L (I) W1 Increase awareness through new banking partnership/affiliation (F) Weaknesses/Threats Strategies W2, W3, T1 - Setup banking/cultural exchange programs for staff development (L) SOURCE: Adapted from Andrew Sai On Ko and S.F. Lee, Implementing the strategic formulation framework for the banking industry of Hong Kong, Managerial Auditing Journal 15/9 [2000]

22 Win/Loss Analysis

23 Short Description Cost effective, insightful, and ethical method for gathering information about your market, customers, and competitors. WLA identifies your customer's perceptions of specific sales situations and how you compared to your competitors. The analysis provides information about the performance of both your firm and your competitors. This information can then be used to focus sales staff more effectively in the marketplace and also to inform research and development of products.

24 Strategic and Tactical Benefits Tactical Benefits Helping the sales team win more business. Improve client retention. Identify regularly why/how you lose against each of your competitors. Establish an action plan to address gaps in perceptions. Change behaviour and culture to improve client service. Identify traits of your successful sales people. Predict likelihood of winning/losing a sale more accurately. Change the sales mindset from one of making excuses for sales loss. Strategic Benefits Increase firm profits and revenue. Forecast revenue streams more accurately. Enhance the product/service offering and mix. Influence more timely product /service development. Alter the firm's culture to a more client service/needs focus. Select appropriate market alliances. Support the firm s early warning system. Identify competitor trends over time to enable action. Source: Adapted from Naylor, E. "Increasing sales through win/loss analysis, Competitive Intelligence Magazine, (5) pp 5 8.

25 Introductory Case Study: Some KITs/KIQs for Using Win/Loss Analysis What were the reasons we lost the sales competition for (a big client)? Are our prices truly non-competitive with our rivals? Or are other factors impacting client retention decisions? How/why can a top rival keep beating us on bids for regional clients? Are there opportunities to gain clients that we are not capitalizing on? What operational changes do we need to make to better satisfy existing clients? Help our sales force?

26 Overview From Win/Loss reviews, by Rick Marcet, 2011 WLA is direct feedback from a client or potential client about why you won or lost a specific sale or contract. The wins highlight your firm's strengths and your competition's weaknesses. Losses highlight your firm's weaknesses and your competition's strengths (Ritchie, 1992). Feedback obtained from a number of interviews is analysed. More detailed than post-mortem.

27 Strategic Rationale WLA brings together information about customers, competitors, and your own firm within the buying decision. Implications are highly dependent on the quality of the raw data. Analysts have the opportunity to learn about customers' perceptions. Should be an independent evaluation and conducted regularly.

28 Acknowledgements Dr. Craig S. Fleisher is Chief Learning Officer and Director, Professional Development at Aurora WDC. Connect with Dr. Fleisher via: Twitter:

29 Questions? Thank you!