CONFIDENTIAL,BU Strategic Plan Template Book,Training materials 8 June 2001,This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey it is not a complete record of the discussion.,Jim Ayala PHO Melissa Gil PHO Regina Manzano PHO Suresh Mustapha PHO Steve Shaw HKO Shelly Yeh PHO Choon-Gin Tan SIO,1,STRATEGY PLANNING INSTRUCTIONS,The objective of these templates is to provide completeness and consistency of BU strategic plan submissions. These templates are not intended to replace or constrain BU strategic thinking and should be adapted to reflect a particular BUs sectoral context as required Each section begins with a summary that is based on a synthesis of questions and analyses that follow. The suggested approach would be to first complete the relevant back-up analyses and then work towards the overall synthesis,2,TABLE OF CONTENTS,I. Executive summary II. Environmental and internal assessment A. Industry dynamics and its implications B. Competitive assessment C. Internal assessment III. Strategic definition and implications A. Strategy articulation B. Strategic initiatives C. Financial projection D. Risks/contingencies and strategic alternatives IV. Exhibits,3,BU STRATEGIC PLAN DEVELOPMENT,Industry dynamics and implications,Environmental and internal assessment,Competitive assessment,Internal assessment,What are the major changes in industry dynamics and resulting opportunities and risks?,What are your competitive strengths and weaknesses?,How does your current business emphasis fit with industry opportunity and competitive landscape?,Strategy articulation,Strategic definition and implications,Strategic initiatives,Financial projections,What strategy will your BU pursue over the next 3 years?,What will be the impact of major strategic initiatives?,What are the expected financial returns of your strategy?,+,+,+,+,Risk/contingen-cies & strategic alternatives,What strategic alternatives have you considered?,+,4,I. EXECUTIVE SUMMARY,Instructions: The Executive Summary provides a synthesis of the Environmental and Internal Assessments and the resultant BU Strategic Plans,5,II. ENVIRONMENTAL AND INTERNAL ASSESSMENT,6,IIA. INDUSTRY DYNAMICS AND IMPLICATIONS SUMMARY,A. What are the major changes in industry dynamics and the resulting opportunities and risks?,A.2 How is industry structure changing (demand, supply, and industry chain economics)? What are the resulting opportunities and risks?,A.3 What is the expected competitor conduct? What are the resulting opportunities and risks?,A.4 What are the present and future external factors that could present new opportunities and risks?,A.1 What industry are you competing in? What are the various segments in the industry?,Instructions: The answer to this overarching question requires a recapitulation of the sections main findings,Instructions: These subsections contain a 1-2 sentence summary of the relevant findings,7,IIA. INDUSTRY DYNAMICS AND IMPLICATIONS BACK-UP 1,A.1 What industry are you competing in? What are the various segments in the industry?,Industry definition Industry segmentation Definition Sizing,Instructions: Exhibit 1 could provide a useful framework for answering this question,Industry definition:,Industry segmentation:,8,IIA. INDUSTRY DYNAMICS AND IMPLICATIONS BACK-UP 2,A.2 How is industry structure changing with respect to demand, supply, and industry chain economics? What are the resulting opportunities and risks?,Economics of demand By segment Substitutes, ability to differentiate Volatility, cyclicality Economics of supply Producer concentration and diversity Import competition Capacity utilization Entry/exit barriers Cost structure (fixed and variable) Industry chain economics Customer and supplier bargaining power,Instructions: Exhibit 2,3 or 4 could provide a useful framework for answering this question,9,IIA. INDUSTRY DYNAMICS AND IMPLICATIONS BACK-UP 3,A.3 What is the expected competitor conduct? What are the resulting opportunities and risks?,Major industry competitor moves Marketing initiatives Industry capacity changes M&As, divestitures Vertical integration/disaggregation Alliances and partnerships Cost control and efficiency improvements,Instructions: Exhibit 2,3 or 4 could provide a useful framework for answering this question,10,IIA. INDUSTRY DYNAMICS AND IMPLICATIONS BACK-UP 4,A.4 What are the present and future external factors that could present new opportunities and risks?,Impact and likelihood of major industry discontinuities Changes in regulation/government policy Technological breakthroughs,Instructions: Exhibit 2,3 or 4 could provide a useful framework for answering this question,11,IIB. COMPETITIVE ASSESSMENT SUMMARY,B. What are your competitive strengths and weaknesses?,B.1 What are the capabilities required to succeed in this indu